LendingClub Personal Loans Review

Pros

• The application process is fast and easy
• Funds are disbursed quickly
• Builds personal credit

Cons

• Low borrowing amounts
• Rates can be expensive

What Are LendingClub Personal Loans?

LendingClub was once the largest peer-to-peer (P2P) lender but now focuses on direct-to-consumer loans offered through WebBank. LendingClub offers auto refinancing, banking solutions, and business loans through a partnership with Accion Opportunity Fund, but is primarily known for its unsecured personal loans. Borrowers who don’t qualify for business loans (such as startups) may use these personal loans for entrepreneurial and business startup purposes.

However, these loans will not work for all borrowers, as you can only borrow up to $40,000 and may potentially receive a very high APR (30%+) if you don’t have a high credit score. You can check your eligibility and potential rates in a few minutes via the website without taking a hit on your credit score to see if this lender is right for you.

Services Offered

LendingClub’s personal loans are fixed-rate installment loans repaid over 2 - 5 years. They are easy to apply for online, and funds are released within days. You can use loan proceeds for any personal or business use, though you can only borrow up to $40,000.

LendingClub also offers auto refinance loans and business installment loans. Note that while LendingClub still offers business installment loans through a business loan referral service, LendingClub no longer originates these business loans. Applicants who pre-qualify for a business loan via LendingClub are now connected to a partner lender.

LendingClub’s low borrowing limits and limited loan options may not be the best option for many businesses, especially when compared to business lenders. As a result of these limitations, we’ve rated LendingClub’s personal loans at 2.2/5 for its offerings. However, there are no strict credit score or time in business requirements, so LendingClub’s personal loans can be a viable source of funding for startups and business owners with bad credit.

Borrower Qualifications

Compared to business loans, LendingClub personal loans have few requirements, which is why we’ve rated it a perfect 5/5 for this category.

Because this loan is based on your personal creditworthiness, LendingClub does not require that you’ve been running your business for a certain amount of time or make a certain amount of revenue. Lending Club also does not list any minimum required credit score on its website.

The only requirements for personal loan applicants described on LendingClub’s website are as follows:

• Be a United States citizen, a permanent resident, or living in the US on a valid, long-term visa
• Be at least 18 years old
• Have a verifiable bank account

While LendingClub does not state any minimum required credit score, it does consider your credit score, credit history, and other information that predicts the likelihood that you’ll make your loan payments. However, LendingClub allows adding a “co-borrower” to your application, which may help you qualify if your credit profile isn’t up to snuff.

It’s also worth noting that LendingClub reports your loan repayment information to the major credit bureaus, including both positive and negative information. This means that if you repay your LendingClub loan on time and don’t miss any payments, you can improve your credit score in the process.

Rates & Fees

These are the terms and fees for LendingClub’s personal loans:

LendingClub offers traditional installment loans. Borrowers receive the loan in one lump sum (less the origination fee) and repay in monthly fixed installments.

Your assigned interest rate corresponds to how creditworthy LendingClub perceives you to be, based on the information gathered from your application, including your credit history, credit score, and other information. To qualify for a low-interest rate with Lending Club, you will need a high credit score, a low debt-to-income ratio, and a long history of successful credit lines.

Note that in addition to interest, LendingClub charges a one-time fee called an origination fee. This fee is 3% - 8% of your borrowing amount, which is deducted from your funds before you receive the loan. LendingClub might also charge a check processing fee (if you pay with checks) or late payment fees. This lender does not charge a penalty for repaying your loan early, though it doesn’t reward customers for paying early, either.

LendingClub’s transparency surrounding rates and fees and fees that are on par with its competitors contributed to our score of 4.6/5 in this category.

Application Process

Potential borrowers can check their eligibility and rates without taking a credit hit via LendingClub’s online application. The application will ask you for basic information about yourself and your finances.

If you are approved, LendingClub will present you with a few potential borrowing options. If you like the offers, you’ll have to choose the one best suited to your needs to continue the process.

The next step is to confirm the information and submit documents for verification purposes. Assuming LendingClub doesn’t find anything that would bar you from receiving a loan, you will get your money (less the origination fee) as soon as investors fund the loan.

Currently, personal loans typically take as few as three days to be funded but may take longer if there are delays at some point in the process. While this is pretty fast, some lenders offer same-day or next-day funding. This had only a slight negative impact on our rating, which landed at 4.5/5.

Sales & Advertising Transparency

Between the main website and the FAQ, LendingClub’s website supplies most of the information you’ll need to know before applying for a loan or even while you’re paying the loan off. APR ranges, origination fees, other possible fees, and term lengths are disclosed in multiple places across the site. If you poke around a bit before applying, you shouldn’t run into any surprises.

It’s worth noting that many customers feel misled by LendingClub’s mailers, which claim the customer has been “preapproved” for a loan. Preapproval is not indicative of whether or not you’re qualified for a loan. LendingClub identifies potential borrowers through third-party sources but may find reasons to decline your application after gathering more detailed information about your situation. This — along with LendingClub’s sporadic updates on social media — contributed to our sales and advertising score of 3.4/5.

