LendingClub is a peer-to-peer lender. This means investors on the platform raise your loan amount instead of the conventional direct lending used by other lenders. However, the drawback on this mode of lending is you have no guarantee that you’ll get the full loan amount. This is despite meeting all qualifications set out by the lender.
From 2007, LendingClub continues to offer a marketplace where individual investors can meet borrowers. In addition, it’s one of the largest P2P lenders in America. It has facilitated more than $13 billion worth in loans.
Another drawback is the high credit scores displayed by the borrowers on the platform. Nevertheless, you can still find terms that can work for you. Furthermore, there’s flexibility when it comes to what you can use the loan for.
LendingClub Personal Loans
LendingClub offers personal loans from as low as $1,000 all the way to $40,000. When it comes to repayment periods, you have a range of selections starting from three years to five years. Even better is the fact that LendingClub offers fixed interest rates. This means you can put your worries to rest regarding any fluctuations in your payments.
The interest rates, on the other hand, will depend on your financial information and credit history. You can get rates starting from 5.32% to 30.99%. It’s quite a huge difference, but the rates you’ll get will also depend on the type of loan you want and your financial history.
Moreover, you’ll also have to pay for the origination fees which are between 1% and 6%. In addition, if you calculate the rates as APR, the above figures will go up slightly to about 5.99% and 34.34%.
The newest online lending institutions use employment type and education as metrics to gauge the borrower. However, LendingClub uses a different approach. To gauge the borrower, they use the income and the credit.
The credit score should not be less than 600, but on average, borrowers’ credit scores stand at around 699. If you are a young borrower, then LendingClub is not for you. This company prefers borrowers with a long credit history. The income levels are also quite high with the average borrower taking home about $76,135 in salary.
With the above details, it’s not a surprise that the borrower’s credit utilization is low which is about 18% minus the mortgages. The qualifications may be intimidating, but you don’t have to shy away from this lender.
How to Apply at LendingClub
Peer-to-peer lenders use a different application process compared to other lenders. To start off, you need to check some of the rates offered after you submit the basic details. Afterward, LendingClub will perform a soft pull on your credit report. Don’t worry, your credit score won’t suffer any damage.
Based on their findings, you will get a loan grade, the interest rates, origination fees and the APR. In addition, you’ll also receive other loan offers with different terms and interest rates. Accompanying the loan offers are the various monthly payments. Nevertheless, you need to keep in mind that picking a certain lender doesn’t mean you’re approved.
LendingClub is a peer-to-peer lender. This means once your loan is approved, all your information regarding the loan will be listed on the website for other investors to view.
Once the loan strikes 60% on the funding mark, the lender will start the verification process. This includes financial and personal information such as proof of identity and other documents like bank statements, a scan of your driver’s license and pay stubs.
Just as other lenders, LendingClub will also perform a hard check on your credit report. This type of check will affect your credit score slightly. However, since this is reported as an inquiry, you don’t want too many of these checks in a short period of time.
As the checks continue, the remaining loan amount will be funded. You can still receive the 60% initially funded and reapply for the balance. The disbursement takes about four business days after verification.
What Next After Approval?
Since LendingClub charges origination fees, you need to factor that before applying for a loan. The fees are included in your principal loan so you pay for it. For example, if you intend on borrowing $20,000 with origination fees of about 4%, you’ll only get $16,000.
There’re also other fees imposed by LendingClub such as $15 for unsuccessful transactions such as a bouncing check. There’s also a late payment fee which is subject to the balance due after defaulting past the 15-day grace period. The fee stands at 5% $15 whichever is higher of the balance. You’ll also have to pay a processing fee of $7 if you pay using a check.
LendingClub Auto Refinancing
For those with car loans, you can refinance your loan with LendingClub. The process of refinancing is simple and fast. LendingClub will provide you with a list of monthly payments, APRs and loan terms, then you can compare them to your current car loan to see which suits you best.
For you to qualify, you need to fulfill a set of requirements. Read on to find out more.
- For the Borrower
You need to have a credit score of at least 510 and reside in one of the following areas:
AL, AR, AZ, CA, DE, FL, GA, ID, IL, IN, KS, LA, MD, MI, MN, MO, MT, NE, NJ, NM, NY, NC, OH, PA, RI, SC, SD, TN, TX, UT, WA, or WI.The best part is LendingClub doesn’t check your monthly income. With this, you can take advantage of LendingClub to save more money every month.
