LendingClub Personal Loans

Josh Patoka
November 11, 2020

LendingClub is one of the largest and oldest peer-to-peer lenders issuing personal loans up to $40,000 with a 3 or 5-year term and fixed monthly payments. Because individual investors fund loans, LendingClub states it takes the average borrower 7 days to receive their loan funds. Although the process can be longer than other lenders, it can still be quicker than using a traditional bank. If you have a credit score in the 600s, your approval odds can be higher as well.

Interest rates currently start at 10.68% APR and are as high as 35.89% APR. LendingClub is one of the few lenders that accept co-borrowers for joint loan applications. This can help you qualify for better loan terms, especially when one applicant has a lower credit score. An origination fee between 1% and 6% is the only initial fee LendingClub charges. There isn’t a prepayment penalty if you repay the loan early.

Where LendingClub Stands Out

Flexible borrower qualifications: Borrowers must have a minimum 600 personal credit score and 3 years of credit history to apply. Other peer-to-peer lenders can require a score of at least 640, or even 680, to apply.

May add a co-borrower: Most lenders only issue loans to individual borrowers. Being able to add a co-borrower can help offset a low credit score and help qualify for a better interest rate and borrowing amount. LendingClub requires a joint debt-to-income ratio of 35% or less.

Can borrow up to $40,000: Although other lenders offer loans up to $50,000, being able to borrow up to $40,000 is still a high borrowing amount. To qualify for high borrowing amounts, borrowers will need a high credit score and income plus a low debt-to-income ratio. Applicants can also borrow as little as $1,000, making LendingClub a flexible option for any borrower.

Interest rates as low as 10.68% APR: The most well-qualified borrowers may qualify for interest rates as low as 10.68% APR. These starting rates are competitive with traditional banks. The highest rates of 35.89% APR are competitive with other lenders.

Where LendingClub Falls Short

Origination fee up to 6%: LendingClub deducts an origination fee between 2% and 6% from the starting loan balance. The average origination fee is 5.2% for all borrowers, according to LendingClub. This fee is slightly higher than other lenders, but borrowers with excellent credit can qualify for a lower rate.

May take at least 7 days to receive funds: Individual investors fund each loan request. Waiting for multiple investors to buy notes means it can take longer to receive your loan funds than banks that may offer funding the next business day. Despite the potentially longer funding process, LendingClub may have lower loan costs than lenders offering next-day financing.

Not available in Iowa, Guam, or Puerto Rico: LendingClub currently doesn’t issue loans to residents of Iowa, Guam, or Puerto Rico. Many lenders are restricted from lending in certain states. LendingClub can lend in more states than other personal loan lenders.

Is LendingClub The Best Option For Me?

LendingClub is one of the best options for borrowers with a credit score of at least 600 who need a co-borrower to qualify for a loan. The interest rates are competitive for borrowers with fair, good, or excellent credit. The one reason to compare rates with another lender can be the potential 6% origination fee, which is higher than other lenders.