LendingClub Personal Loans Review
Need help finding a loan?
- Date Established
- San Francisco, CA
- Suited for startups
- Competitive terms and fees
- Easy application process
- Unsuited for large businesses
- Some additional fees
With over 10 years in business, LendingClub is the largest and oldest peer-to-peer (P2P) lender around. P2P lenders such as LendingClub seek to streamline and de-complicate lending by cutting banks out of the equation. Instead of going through a bank, the money is passed straight from investors to you.
LendingClub deals primarily in personal loans. Although they are ostensibly for consumers, the loans can be used for entrepreneurial and business start-up purposes.
These loans will not work for all borrowers, though; you’ll need at least fair credit and a solid debt-to-income ratio to qualify for a loan. If you’re not sure that you’re qualified, LendingClub makes it easy. You can check your eligibility and potential rates in a few minutes via the website, without taking a hit on your credit score.
LendingClub also offers business installment loans. If you have been in business for at least one year and make a minimum of $50,000 in annual revenue, you may benefit more from a business loan. Head over to our LendingClub Business Loans Review for more information on that product.
Is this the right lender for your business? Keep reading to find out!
Table of Contents
LendingClub offers the following loan products:
If you’ve been in business at least one year and make at least $50,000 annually, a LendingClub business loan may be what you’re looking for. Take a look at our review of this lender’s business service to find out!
These are the minimum requirements to qualify for a LendingClub personal loan:
|Time In Business:||N/A|
|Personal Credit Score:||Fair credit: min. score of 600|
Because this loan is based on your personal creditworthiness, LendingClub does not require that you’ve been running your business for a certain amount of time or make a certain amount of revenue.
In addition to having at least fair credit, you will need to have a solid debt-to-income ratio (no more than three tradelines open), at least three years of credit history, and be at least 18 years of age.
Terms & Fees
These are the terms and fees for LendingClub’s personal loans:
|Borrowing Amount:||$1,000 – $40,000|
|Term Length:||three OR five years|
|Interest Rate:||5.32% – 30.99%|
|Origination Fee:||1% – 6%|
|APR Range:||6.95% – 35.89%|
LendingClub offers traditional installment loans. Borrowers receive the loan in one lump sum (less the origination fee) and repay in monthly fixed installments.
Your assigned interest rate corresponds to how creditworthy LendingClub perceives you to be, based on the information gathered from your application. More creditworthy applicants will receive a lower interest rate.
Note that in addition to interest, LendingClub charges a one-time fee called an origination fee. This is 1% to 6% of your borrowing amount, which is deducted from your funds before you receive the loan. LendingClub might also charge a check processing fee (if you pay with checks) or late payment fees (if you pay late). This company does not charge a penalty for repaying your loan early.
LendingClub provides a thorough rundown of the application process on its FAQ page.
Potential borrowers can check their eligibility and rates without taking a credit hit via LendingClub’s online application. The application will ask you for basic information about yourself and your finances.
If you are approved, LendingClub will present a few potential borrowing options. Generally, loans with longer term lengths will have higher interest rates but lower monthly payments, and loans with shorter term lengths will have lower interest rates but higher monthly payments. If you like the offers presented to you, you’ll have to choose the one best suited for your needs to continue the process.
The next step is to confirm the information and submit documents for verification purposes. Assuming LendingClub doesn’t find anything that would bar you from receiving a loan, you will get your money (less the origination fee) as soon as the loan is funded by investors.
Currently, personal loans typically take as few as three days to be funded but may take longer if there are delays at some point in the process.
Sales & Advertising Transparency
Between the main website and the FAQ, LendingClub’s website supplies most of the information you’ll need to know before applying for a loan, or even while you’re paying the loan off. I have seen the range of interest rates, origination fees, other possible fees, and term lengths disclosed in multiple places across the site. If you poke around a bit before applying, you shouldn’t run into any surprises.
It’s worth noting that many customers feel misled by LendingClub’s mailers, which claim the customer has been “preapproved” for a loan. As stated below, preapproval is not indicative of whether or not you’re actually qualified for a loan. LendingClub identifies potential borrowers through third-party sources but may find reasons to decline your application when they gather more detailed information about your situation.
Customer Service & Technical Support
LendingClub has a very comprehensive FAQ, which covers everything from applying for a loan to how to navigate your account and how to make payments.
If your question isn’t answered there, customer service is available via phone or email. Unlike LendingClub’s business loan branch, borrowers with a personal loan do not have a dedicated account manager. Regardless, most customers report positive experiences with LendingClub’s customer service, though a few customers have reported difficulty getting in touch with a person who could help solve their problem.
Negative Reviews & Complaints
LendingClub is accredited by the Better Business Bureau. At the moment, it has 269 complaints and over 100 negative reviews. The company also has a little over 200 complaints filed with the Consumer Financial Protection Bureau (CFPB) and has a profile on Credit Karma. Note that, while many of these complaints are about personal loans, some are for LendingClub’s other services.
LendingClub is currently involved in a pending lawsuit with the Federal Trade Commission (FTC), which alleges that LendingClub has not complied with FTC requirements regarding hidden fees and advertising standards. LendingClub has issued a response to the FTC refuting these claims, which can be found on their blog.
Here are the most common complaints specific to personal loans, based on customer complaints:
- Origination Ree: Some customers claim they were not aware of the origination fee before borrowing. However, I saw the fee disclosed in multiple places on the site, such as LendingClub’s Rates & Fees page.
- High-Interest Rates & Fees: Some customers felt that the interest rates and origination fees were more expensive than they would have liked. If you don’t like the rate you receive from LendingClub, I’d suggest getting your rates from some other personal lenders for comparison; many online lenders are able to give you a quote within minutes, without affecting your credit score.
- Application Delays: While most customers get their funds in a timely manner, some customers have reported delays during the process.
- Denial After Preapproval: LendingClub sends out mailers claiming that you’ve been “pre-approved” for a loan. Unfortunately, this is simply a marketing tactic and does not imply that you will be eligible for a loan when LendingClub learns more about you.
It’s also worth noting that, according to the BBB, LendingClub’s name has been used in an advanced fee scam. This is how the scam works:
[C]onsumers applying for a loan at online sites other than LendingClub are subsequently being contacted by representatives claiming to be from LendingClub. Loan applicants are told their loan will be approved and the money deposited into their checking account but they first must pay what they are told is a security, insurance or other fee. They are asked that the money be put on a prepaid card such as a green dot money pack or in a MoneyGram.
If in doubt, remember that LendingClub never charges application fees and that their loans are issued via WebBank.
Positive Reviews & Testimonials
In addition to the previously mentioned profile on Credit Karma, LendingClub has a number of customer reviews on its website. On Credit Karma, LendingClub has a rating of 4.8 out of 5 stars based on over 900 reviews.
Here are commonly cited reasons customers like LendingClub’s service:
- Fast application and funding process
- Informative customer service
- Affordable monthly payments
- Competitive interest rates
Additionally, many customers liked that they were able to complete the process completely online without having to go somewhere or talk to somebody on the phone.
LendingClub was one of the first lenders to offer online personal loans and, while it certainly has some competition now, it remains a worthy competitor for your business. A minority of users complain about delays, misleading advertising, and difficulty getting in touch with customer service, but most customers report that LendingClub’s loans are fast, easy, and affordable.
Potential borrowers may benefit from making a few comparisons before settling on a loan from LendingClub or another online lender, though. Like LendingClub, many online lenders offer quotes instantly without affecting your credit. Head over to our start-up loans review category to learn about your other potential options.
Business Loan Rating Criteria.