You won’t see a LendingClub location while driving to the grocery or dropping the kids off at school. As the first public U.S. neobank and a full-spectrum financial technology (fintech) marketplace bank, LendingClub is fully online. LendingClub’s acquisition of...

You won’t see a LendingClub location while driving to the grocery or dropping the kids off at school. As the first public U.S. neobank and a full-spectrum financial technology (fintech) marketplace bank, LendingClub is fully online.

LendingClub’s acquisition of Radius Bank in 2020 launched the organization into the world of personal banking, with high-yield savings accounts and checking accounts, CDs and more. But since 2007, more than 3 million members have relied on LendingClub for investments and loans. Since then, LendingClub has grown into one of the largest online lenders for personal loans.

LendingClub Personal Loans

Best for Small Loans

3.5 out of 5 Overall

Key Features

Low minimum credit score requirement Small loan amounts available bility to add a co-borrower

Get Details

You won’t find the lowest rates or most flexible loan terms with LendingClub, and if you have a $100,000 project to fund, you should look elsewhere. LendingClub is designed for those with bad credit (or who are on the path to good credit). With a low minimum credit requirement and small loan amounts, LendingClub personal loans give borrowers a low-risk shot at improving their credit score.

LendingClub Personal Loans

APY

7.04% to 35.89%

Loan terms

3 or 5 years

Loan amounts

$1,000 to $40,000

Origination fees

3% to 6%

Prepayment penalty

n/a

Minimum credit score requirement

600

LendingClub Loans: At a Glance

As mentioned above, you can now use LendingClub as a complete finance solution — open a checking account, tie it to a savings account and even start an investment account. Let’s drill down to the loan portion of LendingClub’s business specifically. With LendingClub, you can apply for:

In our LendingClub personal loans review, we’ll specifically focus on the pros and cons of a LendingClub personal loan.

While you can fund most goals with a personal loan, LendingClub specifically advertises credit card consolidation loans, balance transfer loans, debt consolidation loans and home improvement loans.

LendingClub Personal Loan Review

Still not sure if a LendingClub personal loan is right for you? Let’s dive in deeper to the specifics of the unsecured personal loans offered:

Rates

The lowest APR for a LendingClub personal loan is 7.04%. This is not competitive with some of the best personal loans on the market, but those other lenders require strong credit scores (and an automatic payment discount) to secure their very best offer.

The high end of LendingClub’s APR window is 35.89%, which can quickly make a $1,000 loan quite costly. For reference, the average credit card APR is just over 18%, so a personal loan rate that high is unattractive.

However, the average APR for a LendingClub loan is a more manageable 15.95%. Borrowers with credit scores in the higher 600s should expect a rate closer to that — and borrowers with good or excellent credit scores can expect the minimum APR. However, if you have a strong credit score, we strongly encourage you to consider an alternative for your personal loan, like Marcus by Goldman Sachs, SoFi or LightStream, the top three in our roundup of the best installment loans of 2022.

Fees

LendingClub boasts a lack of application fees and prepayment penalties, but that’s table stakes in today’s competitive personal loan market. Where other personal loan providers shine is in their lack of origination fees, and here, LendingClub falls short.

Currently, LendingClub charges an origination fee of 3% to 6%. On a $10,000 loan, a 3% origination fee is $300 and a 6% origination fee is $600. That makes this a costly loan even before the APR kicks in.

However, lenders that don’t charge origination fees likely also won’t lend to borrowers with a 600 credit score. Those with bad credit should expect less than favorable terms when applying for a personal loan.

Convenience

LendingClub may not offer the best rates or fees, but it excels when you dig into the actual loan process. For starters, you can pre-qualify online with only a soft credit pull. Soft credit pulls do not affect your credit score. The financial institution only performs a hard credit inquiry when issuing the loan.

It’s easy to apply for a LendingClub loan with a co-borrower. It’s the first step when applying online. Applying jointly means that you might get a lower rate and might be approved for a larger loan amount than you would if it were just your name on the personal loan application.

Managing your loan with LendingClub on the go is super easy. The mobile app has high scores on both the Apple App Store and on Google Play, and the online Member Center makes managing money and credit very easy. Using this resource, you can quickly check your credit score, credit utilization and debt-to-income ratio.

Borrowers with LendingClub loans for debt consolidation can even allow LendingClub to pay creditors directly on their behalf.

Some lenders are able to fund bank accounts the same day of loan approval. LendingClub falls short here, depositing loan funds within 48 hours. However, this is middle of the road; some lenders take even longer.

Flexibility

The loan amount with LendingClub isn’t very flexible. Loans top out at just $40,000, though we do appreciate that you can take out a loan for as little as $1,000.

Loan terms are very rigid. You can choose either a three- or five-year repayment plan.

However, a small win for flexibility: LendingClub allows borrowers to change their payment date, if needed.

Customer Satisfaction

LendingClub has been in business for nearly two decades and boasts more than 3 million customers. Mobile app scores showcase how much consumers appreciate the ease of use of the smartphone app, but online review sites also demonstrate how much customers appreciate their loan provider.

At publishing, LendingClub carries an A- on Better Business Bureau, 4.8 out of 5 stars on Trustpilot and 3.9 out of 5 stars on Consumer Affairs.

Credit

Credit where credit is due: LendingClub is an ideal personal loan provider for borrowers who are repairing their credit score. LendingClub has a 600 minimum credit score requirement and looks for a debt-to-income ratio of 40% or lower for borrowers. (Co-borrowers should have a debt-to-income ratio of 35% or lower.)

With loan amounts as low as $1,000, LendingClub offers an easy way for borrowers to build a credit history, and the risk is low, as monthly payments for a $1,000 loan over three years, should be quite manageable even with a higher interest rate.

LendingClub Personal Loan: Pros and Cons

If you are thinking about taking out an unsecured personal loan from LendingClub, whether to consolidate debt, finance a wedding or small purchase or complete a major home renovation, weigh the pros and cons before making a decision.

Frequently Asked Questions (FAQs) About LendingClub Personal Loans

Still have questions about opening a LendingClub loan? Here are the answers to some of the most common questions asked by our readers:

The Bottom Line

LendingClub’s personal loan option isn’t competitive in terms of rates and fees, but it offers convenience, easy-to-use technology and strong customer support. If you have bad credit and are on the road to rebuilding your credit score, LendingClub is one of the better loan options available.

Timothy Moore covers banking and investing for The Penny Hoarder from his home base in Cincinnati. He has worked in editing and graphic design for a marketing agency, a global research firm and a major print publication. He covers a variety of other topics, including insurance, taxes, retirement and budgeting and has worked in the field since 2012.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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