Becoming a part of a Lending Club might be challenging. Although some investors consider this opportunity as a significant change, many people wonder: What is Lending Club? Well, if you are among those people, then you have come to the right place. Below you will find information about what this company actually is. Moreover, this article will help you decide whether this thing is for you or if it is not. So, let’s get started.
What is a Lending Club
Minimum Credit Score: 600
Est. APR: 5.99-35.89%
Loan Term: 3 to 5 years
Loan Amount: up to $40,000
Typically, Lending Club attracts both borrowers and investors. However, they need to have a good and lengthy credit history as well as high incomes. As the Lending Club plays the role of a lender, the company accepts co-signed loan applications. In other words, if you want to borrow or invest money, this online platform may have the right solution for you.
Moreover, with Lending Club, users can either borrow money or invest their own funds. Further, you can apply for a personal, business, or auto refinancing loan. On the other hand, you can open an investment account and build a portfolio. In other words, the company connects borrowers with investors who are willing to fund the borrowers’ loans.
Currently, Lending Club is the largest online lender. It offers personal loans up to $40,000. Also, according to its website, the company has over 3 million customers who have borrowed more than $50 Billion. Can you imagine that the company was opened in 2007 and has accomplished so many things in less than 15 years? Let’s put the hype around this company and the large number of customers aside. The real question is:
Lending Club Fees
Origination fee: up to 6%
Late fee: Greater of $15 or 5% of payment after the 15-day grace period
Check processing fee: $7
Prepayment fee: None
Is Lending Club a Good Idea?
Typically, the peer-to-peer lending company is a smart decision – especially if you want to consolidate your debt. During the past few years, this platform has become one of the most reputable websites for online personal loans. So, if you want to borrow money for a particular need or credit card debt consolidation, this online peer-to-peer lending company might help you. However, you need to have an established financial history as well as responsible payment records.
Are there any Risks?
Typically, Lending Club assigns a grade to each approved borrower. However, investors who want to take advantage of the Lending Club opportunity must beware. Why? Well, investors make the final decision whether they should lend money or not.
Moreover, as every approved borrower is assigned a grade, investors can use this information. Further, the Lending Club grade utilizes credit and income data, which may help determine the range of interest rates offered to the borrower. Currently, the annual percentage rate is between 5.99% and 35.89%.
Also, if you have any doubts about the legitimacy of this company, you should probably know that Lending Club has been recognized by “The Economist,” “The New York Times,” as well as other companies. But let’s take a look at some of the advantages of Lending Club. Also, we will include the disadvantages as we believe each platform has flaws.
Advantages of Lending Club
- You can borrow up to $40,000
- Lending Club could directly pay off some creditors
- There is a co-sign option with this platform (Joint Loan Applications)
- The company offers a hardship plan
- Lending Club assigns a grade to each approved borrower
- It provides balance transfer loans which help borrowers pay off credit cards and consolidate debt
- You have the opportunity to stretch the loan to repayment terms ( three or five years)
- Lending Club requires no hard credit inquiry
- The minimum credit score is 600
Disadvantages of Lending Club
- The company charges origination and late fees
- Currently, there is no rate discount for autopayments
How to Qualify
- Have a minimum credit score of 600
- A debt-to-income ratio of less than 40% for single applications, 35% for joint applicants.
- Have a minimum credit history of 3 years.
Moreover, if you want to apply for a loan, you should visit the company’s website. Then you must fill in the required information, such as what is the loan amount, what is the reason for borrowing it, and of course, your personal information. Also, the application process will ask for the personal information of co-applicants as well as verifiable individual/joint income.
This peer-to-peer lending company has helped numerous people pay off their debts. Also, Lending Club has helped many investors too. So, if you are still wondering whether this company deserves a try, ask yourself the following question. Do I have a good and long credit history as well as high incomes? If the answer is yes, then you should do in-depth research on this platform, as this might be the right option for you.
However, if you have a bad credit history, then you should probably try to find another company. With Lending Club, if you are a borrower with bad credit, the interest rate would be higher. Which, on the other hand, will lead to a higher steep origination fee. In other words, this company is not the best option for you. So, you should probably look for a different type of loa