By Kevin Mercadante
|Loan amount||$1,000 - $40,000|
|APR||5.99% - 35.89%|
|Loan terms||3 or 5 year plans|
|Minimum credit score||600|
|Time to funding||Up to 1 week|
|Soft credit check||Yes|
|Debt-to-income ratio||Up to 40%|
LendingClub is a leading name in the loan marketplace industry and has grown to become the largest online personal loans lender in the United States. Using a peer-to-peer lender model, LendingClub offers borrowers a wide range of loan options, therefore increasing the chances of getting approved for a loan. 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.
LendingClub works with a vast network of lenders, many of which offer loans to borrowers with credit scores starting at 600.
If your credit score is as low as 540 you can still qualify for a loan with LendingClub as long as you apply with someone who has a credit score of 600 and above.
With its peer-to-peer model, LendingClub lets you be both a borrower and a lender. What’s unique about LendingClub is that you can invest in a loan and take out a loan simultaneously and therefore be making money to help pay off your loan from the same source.
With a LendingClub loan you'll pay a fixed monthly rate throughout the term of the loan, which makes it easier to budget and plan ahead.
LendingClub’s Hardship Plan lets you to freeze your loan for up to 3 months if you experience a difficult financial period and are unable to make your loan payments on time.
If you make your payments on time, you can work on rebuilding your credit score because LendingClub will report this activity to the major credit reporting bureaus.
Step 1: LendingClub has a fast online application that requires you to fill out information such as:
Step 2: Next, LendingClub will run a soft credit pull, which will not affect your credit score.
Step 3: 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.
Step 4: 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.
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 you 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:
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.
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.
Each page on LendingClub's website is VeriSign Secured, and all transactions are TRUSTe certified. Additionally, it 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.
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.
The ability to apply to multiple lenders at one time automatically puts LendingClub in a good position. With the flexibility of long repayment terms, a thoughtful Hardship Plan, and good loan terms overall, it has a lot going for it. If time is not of the essence, and you are looking for a reliable loan service, LendingClub is the choice for you.
71 Stevenson Street, Suite 1000
San Francisco, CA 94105