LendingClub Personal Loans Review 2021: Good Customer Reviews, But High APRs

A photo to accompany a review of LendingClub personal loans Illustration/NextAdvisor
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Originally a peer-to-peer lending platform that shut down its individual investor marketplace in 2020, LendingClub now calls itself “America’s leading digital marketplace bank.” LendingClub funds a portion of loans through its own FDIC-insured LendingClub bank, and the rest through institutional investors in its loan marketplace. Besides personal loans, LendingClub also offers business loans, auto refinancing, and patient solutions for financing medical care. 

LendingClub ranks relatively high in customer reviews on its Better Business Bureau (BBB) page, with many customers calling the loan process quick and easy. According to LendingClub, most loans are approved within 24 hours and funded within a few days. Would-be borrowers should know that LendingClub charges origination fees and late fees, and its APRs are higher than some of its competitors. But a minimum credit score requirement in the “fair” credit score range, the ability to check your rate online without a hard credit inquiry, and the option to add a co-borrower make LendingClub an option worth considering for those with less-than-stellar credit. 

What to Know Before Getting a Personal Loan

Personal loans can be a quick way to access cash when you need it, but it’s important to use them wisely. Before taking out a personal loan, you should consider whether it’s really necessary and come up with a plan to pay it off. Always do your research and comparison shop with multiple lenders to find the best personal loan rate

Be aware that the exact rate you get may differ from the advertised rates since rates depend on your credit score, income, and loan value and terms. Some lenders will let you pre-qualify for a loan or check your rate with only a soft credit inquiry, which won’t affect your credit score. Other lenders may require a hard credit inquiry, which could lower your credit score by a few points. When you officially apply for a loan, all lenders will require a hard credit inquiry. In addition to the interest rate, check if the lender charges any fees — such as origination fees, prepayment penalties, or late fees — that might raise the cost of the loan. 

Pro Tip

You can check your rate with LendingClub without a hard credit inquiry. We recommend checking rates from multiple lenders in order to find the best deal. 

Once you’ve taken out a loan, be sure to make payments on time to avoid any additional fees or interest charges. Late payments can also damage your credit score.

Finally, know the difference between a secured loan, which uses an asset such as a house or car as collateral, and an unsecured loan, which requires no collateral. Secured loans may offer lower interest rates, but they’re riskier for the borrower since you can lose your collateral if you default on the loan. 

Alternatives to Personal Loans

Although a personal loan is a viable strategy to pay for big expenses, it’s not the only option. Some alternatives to personal loans include:

  • A home equity loan, home equity line of credit (HELOC), or a cash-out refinance. These three options are similar since they allow homeowners to tap into home equity for cash upfront. Because these financing methods are secured by your house, you may be able to get better rates than an unsecured personal loan. But each one has its unique pros and cons as well. 
  • A balance transfer credit card. Certain credit cards have introductory offers of 0%-APR for a set amount of time, usually 15-18 months. If you’re seeking to consolidate debt, one strategy is to transfer your debts on to one such card, pay off the balance before the introductory period ends, and pay no interest on the balance. If you use a balance transfer credit card, it’s especially important you have a plan to pay off the balance before the end of the introductory period; otherwise, you’ll be on the hook for high credit card APRs. Also, be aware that credit cards with balance transfer offers are typically only available to those with good credit. 
  • Personal savings. If your money needs aren’t urgent, consider saving in advance for a big purchase and paying with cash rather than taking out a loan. Having an emergency fund in place can also help you in the event of unexpected expenses. Experts recommend having three to six months’ worth of expenses in an emergency fund. You can take these steps to start building yours now
  • Credit counseling. If you’re struggling with debt or need help managing your finances, many non-profit organizations offer free or low-cost credit counseling to get you back on track. While credit counseling services won’t provide you with money directly, they can provide expert financial advice and direct you to other resources that may be able to help. 

Pros and Cons of LendingClub Personal Loans 

Pros

  • No application fees prepayment penalty

  • You can check your rate with LendingClub without impacting your credit score

  • Available in every state except Iowa

  • Ranks highly in customer reviews with the Better Business Bureau (BBB)

  • Loans funded within a few days

  • You have the option to add a co-borrower

Cons

  • LendingClub charges origination fees costing 1%-6% of the loan amount

  • Fees for late payments after a 15-day grace period

  • Not available in Iowa or the U.S. territories

  • LendingClub has higher APRs than many competitors

  • Other lenders offer same or next-day funding

LendingClub Personal Loans Compared to Other Lenders

LendingClubAvantUpgrade
Current APR8.05% to 35.89%9.95% to 35.99%5.94%-35.97%
Loan Term Range36 and 60 months24 to 60 months24 to 84 months
Loan Amount$1,000 to $40,000$2,000 to $35,000$1,000 to $50,000
Credit Score Needed600580620
Prepayment PenaltyNoneNoneNone
Origination Fee1% to 6%Up to 4.75%2.9% to 8%
Unsecured or Secured DebtUnsecuredBoth unsecured and secured optionsUnsecured

The above rates and loan information is accurate as of June 11, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information has changed since it was last updated. Some of the lowest advertised rates might be for secured loans, which require collateral such as your home, car, or other asset. Also, some loan offerings may be specific to where you live.

