If you’ve been researching how to get a loan, you’re not alone. And you shouldn’t be afraid to borrow if it helps you reach your goals. For example, you might be looking for money to start a business, buy a car to get to a new job, or consolidate credit card debt.
If you’ve been thinking about taking out a personal loan, you want to be sure that you choose a trustworthy and dependable lender. LendingClub has been around since 2007 and has grown to be a leader in this industry. We’ve prepared this guide to help you learn everything you need to make an informed decision about borrowing through LendingClub.
An overview of LendingClub
San Francisco-based LendingClub launched in 2007 as a peer-to-peer lender. As a peer-to-peer lender, it offered a platform for individuals to borrow small amounts of money from individuals or investors, as opposed to taking a loan from a traditional bank. By 2014, LendingClub had grown so much that it became the first peer-to-peer lender to go public on the New York Stock Exchange. Since then, the company has grown exponentially, having lent more than $60 billion to customers. More than three million members have used LendingClub.
In 2021, LendingClub acquired Radius Bank, and is now the first public neobank, or fintech company offering online-only banking services, in the U.S. LendingClub no longer operates using a peer-to-peer lending model, but still aims to help consumers get lower rates on loans. The company also plans to provide savings products in the future.
What loan products does LendingClub offer?
LendingClub offers a variety of loans, including personal loans (which can be used for many purposes), business loans, and auto loan refinancing.
All of LendingClub’s loans start with a pre-qualification process to see how much you might be approved for when you apply for a loan. You’ll provide your personal information, including your Social Security number, address, and annual income. If you’re applying for a business loan, you’ll need to answer questions about your business as well. Then the company will perform a soft credit check to determine if you could be eligible for approval, for how much, and what your interest rate options might be.
If you decide to move forward with an application, you may be given several loan options, terms, and rates to choose from. Once you make your selection, you may be asked to provide additional information, such as proof of income, before your loan is finalized.
After you’ve received the money, repayment of your loan can be done through an automatic monthly bank draft, pay-by-phone, or via check. You can also pre-pay or pay off your loan early with no fees or penalties.
Personal Loans from LendingClub
A personal loan from LendingClub can be used for almost anything. Credit card debt consolidation, existing loan refinancing, medical and dental bills, home improvement projects, and big-ticket purchases are among the most common reasons borrowers take out personal loans. If you find you have any of these needs, you may want to consider looking into this type of loan.
With LendingClub’s personal loans, you can expect a repayment term of three or five years. The annual percentage rate (APR) you’re offered will depend on your creditworthiness. The higher your credit score and lower your credit utilization percentage, the lower your APR is likely to be.
One of the most appealing aspects of LendingClub’s personal loan product is the opportunity to get the loan proceeds in your bank account in just a few business days. There are also no application fees or prepayment penalties, but you will need to pay an origination fee, which will be taken out of your loan balance.
LendingClub is best for borrowers with good or excellent credit. If you fall below that mark, you could try applying with a co-signer. You must also be a U.S. citizen or permanent resident who is at least 18 years old to be eligible.
|Loan amount||$1,000 to $40,000|
|Loan term||36 months or 60 months|
|APR||8.05% to 35.89% (as of May 27, 2021)|
|Origination fee||3% to 6%|
Business loans from LendingClub
LendingClub gives small businesses the chance to grow with loans from $5,000 to $500,000 that can be repaid over one to five years. These loans are offered in partnership with Accion Opportunity Fund — LendingClub no longer originates its own business loans.
If you own a small business, this kind of cash could help you make capital investments, create and store inventory, expand operations, and more. You’ll even get a dedicated client advisor to help you with the application process, and there are no prepayment penalties.
You’ll need to meet the following eligibility requirements:
- At least 12 months in business
- A minimum of $50,000 in annual sales
- Your business is based in the U.S.
- You own at least 20% of the company
|Loan amount||$5,000 to $500,000|
|Loan term||1-5 years|
|APR||5.99% and up (as of May 27, 2021)|
Auto refinancing loans from LendingClub
If your monthly car payment doesn’t fit into your budget, replacing your current auto loan with a new loan to get a lower rate might be possible. Members who refinance car loans with LendingClub save an average of $80 on their monthly payments by achieving a lower interest rate. There’s also no origination fee or prepayment penalty with LendingClub’s auto refinancing loans.
