Lending Club Personal Loan Review 2020

Rating:
4/5
4 stars out of 5

The Smart Investor reviews are unbiased, and reflect the views of our editorial staff. We’ve collected the information independently. Issuers did not provide the details, nor are they responsible for their accuracy. The review is not a recommendation, the actual rates/fees may be different.

Lending Club – About The Lender

LendingClub is the largest peer-to-peer marketplace in the world. Established in 2006 out of San Francisco, CA, it has lent over $42 billion in personal loans.
Peer-to-peer lending is a platform that matches lenders with borrowers, instead of going through a lending institution such as a bank. This means you can have common investors or investment groups funding your loan.

The LendingClub platform started out facilitating only personal loans but has expanded into loans for businessauto and medical. The information below is for the personal loan product.

Loan Specifications

Here are the basic specifications & requirements of Lending Club Personal Loan :

FeatureLending Club Personal Loan
Loan Amount Range$1,000 -$40,000
Interest Rate Range6.16% – 35.89%
Term36 to 60 months
Origination fee1% to 6%
Late Payment Fee$15 or 5% of the amount due
Returned payment fee$15
Check processing fee$7
Prepayment feeNone
Minimum Credit Score600
FundingUp to 7 days

Lending Club Loan Pros & Cons

As we know, each lender has its own pros & cons – here are the relevant things we found for potential borrowers:

Pros

Cons

What Can a LendingClub Personal Loan Be Used For?

LendingClub offers personal loans for many different reasons and groups them into 3 categories: to pay off high-interest debt, to pay for something unexpected, and to pay for something planned.

LendingClub debt consolidation is paying off one or more prior unsecured loans with the new loan. Instead of multiple payments to multiple lenders you can create one payment to one lender. The advantage of a debt consolidation loan with LendingClub is that the payment and term are fixed so you know exactly when you’ll be out of debt. The idea is that you can take a high revolving interest credit card and save money by replacing it with a low rate fixed installment. LendingClub also has a debt consolidation calculator, so you can get an idea on how much you can save.

LendingClub loans can be used for unexpected costs like medical bills, or the death of loved one. Many times in life unexpected expenses come up and if you do not have emergency savings, a LendingClub loan can help you pay.

LendingClub loans can be used for a wide range of costs that you expect in the future. For example, loans can be used for home improvement. They can be used for expected medical costs, wedding expenses, vacations, moving, business expenses, and can even be used to help buy a home. The great thing about using a personal loan instead of credit cards for these types of expenses is that the terms will not change over the course of the loan.

LendingClub is a peer-to-peer marketplace, so you not only apply but also create a profile for potential investors to evaluate you as a risk and accordingly lend you money for a portion of the loan. You start the process by checking your rate through a soft pull.

You will fill out some basic information and they will give you a couple of rates and loan options. You will choose the option you would like to apply for. Then you fill out the rest of the application. At this point, LendingClub will do a hard pull and check your credit. Then you will need to provide verification information. LendingClub will have a list of information for you to provide. They may request documentation to verify your identity, income, or employment.

Your listing will then be posted on LendingClub’s marketplace where investors can look at your profile and decide whether to invest in your loan. Many listings are funded in the first few days. You will sign documents electronically for the loan and then the funds will be sent to your bank.

LendingClub Personal Loan is Best for..

LendingClub has a high standard for their personal loans. Those they approve are borrowers who have well-established and good credit history with very strong cash flows. LendingClub is best for those with good credit and those who do not mind waiting a few days to receive the funds.

There are faster options available. but LendingClub has competitive rates for those with excellent credit. It is worth the wait to get a good interest rate. Watch out for the origination fee – it can be high and greatly increase the cost of your loan.