LendingClub Personal Loans Review

Pros

• Financing is available to qualified startups
• The application process is fast and easy
• Funds are disbursed quickly
• Builds personal credit

Cons

• Low borrowing amounts
• Rates can be expensive

LendingClub Personal Loans Overview

With over ten 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 with personal loans. Although they are ostensibly for consumers, the loans can be used for entrepreneurial and business startup purposes.

These loans will not work for all borrowers, though; you can only borrow up to $40,000 and could potentially receive a very high APR (30%+) if you don’t have a very high credit score. You can check your eligibility and potential rates in a few minutes via the website without taking a hit on your credit score.

Is this the right lender for your business? Keep reading to find out!

Services Offered

LendingClub’s personal loans arm sells installment loans, which are repaid in fixed monthly installments, plus interest, for 36 or 60 months. A one-time origination fee is also deducted off the top of the loan. These loans are easy to apply for online, and funds are released within days. You can use loan proceeds for any personal or business use, though you can only borrow up to $40,000. Because there is no strict credit score or time in business requirements, LendingClub’s personal loans can be a viable source of funding for startups and business owners with bad credit.

LendingClub also offers auto refinance loans and business installment loans. Note that while LendingClub still offers business installment loans through a business loan referral service, LendingClub no longer originates these business loans. Applicants who pre-qualify for a business loan via LendingClub are now connected to a partner lender.

Borrower Qualifications

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. Lending Club also does not list any minimum required credit score on its website:

The only requirements for personal loan applicants described on LendingClub’s website are as follows:

• Be a United States citizen, a permanent resident, or living in the US on a valid, long-term visa
• Be at least 18 years old
• Have a verifiable bank account

While LendingClub does not state any minimum required credit score, it does consider your credit score, credit history, and other information that predicts the likelihood that you’ll make your loan payments. However, LendingClub allows adding a “co-borrower” to your application, which may help you qualify if your credit profile isn’t up to snuff. It’s also worth noting that LendingClub reports your loan repayment information to the major credit bureaus, including both positive and negative information. This means that if you repay your LendingClub loan on time and don’t miss any payments, you can improve your personal credit score in the process.

LendingClub does not currently accept applicants from Iowa or any US territories.

Rates & Fees

These are the terms and fees for LendingClub’s personal loans:

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, including your credit history, credit score, and other information. To qualify for a low-interest rate with Lending Club, you will need a high credit score, a low debt-to-income ratio, and a long history of successful credit lines.

Note that in addition to interest, LendingClub charges a one-time fee called an origination fee. This fee 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, though it doesn’t reward customers for paying early, either.

Application Process

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 long term lengths will have higher interest rates but lower monthly payments, and loans with short 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 investors fund the loan.

Currently, personal loans typically take as few as three days to be fundedDisclaimer: Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20, 2018. The time it will take to fund your loan may vary. 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 after gathering 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.

User Reviews

Negative Reviews & Complaints

LendingClub is accredited by the Better Business Bureau. At the moment, LendingClub has 308 total complaints in the last three years, and of those, 112 complaints were closed in the last 12 months.

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 LendingClub’s blog.

Here are the most common complaints specific to personal loans, based on customer complaints:

• Origination Fee: 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, with some borrowers complaining about APRs as high as 30-35%. 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 can 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 “preapproved” 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. Here is how the scam works:

Consumers 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 like a green dot money pack or in a MoneyGram.

If in doubt, remember that LendingClub never charges application fees and that its 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 Personal Loans has a rating of 4.3 out of 5 stars based on 111 reviews.

Here are commonly cited reasons why 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 entirely online without having to go somewhere or talk to somebody on the phone.

Final Verdict

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. Applicants with no business track record can qualify for a small loan, even if they do not have perfect credit. 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 startup loans review category to learn about your other potential options.

The Merchant Maverick Seal of Approval 🏆

LendingClub Personal Loans	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see LendingClub Personal Loans for yourself.

The Merchant Maverick Seal of Approval 🏆

LendingClub Personal Loans	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see LendingClub Personal Loans for yourself.