Lending Club Review Personal Loans 5 2017-05-31 10:31:21

Lending Club Review

Apply for Lending Club
Rating:
Bottom Line:
Simple application process and low rates make this peer-to-peer service a great choice for those with average or better credit

Full Review:
Since 2007, Lending Club has offered an alternative to traditional banking with a peer-to-peer lending system. The service enables borrowers to connect with multiple investors to receive the money they need with the promise of lower interest rates and a no-hassle online approach. Lending Club provides all of its services online and does not have any physical branches, unlike some of the other personal loan services.


Types of Loans Available

Personal loans from Lending Club can be used for a wide variety of purposes, with suggested uses including debt consolidation, home improvement, medical expenses, car financing, vacations and more. Loans cannot be used to fund college expenses, including tuition, books or room and board.


You can borrow anywhere from $1,000 to $40,000 with interest rates ranging from a 5.99% to 35.89% APR, depending on what loan grade you qualify for. Since these are fixed rates, your loan payments will never change throughout the life of the loan. Most loans can be borrowed for terms of 36 or 60 months; however, those with the best qualifications may be eligible to borrow for a 24-month term at a slightly higher APR.


Qualifying

In order to be approved for a loan with Lending Club, you must be a U.S. Citizen who's at least 18 years old or someone who's at least 18 years old living in the U.S. on a long-term visa with a verifiable bank account. During the approval process, Lending Club looks at your credit scores and history, debt-to-income ratio, the length of your credit history, number of open accounts and usage/payment history with those accounts and your recent credit activity. The better your credit, the better chance you have to get approved for the amount you're requesting as well as the possibility of receiving a lower interest rate. On average, a minimum credit score of 660 is preferred.

At this time, Lending Club does not accept loan applications from residents of Iowa or West Virginia.


Application Process

Lending Club's application process begins with an online application. Each loan application is assigned a grade from A to G, which determines your interest rate. Those whose loans receive higher grades — A being the highest — have access to the lowest interest rates, as illustrated by the graphic below. If approved, you will then be presented with your loan grade, interest rate and multiple loan offers based on the amount you've been approved for. The amount of money offered to you may be lower than what you requested. From there, you can choose to accept an offer, complete your application or withdraw. If you withdraw, you will be allowed to apply for another loan in the future. Once your application is complete, Lending Club's in-house team will review your information and collect data, such as pay stubs and other financial paperwork, to ensure everything is in order.


After your application has been reviewed and approved, it will be made available for investors — who sign up to be investors through Lending Club and are put through a screening process before being able to invest — to consider for a period of seven days minimum, 14 days maximum. During this process, your identity as well as the identities of any/all investors remain private. Once one or more investors have contributed the full amount, your loan listing will close and funds will be deposited into your verified bank account within four business days.

It is possible that you may only be funded for a partial amount of your loan request, although Lending Club claims as of April 2014 that 99% of its approved listings receive full funding within 14 days. That said, if you receive at least 60% of the amount requested by the time the 14-day period ends (and the amount received is more than $1,000), your loan will be issued automatically. You have the option to relist for the difference or cancel your request. If you prefer not to accept a partial amount, you must call Lending Club at least one business day prior to your listing's expiration date. If you do not receive at least 60% of the requested amount, the loan request expires and you have the option to relist.

Massachusetts residents should keep in mind that whether they receive the minimum 60% funding or not, the loan may only be disbursed (partial or in full) if the APR is less than 12% or the amount funded exceeds $6,000, regardless of APR.


Repayment and Fees

Lending Club does not charge an application fee; however, an origination fee will be taken from the proceeds of your loan before they are deposited into your bank account. The percentage of this fee ranges from 1% to 5% of the total loan amount and depends on the grade of your loan — which is, in turn, based on your credit rating. It is good to keep this in mind when deciding what amount to request, because you will need to factor in the origination fee to be sure the amount you actually receive will cover whatever it is you need to pay for.

Payments on your loan are withdrawn automatically from your bank account starting the following month. Alternatively, you can pay by check, but an additional $7 processing fee is tacked on to each payment if you choose this route.

You are free to repay the full loan amount at any time or make larger payments without risk of penalties or fees, but you must notify customer support in order to do so. If there is an issue with your payment, such as an error with your bank account or a bounced check, Lending Club will charge a $15 unsuccessful payment fee. There is a 15-day grace period before late fees are charged. Your late fee will be either 5.00% of the late payment or $15, whichever is greater. Significant lateness will be reported to the credit bureaus and, in extreme cases, sent to collection agencies.


Trustworthiness

Lending Club loans are made through WebBank, which is an FDIC-insured industrial bank located in Utah that has been in business since 1997. Both WebBank and Lending Club currently have A+ ratings from the BBB and are accredited by the organization. Lending Club promises to protect your identity through the lending process and will not reveal any of your personal or identifying information to investors at any point during the process.


Customer Support

Contacting Lending Club can be done through email and a toll-free phone number. Phone support is available Monday through Saturday from 6 a.m. to 5 p.m. PT. The website also has an extensive help section that covers many of the questions borrowers may have. When we emailed Lending Club, we received an automatic response that told us we should expect an answer within one business day. The actual response to our question came one hour after our initial email was sent. Phone support is quick, and we found customer service representatives to be friendly and helpful.


Conclusion

Lending Club offers excellent customer service, a simple application process and decent interest rates, especially for those with average-to-great credit. The ability to accept partial funding then relist for the difference makes Lending Club a great choice for peer-to-peer lending.

Disclaimer: The APR ranges from 5.99% to 35.89%. For example, with a credit grade of A1 you could receive a loan of $10,000 with an interest rate of 5.32% and a 1.00% origination fee of $100 for an APR of 5.99%. In this example you will receive $9,900 and will make 36 monthly payments of $301.15. Your APR will be determined based on your credit at time of application. Average APR on 36 month loans for similar solicitation from 10/1/2015-10/31/2015 was 14.3%. The origination fee ranges from 1% to 6% and the average origination fee is 5.28% based on origination volumes from 1/1/2016 to 2/29/16. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement to all of the required agreements and disclosures on the www.lendingclub.com website. All loans made by WebBank, a Utah-chartered industrial bank, member FDIC.

Apply for Lending Club | Compare to other Personal Loan Services

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Service Details

Minimum/Maximum Loan Amount:$1,000 - $40,000
APR:5.99% - 35.89%
Terms Available:24 - 60 months
Required Credit Rating:660+
Secured/Unsecured:Unsecured
Local Branches:No

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