Make money by helping people finance their dreams!

Chances are, you’ve heard of LendingClub before. The company is a well-known provider of personal and small business loans. In fact, it’s considered one of the largest distributors of personal loans. Millions of Americans have benefitted from the company’s peer-to-peer and microloan programs. LendingClub has also made many investors rich by giving them a chance to loan out money and profit off the interest. The company gives lenders a feel-good way to use their money while helping borrowers start small businesses, revamp their homes, and pay off old debt. Many people have had positive experiences with LendingClub. Whether you need money to realize a goal or want to use your wealth to help others, LendingClub could be the place for you.

LendingClub company information

Official Website:https://www.lendingclub.com/
Headquarters Location:595 Market Street, Suite 200, San Francisco, CA 94105
Founded:2006
Industry:Banking
Contact:1-888-596-3157 or LendingClub Corporation P.O. Box 884268 Los Angeles, CA 90088-4268
Trust Score:High
Social Media:Twitter, Facebook

What is LendingClub?

LendingClub started as a place where individuals could make small business or personal loans to other people. It was billed as a peer-to-peer resource, where those in need could apply for microloans – less than $4,000 – from site members. Over the last decade, LendingClub has made many changes. They currently don’t allow individuals to make loans. Instead, LendingClub has become a marketplace bank offering direct loans through its investors. LendingClub screens potential applicants before referring them to corporate investors. These investors have the final say on the amount and terms of the loan. LendingClub remains a very popular site for personal loans. According to debt.org, it is one of the biggest online sources for reputable personal loans.

  • Is the site generally legal? In all countries? LendingClub is a legal financial institution. It is registered with the U.S. Securities and Exchange Commission. It is also insured by the Federal Deposit Insurance Corporation (FDIC). However, only American citizens or legal permanent residents can do business with LendingClub. Furthermore, LendingClub will not accept American citizens or residents from U.S. territories like Guam, Puerto Rico, or the U.S. Virgin Islands. Also, it is illegal for Ohio residents to invest in peer-to-peer lending schemes. Iowa residents cannot borrow due to their state laws. In several other states, like Texas, citizens may need to file paperwork with the state legislature to use LendingClub due to regional fraud laws. LendingClub does allow members to access their online accounts when traveling abroad. However, they cannot apply for new loans or perform most actions when using a foreign IP. LendingClub does not accept any applicant from outside the USA.
  • How high is the chance of being scammed? The business is regulated by the United States government. However, some borrowers and critics consider the high APR offered on certain loans to be a scam. Although most borrowers receive market-fair APR offers, some might be charged nearly 36%. It is also virtually impossible for lenders to cancel applications. No options exist allowing users to cancel their accounts.
  • Does the site contain viruses or malware? The LendingClub.com site is secure (HTTPS) and does not contain viruses or malware. Clients don’t need to download anything from the site. As always, use antivirus software when accessing information online.
  • Does the site steal sensitive data? Borrowers do need to fill out an application requiring sensitive data. This includes birthdays, social security numbers, and home addresses. LendingClub’s privacy policy describes how they use private data. They do claim the right to use data to market their products and do share data with affiliates. Customers have some control over this but not very much.
  • Are there similar fake sites to be aware of? There are many online lending companies with bad reputations. Phishing scams are common on banking and lending sites.

Is LendingClub reliable and trustworthy?

  • How good are the company’s overall web ratings? Overall, LendingClub has positive ratings. On Forbes.com, LendingClub has 3.5 out of 5 stars. On Trustpilot, the company enjoys a 4.8/5. Many borrowers and lenders say they had a good experience working with LendingClub.
  • Does the site have a refund policy? Borrowers can decline loan offers made to them by LendingClub investors. However, this can be difficult. Canceling loan applications requires notice within 5 days of applying for the loan.
  • How many scam reports are there compared to positive reports? On ConsumerAffairs, about 20% of reviews complained of scams, deception, or problems with LendingClub.
  • How reliable is customer support? Customer support is adequate. Customers can be connected to a live agent based in the United States during some phone calls, but others are handled by bots. Agents claim they cannot cancel applications, close accounts, or make other changes. Some borrowers report being hung up on or treated rudely.

