Lending Club Personal Loans: 2017 Review

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Lending Club Personal Loans: 2017 Review

4.5 stars out of 5

NerdWallet rating: 4.5 / 5.0
Good for: Good credit

LendingClub_logo

Lending Club, whose name is often synonymous with online personal loans, helped pioneer the business model of “peer-to-peer” or “marketplace” lending, which matches borrowers with investors willing to fund their loans.

Lending Club may be a good fit for you if:

  • You have a good credit score. The average Lending Club borrower has a score of 699, according to the company. Its minimum credit score is 600.
  • You carry a long credit history. Borrowers average more than 16 years of credit history. The minimum is 3 years.
  • Your income is higher than the national household median of $55,775. The average annual income of a Lending Club borrower is $76,135.
  • You have a low debt-to-income ratio. The average borrower has a ratio of 18.32%, excluding mortgage. The maximum ratio allowed is 35%.
  • You don’t need money immediately. Lending Club takes up to a week to verify applications and match borrowers with investors.

Lending Club at a glance

Typical APR5.99% – 35.89%
Loan amounts$1,000 – $40,000
Time to fundingUp to one week
Origination fee1% - 6%
Soft credit check?Yes

 

» MORE: Best loans for debt consolidation

Lending Club personal loan review

To review Lending Club, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data, and compared the lender with others that seek the same customer or offer a similar product.

Lending Club is the largest online lender for personal loans in the United States, having facilitated more than $24 billion in loans since it was founded in 2007. As a public company, it is required to report data about its lending process and fees, which means potential borrowers have access to information about the company.

The company screens potential borrowers and services the loans, but the decision to lend money is made by one or more investors. Lending Club assigns a grade to every approved borrower using credit and income data. Your grade determines what range of interest rates you qualify for and helps investors decide whether to fund your loan. Borrowers can’t see their grades; only investors can.

How Lending Club compares

Lending Club’s annual percentage rates start at 5.99%, but it also has a special lower rate of 4.99% for some borrowers with excellent credit.

Prosper, another large lender that connects borrowers with investors, has comparable loan terms and rates and a slightly smaller loan amount window than Lending Club. But Prosper also gives borrowers a mobile app to manage their money and track their credit scores.

Lending Club is one of a handful of online lenders that allow joint loan applications. To qualify for the joint loan, one borrower has to have a score of 600 and above, while the other borrower can have a credit score as low as 540. The maximum combined debt-to-income ratio has to be under 35%.

To select debt-consolidation borrowers who meet its requirements, the lender offers the option to pay off creditors directly. Discover and FreedomPlus also allow this option.

Lending Club also allows some borrowers who have trouble making payments to go on a hardship plan; borrowers can make interest-only payments for three months’ time until they get back on their feet.

How to apply for a Lending Club loan

You can apply on Lending Club’s website, or you can apply on NerdWallet.

NerdWallet’s lender marketplace checks multiple lenders and displays all the loans for which you pre-qualify based on the information provided in your application. You can compare rates in one place, and filling out an application won’t affect your credit score.

Details about Lending Club loans

Minimum requirements 

  • Minimum credit score: 600
  • Minimum gross income: Not provided, but generally high income
  • Minimum credit history: Three years
  • Maximum debt-to-income ratio: 35%

Lending Club terms

  • APR: 5.99% to 35.89% (minimum APR of 4.99% for borrowers with excellent credit)
  • Loan amount: $1,000 to $40,000.
  • Loan duration: Three to five years
  • Time to receive funds: Up to one week

Lending Club fees and penalties

  • Origination fee: 1% to 6% of the loan amount, depending on the borrower’s grade
  • Prepayment fee: None
  • Late fee: Greater of 5% of payment due or $15
  • Personal-check processing fee: $7
  • Unsuccessful payment fee: $15 

Learn more about personal loans

Consider other debt consolidation options

Check your free credit report

How personal loans work

Amrita Jayakumar is a staff writer at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com. Twitter: @ajbombay.

Updated May 4, 2017.


Personal Loans Ratings Methodology

NerdWallet’s ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no origination fees, payment options, short time to funding, interest rate caps of 36%, and absence of prepayment penalties. Features are considered for their positive impact on consumers’ credit history and financial health. To ensure accuracy and consistency, our ratings are reviewed by multiple people on the NerdWallet Personal Loans Team.

5 stars out of 5 — Among the very best for consumer-friendly features

4.5 stars out of 5 — Excellent; offers most consumer-friendly features

4 stars out of 5 — Very good; offers many consumer-friendly features

3.5 stars out of 5 — Good; may not offer something important to you

3 stars out of 5 — Fair; missing important consumer-friendly features

2.5 stars out of 5 — Poor; proceed with great caution