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LendingClub Personal Loans Review
Founded in 2007, LendingClub started in peer-to-peer lending for personal loans. The lender changed its business model in late 2020 in light of acquiring Radius Bank, but LendingClub personal loans are still alive and well. LendingClub offers some of the higher rates on personal loans than competitors. That being said, because LendingClub is one of the few lenders to offer loans to those with fair credit scores, it makes sense why it may have higher rates.
Using our SimpleScore methodology, we compare personal loans based on maximum rates, loan size, customer satisfaction, support and fees. While LendingClub might be the right option for some borrowers, it’s important to consider the company’s shortfalls as well.
LendingClub personal loans at a glance
|Fees||1%–6% origination fee5% or $15 late fee|
|Eligibility requirements||Be a US citizen or permanent residentBe at least 18 years oldHave a verifiable bank account|
|Best for||Fair or bad credit borrowers|
|Not for||People who need fast funding|
|Standout feature||No prepayment fees|
|LendingClub customer service||888-596-3157Contact form|
What we like about LendingClub personal loans
Accepts minimum credit score of 600
Borrowers with bad credit know just how hard it can be to get a loan. Luckily, LendingClub offers personal loans to those with credit scores as low as 600. Keep in mind that there’s a trade-off — LendingClub’s rates are higher than many of its competitors. That being said, it might be a good option if you can’t find a loan elsewhere.
[ Read: Is a Personal Loan My Best Option? ]
You don’t have to worry about ending up with a hard inquiry on your credit report just for applying for a LendingClub personal loan. The lender offers soft credit inquiries, meaning it will check your creditworthiness without a hard inquiry. That way, if you’re denied a loan or choose not to take it, you don’t have to worry about the credit hit.
Flexible personal loans
LendingClub offers personal loans for amounts as little as $1,000 all the way up to $40,000. And the company allows you to use your personal loan for just about any purpose. Whether you’re consolidating debt, starting a business or something else, you may qualify for a LendingClub loan.
Things to consider
Origination fees on personal loans
LendingClub charges an original fee of 1%–6% of your loan amount — based on your credit rating — and it is subtracted from the loan. This means that borrowing $10,000 with a 2% origination fee means you really get $8,000 in your bank account. Many lenders offer personal loans without origination fees, meaning you might be able to save money by getting your loan somewhere else.
LendingClub vs. the competition
LendingClub and Prosper both started as peer-to-peer lending services, meaning when you borrow, you’re really borrowing from individuals who crowd-fund personal loans. Then, as you pay your loan off, the investors get their money back with interest. Because LendingClub is pulling out of the peer-to-peer lending industry, the two are no longer direct competitors. However, both still offer personal loans of up to $40,000 with terms up to 60 months. That being said, Prosper offers lower starting rates than LendingClub. Read our full Prosper personal loan review.
Upgrade offers personal loans up to $35,000. Upgrade, like LendingClub, requires an origination fee. But with a fee that ranges from 2.9% to 8%, it has the potential to become expensive quickly. One benefit of Upgrade is that you could have your money as quickly as the next business day, while you should expect to wait at least two to four days with LendingClub.
SimpleScore: 2.8 / 5
Like Prosper, PeerForm offers peer-to-peer lending for personal loans. PeerForm has much lower starting rates than LendingClub. PeerForm also charges origination fees, but its rate of 1%–5% of the loan is slightly lower than LendingClub’s 1%–6%. But PeerForm’s loans only up to $25,000, and it only offers loan terms up to three years. Read our full PeerForm personal loan review.
How much will a LendingClub personal loan cost?
How much your LendingClub personal loan costs will depend largely on the amount you plan to borrow and your credit score. The best interest rates and lowest origination fees are reserved for those with the best credit scores. Borrowers with bad credit may pay up to 35.89% in interest and 6% for an origination fee. LendingClub late fees may also apply — 5% or $15, whichever is greater — if you miss your monthly payment.
Cheaper alternatives to LendingClub personal loans
LendingClub’s personal loans can quickly become expensive for those borrowers without good credit. Even borrowers with excellent credit will likely end up paying more with LendingClub than they would elsewhere.
[ See: How Personal Loans Work ]
If you have good credit and need a personal loan, consider online lenders such as LightStream and SoFi, both of which offer starting rates below 6% and loans as high as $100,000. And companies such as Upstart and Upgrade offer lower rates while still accommodating borrowers without good credit. Be sure to shop around because the rate you get for your situation may vary.
LendingClub personal loan requirements
Before you can get a personal loan through LendingClub, you’ll have to fill out an application so they can check your creditworthiness. To qualify for a LendingClub personal loan, you’ll need:
- A credit score of at least 600
- A favorable debt-to-income ratio
- To be a US citizen or permanent resident, or living in the US on a valid long-term visa
- To be at least 18 years old
- A verifiable bank account
Depending on your creditworthiness, LendingClub may also ask you to add a co-borrower or co-signer to your application.
Bad credit loans with LendingClub
LendingClub is one of the best lenders on the market for borrowers with bad credit. Many lenders only offer personal loans to borrowers with good credit, and anything under 650 is considered bad credit. But borrowers with fair and bad credit could be eligible for a personal loan through LendingClub.
[ Read: How to Get a Loan With Bad Credit ]
Keep in mind that with bad credit, you’re unlikely to get the best rates the company has to offer. According to LendingClub’s website, it’s lowest rates are for applicants with:
- A high credit score
- A low debt-to-income ratio
- A long history of successful credit
LendingClub in the news
- In April 2020, LendingClub announced that it would be laying off 460 employees, which amounted to about 30% of its staff. CEO Scott Sanborn announced that he will take a 30% pay cut, while the rest of the executive team would see a cut of 25%. This news came after the COVID-19 outbreak, as the company struggled to find new investors to fund loans.
- In October 2020, LendingClub decided to end its peer-to-peer lending business. Peer-to-peer lending has struggled throughout 2020. CEO Sanborn announced that the company would be buying Radius Bancorp Inc. and pursuing a bank charter.
- LendingClub released its third-quarter financial statement in November 2020. Though the company has seen significant declines throughout the year, it improved a few key performance indicators, such as its loan originations. Overall the company saw a loss of $23.1 million in Q3.
Last updated November 2020 – Updated editorial review of the lender
We welcome your feedback on this article and would love to hear about your experience with the personal loans we recommend. Contact us at firstname.lastname@example.org with comments or questions.