Lending Club Review

By Kevin Mercadante

LendingClub at a Glance

Loan typesPersonal, small business, refinancing, debt consolidation, auto
Loan amount$1,000 to $40,000
Repayment terms 3 or 5 year plans
APR5.99% - 35.89%
 Best forBorrowers with a low credit score

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Overview

LendingClub is a leading name in the loan marketplace industry. A peer-to-peer lender, LendingClub offers borrowers a wide range of loan options, therefore increasing the chances of getting approved for a loan. LendingClub also makes applying for a loan simple by sending out the application to multiple lenders. With a good reputation, convenient application process, and attractive loan terms, it’s easy to see why LendingClub is one of the top choices for debt consolidation, business, and personal loans.

Best For?

  • Low credit score borrowers

LendingClub works with people who have low credit scores, sometimes as low as 600.

  • Joint application borrowers

Additionally, for borrowers with even worse credit, LendingClub offers joint application processes. This allows someone with a credit score of 540 to get loan approval.

  • Debt consolidation

LendingClub has loan plans that require up to 80% of the loan be delivered directly to the debt collection, ensuring that debts are paid off, and borrowers can focus exclusively on their single payment loans.

Pros and Cons

Potential LendingClub borrowers need to check state availability before getting their hopes up because not all states are eligible for these loans. Additionally, LendingClub can take up to one week to approve, match, and process a loan. 

That being said, LendingClub has excellent eligibility terms and works with many borrowers that other lenders won’t even consider and its joint loan application offers hope to those with low credit. What is even more impressive is LendingClub’s medical loans option. In some cases, LendingClub will actually deliver 0% loans to help augment the costs of hefty medical bills not covered by the borrower's insurance. These plans are subject to different terms and need to be assessed on a per situation basis.

Loan Features

Highlights for LendingClub:

  • Can be lender and borrower simultaneously
  • Joint loan applications
  • Hardship plan

LendingClub has several attractive loan features, such as APRs that start at 5.99%, as well as offering co-signer loans.
Another interesting twist LendingClub provides is the ability for people to be both a borrower and a lender. LendingClub is a marketplace for borrowers to find multiple lenders at one time. Lenders are actually investors, people looking to turn a profit while helping out others. The investors take on the loan requests and earn the interest from the loans they provide. What is unique about the LendingClub is that people can invest in a loan and take out a loan simultaneously. So, an individual can actually be making money to help pay off their loan from the same source.

The Application Process

LendingClub has a fast online application that requires you to fill out questions such how much you want to borrow, what the loan is for, and personal information like email address and phone number. Next, LendingClub will run a soft credit pull, which will not affect your credit score.

Once the application is processed, LendingClub will assign you a grade that will determine which investors will take up the loan request and what type of terms you can expect to receive. Only lenders can see the grade, not the borrowers, and grades are based on bank details and credit history.

A lender can then approve the loan request, offer loan terms to the borrower, and complete the process if the borrower agrees to their offer. You should be careful to read the terms of the loan offer carefully to understand exactly what it entails. The beauty of the LendingClub system is that you may be offered several loan offers simultaneously, meaning you can compare rates, terms, and offers easily, and come out with the best loan available.

Loan Terms

LendingClub has competitive loan terms, often besting the competition in several areas. This is because of the loan structure. A P2P lending marketplace has multiple lenders competing for the same loan, so borrowers get the benefit of lower rates and better terms as a result. Typical loan terms range from 5.99% – 35.89% APRs, and borrowers can request anywhere from $1,000 – $40,000.

One downside to the LendingClub is their fees structure. Some lenders such as Discover or SoFi waive all fees, making their loans more affordable and manageable. Many other lenders do take fees, though, so LendingClub is not alone in this practice. Some of their standard fees include:

  • Origination fee: 1% - 6%
  • Late fee: 5% of payment due or $15, whichever is greater
  • Check processing fee $7
  • Unsuccessful payment fee $15

LendingClub has pretty low eligibility requirements. They expect a minimum 600 credit score. The average borrower has a score of 699, which is higher than their minimum but lower than many other lenders out there. LendingClub also looks for a minimum credit history of 3 years, but of course the more you have, the better. LendingClub even works with people who have a debt to income ratio of 40%. That’s quite high.

Repayment Terms

LendingClub has flexible repayment terms with plans available for either 3 or 5 years. As mentioned, there is a late payment fee for missed payments or payments that are put through too late to be processed on time. However, LendingClub offers a generous Hardship Plan to its borrowers. The Hardship Plan allows borrowers to freeze their loan for up to 3 months during difficult financial times such as unexpected debt, medical bills, or loss of income or employment. Borrowers will still have to pay the interest payments each month, but that is significantly less than the overall monthly amount due.

Privacy & Security

Each page on LendingClub's website is VeriSign Secured, and all transactions are TRUSTe certified. Additionally, LendingClub is a publicly traded company, so there is a lot of information about the company available to the public (such as financial records, reports, and statistics). This kind of public identification ensures that LendingClub is maintaining all the legal requirements, making them a reliable and safe alternative to some of the more anonymous or lesser-known competitors.

Help & Support

LendingClub has good phone support available during extended business hours as follows:

Monday-Friday 6:00am - 5:00pm PT

Saturday: 8:00am - 5:00pm PT

Additionally, there is a thorough FAQ section that is neatly broken down into categories. There is also a search function to help facilitate faster answers.

Summary

The ability to apply to multiple lenders at one time automatically makes LendingClub more convenient. Combine this with the flexibility of long repayment terms, a thoughtful Hardship Plan, and good loan terms overall, and LendingClub becomes more than just a viable option for borrowers to consider. If time is not of the essence, anyone looking for a reliable loan service should turn to LendingClub for their assistance.

Physical Address

71 Stevenson Street, Suite 1000

San Francisco, CA 94105

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