If you’re in need of a personal loan, you may have come across LendingClub in your search. LendingClub, an online lender, bank, and investment company, offers various loan options, including personal, business, auto, and medical loans. But is it worth it? Let’s dive into the details and find out if LendingClub is the right fit for your financial needs.
Review Summary: Pros & Cons
Before we get into the nitty-gritty, let’s take a quick look at the pros and cons of LendingClub personal loans:
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Pros:
- Fast online borrowing experience
- Personalized loan term offers
- No prepayment penalties
- Joint loans supported
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Cons:
- Restricted repayment terms of 3 to 5 years
- Controversial history under a former CEO
Fast Online Borrowing Experience
One of the highlights of LendingClub is its quick and easy application process. Within minutes, you can enter your desired loan amount, reason for the loan, personal contact information, and income details to receive a personalized loan offer based on your credit history and income. The initial application uses a soft credit inquiry, which won’t impact your credit score. If you decide to proceed with a loan, LendingClub will conduct a hard inquiry, which may have a temporary negative impact on your credit score.
Personalized Loan Term Offers
After completing the initial application, LendingClub evaluates various factors such as your credit score, outstanding debt, and income to determine your loan eligibility and offer you personalized loan terms. You’ll have the flexibility to choose from repayment periods ranging from three to five years. It’s important to take the time to select the best offer for your needs, as different terms may result in different interest rates and monthly payments. If you decide not to accept any loan terms, you can stop the application process without any cost or impact on your credit score.
Wide Range of Interest Rates
LendingClub offers interest rates that currently range from 9.57% to 35.99% APR. While rates below 10% can be competitive for some borrowers, those who qualify for rates of 30% or higher may find more favorable options with credit cards. It’s crucial to shop around and compare rates based on your financial situation. If you’re looking to consolidate credit card balances, consolidating to a loan with a higher interest rate is financially unwise. However, if LendingClub offers you a lower rate, loan consolidation could make sense.
No Prepayment Penalties
If you have extra funds, LendingClub allows you to prepay your loan without any penalties. Making early payments will lower your outstanding balance ahead of schedule and result in interest savings. Unlike some competitors, LendingClub doesn’t charge a fee for paying off your loan early, giving you the flexibility to manage your loan repayment according to your financial circumstances.
Joint Loans Supported
LendingClub stands out by offering the option to bring on a joint borrower or cosigner. If you have bad credit or no credit, bringing on a joint borrower can potentially help you qualify for a loan or obtain better terms. It’s important to note that joint borrowers or cosigners share equal responsibility for repaying the loan. Late payments will affect both your credit histories, and if you default, the cosigner will be legally obligated to repay the loan.
How LendingClub Stacks Up
In comparing LendingClub with its competitors, it’s essential to consider various factors such as interest rates, loan amounts, and repayment terms. Here’s a quick look at how LendingClub stacks up:
[Table comparing LendingClub with competitors]
Please note that loan interest rates are current as of November 2023.
TIME Stamp: Lending Club is a Great Option for Personal Loans
While not everyone may qualify for the best terms, LendingClub allows you to determine your eligibility and receive personalized loan terms without any risk or cost. The option to bring on a cosigner can potentially improve your chances of obtaining favorable terms. If LendingClub’s offer doesn’t meet your needs or is too expensive, it won’t harm your credit score. You can continue to explore other options and find the best personal loan for your financial situation.
Frequently Asked Questions (FAQs)
Can I refinance a loan through LendingClub?
- Yes, you can use the proceeds of a personal loan from LendingClub for refinancing various loan types.
LendingClub vs. Upstart
- Upstart and LendingClub offer similar terms for personal loans. Both lenders allow you to check your rate without affecting your credit score, giving you more information to make an informed decision.
LendingClub vs. Upgrade
- Upgrade personal loans and LendingClub personal loans have similar loan minimum amounts. Upgrade provides additional options for rate and repayment term selection, with a higher maximum loan amount. Like LendingClub, Upgrade enables you to check your interest rate and loan terms without impacting your credit score.
How is your credit score affected when applying for a LendingClub loan?
- LendingClub’s initial application uses a soft credit inquiry, which doesn’t harm your credit score and isn’t visible to other lenders. If you proceed with a loan, LendingClub will conduct a hard credit inquiry, which may have a slight negative impact on your credit score for up to two years.
Remember, when it comes to personal loans, it’s crucial to compare offers, consider your financial needs, and choose the option that best suits you. To learn more about personal finance tips and advice, visit Personal Finances Blog, your go-to source for all things related to managing your money wisely.