Lending Club operates through an online platform from where they allot loans such as personal loans and branchless banking to people in need. With their direct dealing with customers, the investors and financial institutions back them to grant loans to people.
The company is based in San Francisco in the United States, from where it carries out all its operations like offering personal loans. These loans could be used to pay off credit card bills, the expense incurred on events like weddings, vacations, etc., amongst other things.
Basic Loan Information
Lending Club offers personal loans in the range of $1000 to up to $40,000. So if an individual has a good credit score, they can qualify for a larger loan amount. Individuals with lower than average credit scores will be granted a lower loan amount with a high APR.
The company has two different loan terms, 36 months and 60 months. The minimum credit score requirement is 600 on the FICO scoring model. Moreover, the APR rate given by the company falls in the radius of 7.04% to 35.89%, which is directly related to the credit score.
Pros & Cons
Lending Club has some pros and cons to help a person make a financially sound decision. They include the following.
- The company does not charge clients an application fee or even a prepayment penalty.
- APR could be checked with the company, which will not adversely impact the credit score.
- The Better Business Bureau (BBB) has ranked the company in a higher rating due to their customer reviews.
- Efficient loan approval process granting loan within a few days.
- A co-borrower can be added to improve the credit score and reduce the financial burden.
- The company offers a prequalification application to aid the customer in understanding their loan rate.
- Origination fees incurred by the customer within the radius of 1% to 6% of the loan amount.
- Fee charged from the client after late payment is given that the grace period is over.
- The company offers a higher APR relative to the market and its competitors.
- The company has restricted availability for the loan terms (36 months and 60 months)
As stated before, the individual should have a minimum credit score of 600 to qualify for the loan. The average credit score requirement for the company is 705 on the FICO scale. So the borrowers with fair credit qualify for the loan, but only those credit-worthy candidates are given a chance to enjoy competitive APR and loan period and loan amount.
Applicants are needed to show proof of funds during the application process where the Debt to Income (DTI) ratio is less than 40% for individual applicants and 35% if a co-borrower is involved. Moreover, the applicant must be above the legal age and should be a US citizen.
Main Loan Features
Lending Club offers personal loans to people who are unsecured and have to pay back with interest after the loan has been received. The loan is returned in intervals depending on the loan amount, period, and APR.
The loan can be used for balance transfers, medical bills, and home improvement. The loan cannot be used for post-secondary education, investments like cryptocurrency, and illegal activities.
The Lending Club accepts joint applications for personal loans. Furthermore, loans for $1000 or more are readily available that borrowers can qualify for if they have a fair credit score. The company even has a mobile application that is only for banking purposes. The loan application/status can be tracked down from their website.
Rates & Fees
As mentioned earlier, the APR for personal loans is between 7% to 35%, with the average APR amounting to 15.95%. The application is weighed on several factors that even include the credit history and the borrower's DTI ratio. The DTI value should be less than 40% to be awarded the loan.
Customers have to pay a one-time origination fee in the range of 1% to 6% of the total loan amount. This fee is directly related to the borrower's credit history. The average rate at which the borrowers are charged the fee is 5%.
Borrowers have to pay a fee for late payment for the loan once the 15 days grace period is over. They have to pay a 5% fee of the loan amount or $15, and the higher of the two amounts will be chosen.
The loan process for the Lending club includes the following steps. They include
1. Check the rate
The company offers a prequalifying application through which prospective customers can check their rate for the loan without affecting their credit score.
2. Select the best loan.
The company will offer multiple loan products to choose from, so an individual should choose their loan depending on your preference and requirement. They should keep in check the requirements for each loan like APR, loan period, etc.
3. Apply and verify the information.
Through their website or mobile application, a person can apply for the loan by filling their online application and submitting relevant documents like proof of funds, credit report, full name, address, etc.
4. Get the loan funds.
After the verification has been carried out and the loan agreement has been signed, the funds will be available to the customer. They should check the total amount, and a due diligence process should be carried out.
After the loan amount has been approved and deposited in your bank account, the repayment process shall begin in which they would need to pay back the company the amount with interest.
The company has two loan periods, 36 months and 60 months, from which the customers need to choose. The repayment should be carried out promptly with the appropriate interest rate allotted to you for the loan amount. Any delay in the repayment will result in fees and a penalty fee of 5% of the loan amount or $15, whichever is high.
The loan agreement signed by you at the time of the application will have a list of all the do's and don'ts the customer should avoid doing.
According to BBB, the company has a great customer review experience with an efficient customer service department that has aided their customers 24/7. The company responds to any complaints with a prompt response, and from the 75% of the responses it has made, the customers are satisfied with the answer and overall experience.
Most complaints were about making payments, incorrect credit reporting, and unexpected hidden fees. All of them were resolved promptly.
Even though the company has streamlined its entire online process for the users' convenience, Lending Club personal loans are best for those who have excellent or at least fair credit ratings from the three major credit bureaus. Moreover, people who can pay back the loan amount during the application process are more suitable to apply at this company. And in this case, people who need a loan for as small as $1000 can apply for Lending club's loans.