Everything about Lending Club Personal Loans: 11 questions about LendingClub’s personal loans
We’re going to break down everything you need to know about personal loans from LendingClub. We’ve spent years working in the lending industry and we track dozens of lenders. We’ll give you the information you need to decide whether to use them to consolidate credit card debt, use them to cover a monthly shortfall, or get the funding you need for a major purchase.
The first thing we are going to look at is how much you can borrow from LendingClub.
Their minimum loan amount is $1,000. If you just need a little money to cover a short-term emergency LendingClub could be a good option. That is a lower minimum than many other lenders. If you are looking for a more substantial amount of money, LendingClub will lend as much as $40,000. That’s a pretty good top amount. Some of LendingClub’s competitors will offer up to $50,000.
LendingClub offers loans with terms between 2 and 5 years. This is a pretty standard range for personal loans. Of course the term will be dependent on the loan amount. If all you’re borrowing is a thousand dollars, you should not take two years to pay it back.
Now let’s look the cost of the loans. LendingClub’s minimum APR is 8.98%. Their maximum is 35.99%. Only about 10% of borrowers can qualify for their lowest rate. That top rate is a common ceiling for a lot of lenders, so it really doesn’t tell you much about what kind of rate you could get.
LendingClub only offers unsecured personal loans.
This means that you don’t have to put up any collateral to secure the loan. I like unsecured loans because additional financial setbacks are less likely to create a domino effect on your finances. If your loan is secured by the title of your motor vehicle, the lender can repossess your car if you run into trouble repaying the loan. That can add to the hardship. Securing a loan, though, can make it easier to get approved, borrow more money, or get a lower interest rate. If you need a secured option, you would have to find another lender.
LendingClub targets borrowers who have fair credit scores.
I think the likely range for this lender is between 620 and 700. These are guidelines. Lenders don’t usually use credit score to determine eligibility. If your credit score is on that lower end, but you have other positive financial metrics, they might approve you. Likewise, having a higher credit score doesn’t guarantee you will be approved. LendingClub will make a decision on things like payment history, debt-to-income ratios, utilization, amount and type of income, and other financial information. The good news is that LendingClub will only do a soft credit check when you apply, so checking with them won’t hurt your credit score. They will only do a hard credit inquiry when you accept the loan.
If you are using the loan to consolidate credit card balances or other debt, LendingClub will directly pay off those other creditors with the proceeds of the loan for you. It’s convenient when a lender will do that, but it also shows that the lender knows that the loan will replace other debts and not stack on top of them. Because of that, the new loan won’t change your debt-to-income ratio. That should make it easier to be approved by them. It’s good that LendingClub offers this service.
One way to improve your chances of being approved is to add a cosigner to your loan. But LendingClub doesn’t accept cosigners. A cosigner is someone who agrees to pay back the loan if you fail to. If a cosigner has a better credit profile than you do, they can significantly improve your chances of being approved.
LendingClub charges an origination fee that will be between 3% and 8%.
A little more than half of the lenders we track charge an origination fee. Any fee over 6% is getting to be on the high side. But, 8% is not the highest in the industry. So, these numbers aren’t bad. The origination fee is a percentage of the borrowed amount and comes out of the proceeds of the loan. Remember that the origination fee is accounted for in the APR. The APR will include the origination fee and the interest rate. If you get a low APR, but have a high origination fee, you still have a low-cost option. As a rule of thumb, you want a lower origination fee if you plan on paying the loan off early. When you pay a loan off early, you save on the interest you would have paid, but origination fees are not reimbursed.
If you are late on a payment, LendingClub will charge you either $15 or 5% of the late amount, whichever is higher. These are pretty standard rates, but almost half of the lenders we track do not charge late fees at all.
Some lenders have other fees as well. LendingClub does not charge any additional fees.
So let’s summarize LendingClub’s personal loans.
LendingClub has a pretty good range of loan amounts, offering smaller loans than many others. Their APRs aren’t anything special, so it will really depend on what they offer you. They focus on people with Fair-to-Good credit. And they have a pretty standard fee structure. I think LendingClub is a pretty decent lender. But, they don’t stand out in any of the ways another lender might. They are pretty middle-of-the-road.
For you, the most important thing might be whether you can get the money you need at the lowest possible APR. That’s why we always recommend that before you accept a loan, you should shop around. Find the best deal. At The Yukon Project, we’ve tried to make shopping around easy. If you visit our marketplace page, you can apply to any one of our other featured lenders. Behind the scenes, we will check your rate with up to 40 other lenders. Our partners use a soft credit check, so applying won’t hurt your credit score. We will show you all of the approved offers so you can pick the loan that’s best for you.
If you have any questions that we didn’t address, leave a comment below and we will try and answer it. If you found this video useful, please like it and subscribe to our channel. Thanks for watching.
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