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LendingClub
8.4
ratings

Overview

LendingClub is a peer-to-peer lending company with its headquarters in California. It was the first company of its genre to have registered with the Securities and Exchange Commission, offering loan trading in the secondary lending market. However, LendingClub is not necessarily a bank; it actually connects borrowers to investors through online transactions.

Since 2007, it has been helping millions of people achieve greater financial assistance. With the help of online marketplaces, LendingClub has been providing the investors a satisfactory access to consumer credit that has been a great help in the diversification of their business portfolios and is a great opportunity to gain competitive returns.

The operation is fully through the online marketplace, without any physical branches. This is an added advantage to lower the operating costs. Thus, the banking system is being transformed into a transparent, frictionless, and highly worthy digital experience for many.

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Pros

  • No prepayment penalties
  • 24*7 customer service
  • Convenient to use from home

Cons

  • Deposit required to start investing
  • High income requirements
  • Lengthy application process

Customer feedback and overall reputation

LendingClub has a customer feedback number – 888-596-3157. You can get in touch with the customer support team at this number whenever you face any difficulties while filling up the application form. The support team is available 24*7. The borrowers can also address other complaints at their email address, which is support@lendingclub.com. Based on the customer feedback, the company tries to track every review and tries to improve its services as per the requirements of the borrowers.

Collateral required

LendingClub enables its borrowers to create unsecured loans amounting from $1,000 to $40,000 for a period of 3 years. Each loan is assigned a grade ranging from “A,” which is the highest on the scale to “G,” which is at the lowest on the same scale. The higher the grade, the lower will be the rate of the loans. Within each letter grade, there are also numerical ranks ranging from 1 to 5. The numeric sub-grades notify other factors like the size of the loan and term of the loan.

Eligibility and documents required

LendingClub is not for every investor. It has its own set of requirements to fulfill, like the ones mentioned here:

  • The gross annual income of the loan applicant should be more than $70,000 in most of the states. However, in California, the investors should have a gross annual income of more than $85,000.
  • Alaska, North Carolina, New Mexico, Pennsylvania, and Ohio are the states that are not approved to fall under the arena of LendingClub.
  • An initial deposit of $1000 is required to start investing.

The documents required are the applicant’s recent bank statements, or one can also provide the read-only version of their bank statement.

Interest rate and loan terms (fees)

The loans by LendingClub are generally for a period of 36 to 60 months on a fixed rate of interest. More than 80% of the loans are taken for the purpose of refinancing credit card balances and the existing loans. Similar to other loans of its genre, the borrowers are evaluated on the basis of certain benchmarks like their credit history and debt to income ratio or the DTI.

There are no prepayment penalties as such. The current APR ranges from 9.77% to 35.7%, depending on the loan amount, loan term, and the applicant’s credit history. An origination fee of 1.99% to 6.99% is included in the APR, which is afterward deducted from the loan amount.

Application process

The application is a step-by-step and gradual process that starts with checking the rates of the loan. Then, you will be directed to a page that has certain fields of information that you need to fill up. Once you meet the criteria for the loan, you will be shown a list of loan offers. These loan offers are the capital that the investors have posted. Here, you can select the offers that best suit your needs. After you submit this application form, this list will be reviewed by the investors. After this, the verification process will start and the documents of the loan will be prepared. This process may prove to be lengthy for the ones who need a loan to be approved fast. The income documents include bank statements, income tax returns, pension awards, and so on. For document verification, your employer may be contacted by the LendingClub officials.

LendingClub