LendingClub Personal Loan Review

Learn if LendingClub personal loan rates and terms fit your needs

Image shows one woman holding a bag of money, and the other holding a box full of documents. Text reads: "What to know about lending club: lending club is one of the first peer-to-peer lending services, and it's still a major player in the peer-to-peer marketplace. Instead of borrowing money from a bank, you borrow from "investors". Often less expensive than loans from brick-and-mortar banks, and potentially easier to qualify for"

 The Balance / Maddy Price

LendingClub is a pioneer in online lending that began matching personal loan lenders and borrowers in 2007. Today, it’s the largest peer-to-peer (P2P) lending platform, with over 3 million customers and $12.3 billion in new loans issued in 2019.  With no branches or physical locations, this P2P personal loan lender works with borrowers entirely online.

Who Is LendingClub Best For?

LendingClub can accommodate a wide range of borrowers. While it also offers business loans, auto refinancing, and health care payment support, it may be an especially good fit for personal loan borrowers who:

  • Have a FICO score of 600 or higher
  • Need to borrow between $1,000 and $40,000
  • Want to pay off debt within five years
  • Don’t mind paying an origination fee if the interest rate makes it worthwhile
  • Want to apply for a loan together with their significant otherLendingClub Pros and Cons
Pros
  • Small loans starting at $1,000 available

  • 15-day grace period on late payments

  • Fixed-rate loans

  • Joint loans allowed

Cons
  • Origination fees

  • Potentially high rates

Pros Explained 

Small Loans Starting at $1,000 Available

It’s best to minimize borrowing, and you might not need much more than $1,000. Some lenders require higher minimums, such as $5,000. With those larger loans, you may have origination fees that amount to a higher dollar amount, more interest charges, and bigger monthly payments.

15-Day Grace Period on Late Payments

Sometimes, life throws you a curveball. If you miss your payment date, you can avoid penalty charges by completing the payment within 15 days after your deadline. Still, it’s best to pay on time because interest charges continue to add up, and each payment reduces the balance you’re charged interest on. 

Fixed-Rate Loans

A fixed-rate is not unique to LendingClub, but it’s worth noting as you shop lenders. With a fixed rate, your monthly payment will not change if rates rise, making it easier to manage your budget.

Joint Loans Allowed

Having two people apply may improve your chances of getting approved. LendingClub considers the income and credit history of both borrowers, so adding another person’s income (or applying with somebody who has a higher credit score) may help you qualify for a lower rate.

Cons Explained

Origination Fees

LendingClub charges 2% to 6% for origination fees. An origination fee comes out of your loan proceeds, reducing the amount you receive. As a result, you need to account for those fees when you calculate how much you need. An origination fee isn’t necessarily bad if you can secure a low rate, but if you pay off your loan quickly, the tradeoff of paying a fee to get a lower rate may not be worth it. 

Potentially High Rates

Borrowers with high incomes and credit scores may get the lowest rates. But at the highest rates, you pay dearly to borrow, and it may be best to explore alternatives to borrowing money. LendingClub rates go up to 35.89% APR.

Like many other banks and lenders, LendingClub starts charging interest as soon as your loan is issued, even if the funds aren’t deposited into your bank account until several days after that. Keep this in mind, especially if you’re borrowing to pay off other debts—you’ll pay interest on both loans until you successfully pay off your existing debt.

LendingClub Personal Loan Rates & Terms

What can you expect when you borrow from LendingClub?

  • Interest rates: From 10.68% to 35.89% APR depending on creditworthiness
  • Repayment term: 36 or 60 months (3 or 5 years)
  • Fixed-rate: Rate does not change, so your payment remains the same

The average rate on a 36-month personal loan at LendingClub as of May 13, 2020 was 11.77% APR, and the average rate on 60-month loans was 13.86% APR. Your rate may be higher or lower, depending on your credit history, income, and other factors.

How Much Can You Borrow With LendingClub?

You can borrow between $1,000 and $40,000 with a single loan. LendingClub may allow you to take out another loan in some cases, but the total amount you borrow from LendingClub must not exceed $50,000. When deciding how much to lend, LendingClub reviews your finances and keeps the loan amount (and monthly payment) at a level designed to be affordable for you.

The minimum loan amount is $3,025 for borrowers in Georgia and $6,001 for borrowers with a rate greater than 12% in Massachusetts.

Remember that origination fees come out of your loan proceeds. You only pay if you get approved and borrow money, and the fee reduces the amount you receive. As a result, you have to apply for more money than you actually need. For example, if you need $1,000 and LendingClub charges an origination fee of 4.0%, you’ll need to borrow $1,041.67 to end up with the full $1,000 after paying that fee (4.0% of $1,041.67 is $41.67, which leaves you with $1,000).

You can use your loan proceeds for almost anything, including debt consolidation, home improvements, major purchases, and more.

LendingClub Personal Loan Fees

  • Late payment fee: After a 15-day grace period, 5% of the payment amount or $15, whichever is greater
  • Prepayment penalty and fees: None 
  • Origination fees: A one-time, upfront fee ranging from 2% to 6% of your loan amount

How to Get a Personal Loan From LendingClub

To see if you qualify for a personal loan, visit LendingClub.com and start by checking your rate. Doing so will not affect your credit, and you can get more details on how much a personal loan might cost. You may receive multiple options to choose from, and according to LendingClub, most people get their money within four days of applying.

The Bottom Line

If you need to get a personal loan—especially a small one—it’s worth including LendingClub in your shopping list. You may be approved to borrow with a credit score of 600 or better, and rates vary depending on your creditworthiness. If your credit is less than stellar, there’s always the option to use a co-borrower, making it easier to get approved and potentially fund large purchases. As with any personal loan, be sure it makes sense to borrow and that you can repay the money.

If you have great credit, you can borrow from LendingClub at a relatively low cost. But at the highest rates, LendingClub can be expensive, adding a significant amount to the cost of whatever you’re borrowing for. Unlike with credit cards, there is an end in sight with a 36- or 60-month loan, but there may still be better options. Especially if you have bad credit, check with small, local banks and credit unions for more borrower-friendly terms. Also, if you plan to pay off the debt within one year, a 0% balance transfer might help you avoid origination fees and pay less in interest.

Article Sources

  1. LendingClub. "Personal Loans." Accessed May 14, 2020.

  2. LendingClub. "LendingClub Reports Fourth Quarter and Full Year 2019 Results." Accessed May 14, 2020.

  3. LendingClub. "Amounts for Personal Loans." Accessed May 14, 2020.

  4. LendingClub. "Late Payments." Accessed May 14, 2020.

  5. LendingClub. "Personal Loan Rates and Fees." Accessed May 14, 2020.

  6. LendingClub. "LendingClub Statistics, As of March 31, 2020." Accessed May 14, 2020.