How to Qualify for a LendingClub Personal Loan

LendingClub requires that all borrowers be at least 18 years old, have a verifiable bank account, and are either a U.S. citizen, a permanent resident, or living in the U.S. on a valid, long-term visa. LendingClub loans are not available to residents of Iowa or the U.S. territories.

Although LendingClub doesn’t list any credit score requirements on their website, a PR representative confirmed that the minimum credit score required to qualify for a personal loan is 600. Keep in mind that even if you qualify for a loan, having a lower credit score will likely mean getting higher interest rates or qualifying for a lower loan amount.

LendingClub doesn’t have any minimum income requirements, although they do require proof of income. Your debt-to-income ratio, along with your credit history and credit score, may affect your loan approval and interest rate. 

If you have trouble qualifying for a loan due to a poor credit score, LendingClub allows you to add a co-borrower, which may help you qualify. Adding a co-borrower to a personal loan has its risks and benefits, so be sure to consider the pros and cons before starting a joint loan application.

LendingClub allows members to have up to two active personal loans through LendingClub at the same time. However, the combined minimum outstanding amount must be less than $40,000, and you’ll need a history of on-time payments on your first loan in order to qualify for a second one. 

Who Should Get a LendingClub Loan 

LendingClub offers unsecured loans with a minimum credit requirement of 600, making it a good option for those who don’t have good or excellent credit but also want to avoid secured loans. But temper your expectations; a lower credit score likely means qualifying for a lower loan amount and a higher interest rate. The ability to check your rate without a hard credit inquiry makes it easy to shop around for the best rate and lets you check out LendingClub’s options without risk. 

LendingClub makes it easy to use its loans for a variety of purposes, from covering an emergency expense to completing home improvement projects. And if you’re planning to use your personal loan to consolidate debt, the company can save you a step by transferring some or all of your loan money directly to your creditor.

How to Apply for a LendingClub Personal Loan

Before applying for a personal loan, first decide if this particular method of financing is right for you and your financial goals. Other options, like a balance transfer credit card, home equity loan, or building a savings fund, may be a better fit. 

If you’ve already decided that a personal loan is the best option for your financial needs right now, here’s how to get one from LendingClub:

  1. Check your rate. Fill out LendingClub’s application form to see what kind of rates you can get for the loan balance you need. This doesn’t initiate a hard credit inquiry, which means it won’t affect your credit score. If you qualify, completing this rate check will pull up a few loan options.
  2. Choose the best loan for you. LendingClub will present you with multiple loan offers based on the data you gave them. Select the one that best meets your needs. 
  3. Submit your application and verify your information.  To formally apply for a loan, you’ll need to fill out the application form online and submit any documents needed to verify the information in your application. If you want to add a co-borrower to your loan, you can do so through the application. Some examples of documents you may be asked for include proof of address, proof of employment, and photo ID. LendingClub will also run a hard credit inquiry at this stage, which will impact your credit score. After you’ve submitted your application, you can check your to-do list in your account to see if there’s anything else you need to do. 
  4. Get your loan funds. Once verification is complete and you sign your loan agreement, your loan will fund. The money should be deposited into your account within a few days.  

LendingClub Personal Loans FAQs

Is LendingClub good for personal loans?

LendingClub has good customer reviews on its Better Business Bureau page and has relatively lenient credit score and income requirements, making it a good option for those with less-than-stellar credit. Even though the APRs offered by LendingClub are higher than some of its competitors, the ability to check your rate without a hard credit inquiry means you can check them out, at the very least, without any risk.

What credit score do you need for a LendingClub personal loan?

You need a credit score of at least 600 to qualify for a LendingClub personal loan. Keep in mind that even if you qualify for a loan, the best APRs are only available to those with the highest credit scores.

Can I get a LendingClub personal loan with bad credit?

LendingClub’s minimum credit score requirement of 600 falls is considered in the “fair” range by Experian. You won’t be able to qualify for a LendingClub loan if you have truly poor credit, but you’ll still have a chance if your credit isn’t good or excellent.

Does a LendingClub loan hurt your credit?

Opening up any new line of credit, including a personal loan, will cause your credit score to dip temporarily. But if you manage your personal loan responsibly and make on-time payments, it can help to increase your credit score.