Customer Service & Technical Support

LendingClub has a very comprehensive FAQ, which covers everything from applying for a loan to how to navigate your account and how to make payments.

If your question isn’t answered there, customer service is available via phone or email. Unlike LendingClub’s business loan branch, borrowers with a personal loan do not have a dedicated account manager.

Most customers report positive experiences with LendingClub’s customer service, though a few customers have reported difficulty getting in touch with a person who could help solve their problem. These complaints were taken into consideration for LendingClub’s rating of 3.7/5 for customer service.

User Reviews

The reviews of LendingClub personal loans are generally quite good, but there are a few complaints, potential scams using LendingClub’s name, and a pending lawsuit to be aware of. Taking all of this into consideration, we’ve rated LendingClub a 4.2/5 based on overall user feedback and reviews.

Negative Reviews & Complaints

LendingClub is accredited by the Better Business Bureau. At the moment, LendingClub has over 1,100 complaints closed over the last three years.

LendingClub is currently involved in a pending lawsuit with the Federal Trade Commission (FTC), which alleges that LendingClub has not complied with FTC requirements regarding hidden fees and advertising standards. LendingClub has issued a response to the FTC refuting these claims, which can be found on LendingClub’s blog.

Here are the most common complaints specific to personal loans, based on customer complaints:

• Origination Fee: Some customers claim they were not aware of the origination fee before borrowing. However, I saw the fee disclosed in multiple places on the site.
• High-Interest Rates & Fees: Some customers felt that the interest rates and origination fees were more expensive than they would have liked, with some borrowers complaining about APRs as high as 30%+. If you don’t like the rate you receive from LendingClub, I’d suggest getting your rates from some other personal lenders for comparison; many online lenders can give you a quote within minutes, without affecting your credit score.
• Application Delays: While most customers get their funds promptly, some customers have reported delays during the process.
• Denial After Preapproval: LendingClub sends out mailers claiming that you’ve been “preapproved” for a loan. Unfortunately, this is simply a marketing tactic and does not imply that you will be eligible for a loan when LendingClub learns more about you.

It’s also worth noting that, according to the BBB, LendingClub’s name has been used in an advanced fee scam. Here is how the scam works:

Consumers applying for a loan at online sites other than LendingClub are subsequently being contacted by representatives claiming to be from LendingClub. Loan applicants are told their loan will be approved and the money deposited into their checking account but they first must pay what they are told is a security, insurance or other fee. They are asked that the money be put on a prepaid card like a green dot money pack or in a MoneyGram.

If in doubt, remember that LendingClub never charges application fees and that its loans are issued via WebBank.

Positive Reviews & Testimonials

LendingClub has several customer reviews on its website. On Credit Karma, LendingClub Personal Loans has a rating of 4.7 out of 5 stars based on 4,200+ reviews. The company has earned a 4.6/5 on Trustpilot based on over 5,800 reviews.

Here are commonly cited reasons why customers like LendingClub’s service:

• Fast application and funding process
• Informative customer service
• Affordable monthly payments
• Competitive interest rates

Additionally, many customers liked that they were able to complete the process entirely online without having to go somewhere or talk to somebody on the phone.

Final Verdict

LendingClub was one of the first lenders to offer online personal loans, and while it certainly has some competition now, it remains a worthy competitor for your business. Applicants with no business track record can qualify for a small loan, even if they do not have perfect credit. A minority of users complain about delays, misleading advertising, and difficulty getting in touch with customer service, but most customers report that LendingClub’s loans are fast, easy, and affordable.

Overall, we’ve given LendingClub personal loans a score of 4 out of 5 stars, making this lender a suitable choice for businesses that would benefit from a personal loan over a business loan.

Potential borrowers may benefit from making a few comparisons before settling on a loan from LendingClub or another online lender, though. Like LendingClub, many online lenders offer quotes instantly without affecting your credit. Head over to our startup loans review category to learn about your other potential options.

Business Loan & Funding Products Review Methodology

Merchant Maverick has been researching and reviewing business lenders since 2015. Our writers have tested over a hundred different funding products, including traditional term loans, online loans, lines of credit, start-up loans, merchant cash advances, and equipment financing. In each review, we evaluate rates and fees, services, eligibility requirements, application process, sales and advertising transparency, customer service, and user reviews.

Read more about how we rate business loans and funding products.

When comparing different lenders and loan products, we consider many data points, including the ease and transparency of the application process, interest rates, repayment structure, sales ethics, time to funding, revenue and time in business qualifications, and credit score requirements. Our lists of the best funding products include only those we’ve deemed worthwhile from multiple vantage points, and often share qualities such as widespread accessibility across fifty states, low rates, flexible requirements, and competitive borrowing amounts.

We spend an average of 10-15 hours researching and updating each one of our lists, making sure the loans and funding products included meet our internal standards for quality and reputation.

The Merchant Maverick Seal of Approval 🏆

LendingClub Personal Loans	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see LendingClub Personal Loans for yourself.

The Merchant Maverick Seal of Approval 🏆

LendingClub Personal Loans	Apply Now

After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Get started today and see LendingClub Personal Loans for yourself.