The pros and cons of LendingClub

  • Pro – LendingClub offers significantly lower APR than most traditional banks and online competitors. The average APR is 12%, compared to some banks that charge above 40%
  • Pro – LendingClub conducts all business online, so it’s easy to apply and access your account from any location.
  • Pro – The company specializes in microloans as small as $1,000. Loans of this size are ideal for a small home or car repairs, and allow borrowers to receive only so much as they need. Small loans like this are easy to pay back and unlikely to run up too much interest or negatively impact credit.
  • Pro – It takes just a minute to apply for a loan online.
  • Con – Not everyone qualifies for a loan. LendingClub requires good credit and a healthy income to qualify.
  • Con – LendingClub itself doesn’t issue the loans. This means you could be accepted by LendingClub but unable to secure a loan from any investor.
  • Con – APR can vary depending on your credit and the investor. While some people enjoy 5% APR, others can be charged 30% or more.
  • Con – There are fees associated with LendingClub. These include an orientation fee (3-6%), late payment fees, and fees for certain types of payment.
  • Con – Since LendingClub doesn’t have a brick-and-mortar location, borrowers can’t go in and talk to someone face to face. There can be problems with poor communication, misunderstandings, or mistakes.
  • Con – There is no way for applicants to cancel accounts. LendingClub says accounts go dormant after loans are paid off, but this cannot be verified.

How does LendingClub make money?

LendingClub earns its money by charging fees. When they apply for a loan, borrowers are charged an orientation fee. This is between 3-6% of the total loan amount and is on top of the lender’s set APR and interest rate. LendingClub also charges the lenders small fees, usually 1-2% of the loan amount. If borrowers default on the loan, lenders must pay LendingClub 30% of the total loan amount (or 40% if the case is brought to court). LendingClub makes some money through advertising and marketing. They also sell and distribute user data to affiliates, data brokers, and data collection services.

Best LendingClub Alternatives

LendingClub works well for some borrowers. However, other people may find they don’t qualify for any of the loans or don’t enjoy doing business with the company. There are some great alternatives if LendingClub doesn’t work out.

LendingClub FAQ

Q. I don’t have the best credit. Can I still use LendingClub?

A. LendingClub provides services to users with good credit only. A minimum score of 600 is required to make use of LendingClub loans. Borrowers also cannot be maxed out on other credit options. The company does make it easy to add a second borrower or cosigner to the loan if your credit is less than perfect.

Q. How much can I borrow from LendingClub?

A. Loans from LendingClub start as low as $1,000 and go as high as $40,000. LendingClub usually requires applicants don’t attempt to borrow more than 40% of their annual salary to be able to pay the loan off on time. When applying, ask for the lowest amount necessary to cover your expenses.

Q. Does LendingClub provide grants? Do they offer special services or provisions for those in need?

A. No, LendingClub only offers loans that borrowers must pay back in full. The goal of the company is to give out small loans to individuals and businesses, rather than to financially support them. The company is for-profit and doesn’t offer any charitable services.

Q. Can I loan out money through LendingClub?

A. The company no longer allows peer-to-peer loans from individual investors. Only investment companies and corporations can offer loans. If you have a small business, an LLC, or another corporate license, you may be eligible to offer loans through LendingClub.

Q. How long do I have to pay off my loan?

A. When you apply, LendingClub will present you with loan offers from various investors. You can choose terms of 36 or 60 months. LendingClub doesn’t charge any fees for paying the loan off early. If you can pay your loan off faster, do so as you will end up paying less interest.

Q. I need to buy a new home. Can I borrow it from LendingClub?

A. No. LendingClub only offers loans as large as $40,000. Most borrowers won’t be able to use LendingClub to finance a large purchase like a new home. However, the loan amounts are often large enough to pay for remodeling, home repair, or to put a deposit on a new property.

Q. I’m having problems making my loan payment. What can I do?

A. LendingClub is not known for tolerating late payments. If you are worried about being late with a payment, contact the company or your lender directly. It may be possible to get an extension or to defer payments for several months. However, some borrowers have experienced high fees for late or skipped payments, over $300/month. If you are worried about defaulting on your loan, contact a financial advisor or debt consolidation team. They may be able to help you negotiate with the company to extend due dates or reduce payments.

Q. Does LendingClub offer savings accounts?

A. Yes, LendingClub does provide online savings and checking accounts for both individuals and businesses. Personal accounts can earn between 0.05-0.60%. Corporate and institution accounts can be used to save or to finance loans.

Q. Can I invest in LendingClub stock?

A. Yes, LendingClub trades on the New York Stock Exchange as (LC). At the time of this writing, LendingClub shares are valued at $18.