- For the Car
LendingClub will only refinance cars 10 years old or less. If your car is older than 10 years, you’ll have to seek other options.
- You should have gone 120,000 miles or less.
- Your car should be a personal one and not a business car.
- If you have a commercial vehicle, a salvaged car, a motorcycle or an RV, you’ll have to forget about LendingClub.
- If you have a Dodge Neon or a diesel-powered Volkswagen, you won’t get refinancing from LendingClub.
- If you have the following models, an Oldsmobile, Suzuki, Saturn, Isuzu, Daewoo, Pontiac or a Hummer, then LendingClub won’t offer refinancing.
- For the Loan
- Your loan balance should range from $5,000 and $55,000.
- Your loan should only be a month old or less.
- Your loan should have no less than two years remaining in payments.
Rates and Fees
Your credit score will have a great say in the rates you get. At the moment, LendingClub offers 3.49% as their lowest APRs. To qualify for these rates, you’ll need to have a stellar credit. On the other hand, you’ll have to take 24.99% if your credit is poor.
For you get the best rates, your credit score should be no less than 720. Better rates need a credit score of about 690 to 719. Anything lower than 690 will still be good, but make sure you don’t go lower than 510.
For the fess, you can rest easy because LendingClub doesn’t charge application, prepayment or early payment fees and penalties.
How to Apply for an Auto Refinance Loan
The application process is split into three categories:
You can do this online from your smartphone. You can view the rates LendingClub offers you and make a comparison of the monthly payments to what you pay at the moment. Also, you can check to see whether the APRs are lower than your car loan.
- Submit Proof of Identification
After you settle on the option you feel is best for you, a representative will contact you and ask for verification of the information provided earlier. This includes submitting supporting documents of the car and yourself.
After successful verification of your documents and approval of your application, LendingClub will clear your balance with the lender. Then, you will pay LendingClub the remaining balance. You may get full ownership of the car depending on the refinance option you selected sooner than if you had stuck with your previous lender.
- LendingClub: The Genesis
Did you know LendingClub started as a Facebook app? This was over 10 years ago and it has continued to grow in leaps and bounds as an online lender. As a matter of fact, LendingClub opened the doors for other numerous online lenders after it registered with the SEC in 2008.Currently, LendingClub offers car loans, personal loans and mortgages and don’t forget that it’s a public company.
- Is Taking Out a Loan from LendingClub the Right Move?As always, before seeking a loan from any lender, it is crucial for you to analyze your finances. Do a thorough check to find out whether the loan will do you good or harm. The deal breaker should be the affordability of the loan.
Apart from that, here are some other things to consider.
- Analyze Your Credit History
This is important, especially with LendingClub where the average borrower has a credit score of 700. They also have a credit history spanning about 16 years. Even though the minimum credit score needed is about 600, statistics show you need to have a good financial history to get approved.
You can still get approved even with average or bad credit scores or a short credit history. However, you’ll have to contend with high interest rates offered by LendingClub.
- How Soon Do You Need the Loan?
LendingClub is not as fast when it comes to their loan process. From application to funds disbursement, you can wait up to an entire week. This is fairly slow compared to other lenders in the same space. In addition, once you are approved, it’s not 100% guarantee that you’ll receive the funds.
So you have to analyze your needs. Is it an emergency or can you wait for an entire week? If it’s a medical bill, then forget about LendingClub. But if it’s a loan to renovate your backyard, you can wait.
- Compare Rates with Other Lenders
Since other online lenders perform a soft pull on your credit report, you can shop around for other better deals because your credit score won’t suffer from the checks. While hunting for a better loan offer, always compare the APRs and interest rates.
Also check if there are other fees like origination, processing and late payment fees. By searching for better deals, you’ll save yourself a lot of money which could have gone into repaying the loan.
- Think About the Future
Repayment periods have an impact on interest rates. For example, short payment periods mean you’ll pay high monthly payments, but you’ll clear the loan faster. It is advisable for you to avoid long-term repayment periods.
Also, keep in mind your debt-to-income ratio today and in the future. Think about your expenses in the future like education, emergencies and household expenses. How do you think they’ll affect your budget and finances in general?
Personal loans are a lifesaver when it comes to emergencies. Their fast approval process and the fact that you don’t need to put any collateral against the loan makes it ideal for many borrowers. While it may be convenient to take out a personal loan, it’s crucial for you to conduct a thorough research on the best deals. The bottom line remains, you don’t have to go with the first offer that comes your way.
- Analyze Your Credit History