You’ll need to meet the following eligibility requirements:
- Your vehicle is only for personal use
- Your car is 10 years old or newer and has fewer than 120,000 miles
- You’ve had your existing auto loan for at least one month
- You have at least 24 months of payments remaining
- Your current loan balance is between $4,000 and $55,000
|Loan amount||$4,000 to $55,000|
|Loan term||24 to 84 months|
|APR||2.99% to 24.99% (as of May 27, 2021)|
LendingClub partners with more than 23,000 providers across the country to provide financing for medical and dental care. If your provider is enrolled with LendingClub, you might be eligible for an installment loan or revolving line of credit to help pay for dentistry, fertility, hair restoration, or bariatric services. Loan rates and terms vary by plan type:
|Fixed-rate plans||Promotional no-interest plans||Promotional low-rate plans|
|Loan amount||$2,000 to $50,000||$499 to $32,000||$1,000 to $32,000|
|Loan term||24, 36, 48, 60, 72, or 84 months||6, 12, 18, or 24-month promotional period||24, 36, 48, or 60-month promotional period|
|APR (as of May 27, 2021)||4.99% to 24.99%||No interest during promotional period; 26.99% after that||17.90% APR during promotional period; 26.99% after that|
|Plan type||Installment loan||Revolving line of credit||Revolving line of credit|
What LendingClub customers are saying
More than 57,000 customers have reviewed LendingClub on the company website, rating the lender an average of 4.82/5 stars. Members had positive comments about LendingClub’s customer service, rates, and ease of application process.
Reviews on third-party websites are also favorable. For example, LendingClub received an average rating of 4.8/5 stars from more than 1,300 reviewers on Trustpilot. On Consumer Affairs, more than 385 customers rated the lender an average of 3.9/5 stars. While LendingClub is not accredited with the Better Business Bureau, the lender received an average rating of 4.28/5 stars from more than 800 customer reviewers on the site.
How does LendingClub affect your credit?
Borrowing through LendingClub is the same as borrowing from any other type of lender. Your debt-to-income ratio and credit history will be assessed during the application process, first as a soft credit check to give you an idea of what you may be eligible to borrow. Once you decide to formally apply for a loan, the lender will perform a hard credit check, which might result in some negative impact on your score. This should only affect your score for a few months.
Once you have the money from LendingClub, you will have a new personal loan account on your credit report. Timely payments to your loan will keep your credit score healthy, while late payments might lower your score. If you use the funds from your loan to pay off credit cards, your credit score could potentially get a boost.
What credit score do you need for LendingClub?
LendingClub doesn’t specify a minimum credit score for applicants, but you’ll likely need good credit or excellent credit to qualify. If you have fair credit, you can apply with a co-borrower to increase your chances of getting approved.
Is LendingClub a bank?
Yes. Since acquiring Radius Bank, LendingClub bills itself as “the only full-spectrum fintech marketplace bank at scale.” While LendingClub once operated as a peer-to-peer lender, the lender’s business model has changed. When you borrow from LendingClub, you borrow from a financial institution rather than individual investors.
Can you pay off a LendingClub personal loan early?
Yes. LendingClub does not charge any penalties or fees for paying off a personal loan early.
Are LendingClub personal loans good?
LendingClub aims to offer personal loans at lower rates with an easy online application process. You could borrow up to $40,000 with a rate as low as 8.05%. LendingClub personal loans are a good option, but it’s a good idea to compare rates with other lenders before applying, especially if your credit is excellent. Some other lenders might be able to offer lower APRs to creditworthy borrowers.
It’s also important to note that LendingClub’s name has been used in an online loan scam. If someone contacts you claiming to represent the company and asks for an upfront fee, hang up and contact LendingClub directly. LendingClub will never charge a loan application fee.
The final word on LendingClub
LendingClub makes it easy to check your rate and apply for a loan online. It could be a great option for borrowers seeking a low fixed rate for a personal loan, business loan, or auto refinance loan.
However, it’s not the only online lender out there, so it’s a good idea to compare loan offers to find the lowest rates and the best terms. Some other online lenders are able to offer lower rates without origination fees to borrowers with excellent credit. Still, we recommend checking your rate with LendingClub if you’re wondering how to get a loan. You might find that LendingClub is a good fit for your financial needs. If you’re interested in shopping around, check out our picks for the best personal loans.
Editor's note: Lindsay Frankel also contributed to this piece.