Lending Club Personal Loans
Lending Club is a peer-to-peer lending company, claiming the title of the world's largest online credit marketplace. Lending club has emerged as a leader in making low interest personal loans. As a peer-to-peer lender, Lending Club allows borrowers to access low interest rates via a user friendly online or mobile interface. Loans of up to $40,000 are available with repayment terms of up to 5 years. When you apply for a loan with Lending Club, they perform a soft credit inquiry so that it does not hurt your score, an added bonus when shopping for a loan.
Lending Club operates completely online, keeping costs low and delivering a satisfying user experience. The result is interest rate savings for borrowers. Part of Lending Club's mission is to create an efficient online marketplace, transforming banking into a straightforward, transparent and efficient business while helping people meet their financial goals.
Personal Loans Terms, Interest and Fees
There is no fee for applying for a loan with Lending Club, and all subsequent fees are disclosed up front with your loan offer. Interest rates are fixed, so the payment remains the same for the term of the loan. There is no prepayment penalty for paying off loan balances ahead of time. There is a loan origination fee charged by Lending Club. They take this fee from your loan amount before turning over funds to you.
Successful loan application candidates receive a menu of loan offers. Each borrower is assigned with a grade from A to G. The interest rate, loan origination fee and annual percentage rate (APR) are tied to the grade assigned your loan. The APR indicates the loan cost on an annual basis, allowing easy comparison with other loan or credit card products. The Lending Club APR includes both the interest rate and the loan origination fee.
Lending Club's A to G loan terms table shows a range of interest rates, fees and APRs depending on your loan grade and the terms of your loan. Interest rates are as low as 5.99%, with a 1% loan origination fee for the most qualified borrowers, but rates and fees can climb steeply from there depending on your credit score and loan terms.
For borrowers with good credit, Lending Club offers low to competitive rates on personal loans. But for those with lower credit scores, or a high debt-to-income ratio, loans may be denied or offered at a higher interest rate. For the best rates from Lending Club, borrowers should check their credit report to see if it's their score is 600 or higher. Check your report for errors that can affect the score prior to applying. You can keep your interest rate down accepting a 36 month loan term (rather than a 60 month term). However, it's important to keep your eye on the amount of the payment with a 36 month loan. Can you afford the payment?
Here are two sample loan scenarios from the Lending Club site:
In the case of a $6,000 36-month loan, with an interest rate of 6.99% and a 2% origination fee of $120.00, the borrower receives a loan amount of $5,880 and makes 36 monthly payments of $185.24 at an APR of 8.36%.
In another scenario, generating a $20,000 loan over 60 months at a rate of 7.62% with a 3% origination fee of $600.00 results in a loan funding amount of $19,400 requiring 60 monthly payments of $401.90 at an APR of 8.91%.
There are some other fees charges by Lending Club in specific situations should they arise. The Unsuccessful Payment Fee of $15 is charged should your automatic payment from your bank fail. The Late Payment Fee is charged after a 15 day grace period, at the greater of 5.00% of the unpaid installment amount, or $15. Borrowers who choose to make payments via paper check are charged a fee of $7.00 to process the check. There is no fee for making your payments via automatic debit.
Application and Approval Process
Lending Club is able to quote an interest rate quickly, just a couple of screens and a few minutes into the process. Lending Club touts their application process as fast and easy. Borrowers can apply from their computer or mobile device in minutes, with no impact on their credit score. Note that Lending Club does not make loans in Idaho or Iowa.
After you apply, The Lending Club verification team may contact you to request financial information. In some cases they may contact your employer. Applicants can also upload financial documents online.
Lending Club generates loan offers for upon approval with a variety of loan terms and interest rates. You can accept the loan offer that looks right to you. Lending club posts your loan for investors to view. Interested investors back your loan online, without knowing your personal information. The approval and funding process typically takes about a week.
You can check online on the funding of your loan. Once your loan is funded, the money is deposited to your bank account within four business days.
Loan Tools and Resources
Once your loan application is approved, instructions are provided to guide you through to bank account verification process. It is recommended to sign up for automatic payments to avoid the $7 check processing fee.
Approved borrowers can log into their Lending Club Account Summary at any time to view the status of their funding process and loan details, as well as to upload financial documents such as pay stubs or bank statements.
You can watch the progress of your loan funding on your account summary page. In rare cases, borrowers may have to re-list their loans if they are not funded in two weeks.
While the account summary is a useful tool, consumer reviewers rate Lending Club's customer service as average.
Is Lending Club Safe and Secure?
Lending Club has established itself as a leader in the dynamic peer-to-peer lending market. Founded by Renaud Laplanche in 2007, this well-funded company believes that borrowers are less likely to default to members of their own community. Lenders and borrowers are matched using an in-house algorithm designed to minimize risk.
Lending Club is great for those who want to consolidate debt, pay down credit card balances or fund a home improvement project. With its ease of use, soft credit check, low interest rates and quick turn around, Lending Club gets a thumbs up as one of the best options available.
Verdict - Great
Lending Club is a well-established company with a good reputation. They are also more widespread that other peer-to-peer lenders and is available in every state except Idaho, Nabraska and Maine.