LendingClub Review

Yes, LendingClub is safe. The company is a legitimate online lender that is registered to provide loans in 49 states, and it is FDIC-insured for deposit accounts, has an “A-“ rating from the Better Business Bureau and has been BBB-accredited since 2008. LendingClub also has an average rating of 4.4/5 among users on WalletHub and has an overall personal loan rating of 3.5/5 from WalletHub's editors.

Reasons Why LendingClub Is Safe

• It has an “A-“ rating from the BBB.
• It's been BBB-accredited since 2008.
• It has an average rating of 4.4/5 among users on WalletHub.
• WalletHub's editors gave the company's personal loans an overall rating of 3.5/5.
• Loan terms are clearly displayed on the company's website.
• The company's website is secure.
• Deposits with LendingClub are FDIC-insured.

For more information, check out the full LendingClub personal loan review on WalletHub. Then, you can estimate your potential rates with our free pre-qualification tool.

The LendingClub scandal refers to when LendingClub was sued by the Federal Trade Commission in 2018 for falsely promising loans with no hidden fees, telling consumers they had been approved for a loan when that was not true, and making unauthorized withdrawals. LendingClub allegedly failed to provide required privacy notices, too.

LendingClub settled the charges for a total of $18 million in 2021, and the FTC issued payments totaling more than $17.6 million to eligible LendingClub customers. LendingClub customers who took out a loan before January 6, 2017 and repaid what they borrowed were eligible for refunds and should have received an email from the FTC explaining the refund process.

LendingClub has not had any major scandals since being sued by the FTC in 2018. For more information, check out reviews of LendingClub on WalletHub.

A loan from LendingClub will temporarily hurt your credit score because the company will perform a hard pull of your credit history before you receive your loan, which may drop your score by about 5 to 10 points. However, just checking your rate and applying for a loan from LendingClub Bank won't affect your credit score.

If you do get approved for the loan, it will add to your overall debt load, which may hurt your credit score. The negative effects don't have to last long, though. Over time, a loan from LendingClub will help your credit score if you pay the monthly bills by the due date, as doing so adds positive information to your credit reports. This should offset any initial decrease in your credit score after you take out the loan.

To predict how your credit score will be affected, check out the free credit score simulator on WalletHub.

A personal loan from LendingClub is not hard to get approved for if you have a credit score of 600 - 640, according to multiple third-party sources, enough income to afford the loan, and a valid bank account. Approval by LendingClub is never guaranteed, though, even if you meet all the requirements.

Requirements to Get Approved by LendingClub

• Credit Score: 600 - 640, according to multiple third-party sources
• Income: Not disclosed
• Age: 18 years old
• Citizenship: U.S. citizen, permanent resident or long-term visa holder living in the U.S.
• Identification: Social Security number
• Bank Account: Verifiable bank account
• Residency: All states except Iowa and U.S. territories

For more information, check out the full LendingClub personal loan review on WalletHub. Then, you can estimate your potential rates with our free pre-qualification tool.

The best LendingClub alternatives are the peer-to-peer lenders Prosper, Upstart, Payoff and Peerform, as well as LightStream, Marcus, American Express and Achieve Personal Loans when it comes to online lenders, banks and credit unions. While LendingClub is a decent lender, rated 4 stars out of 5 by WalletHub, its loans are a bit more expensive than loans from the best competitors.

For example, LendingClub personal loan APRs range from 7.04% - 35.89% and the origination fees range from 1% to 6% of the loan amount. On the other hand, LightStream – one of the best LendingClub alternatives – offers APRs that range from 5.99% - 22.49%, as well as a $0 origination fee.

Some of LendingClub's competitors offer larger loans and lower credit score requirements, too.  LendingClub offers loans of $1,000 to $40,000, and most of its loans require a credit score of 660+. In contrast, competitors like LightStream and Upstart can provide $50,000+ in funding, and some lenders like Peerform have credit score requirements as low as 600.

Best LendingClub Alternatives:

• LightStream: APRs of 5.99% - 22.49%. $0 origination fee. Loans of $5,000 to $100,000. Credit score of 660 needed.
• Marcus by Goldman Sachs: APRs of 6.99% - 24.99%. $0 origination fee. Loans of $3,500 to $40,000. Credit score of 660 needed.
• American Express: APRs of 6.98% - 19.98%. $0 origination fee. Loans of $3,500 to $25,000. Credit score of 660 needed.
• Achieve Personal Loans: APRs of 7.99% - 29.99%. 1.99% to 4.99% origination fee. Loans of $7,500 to $40,000. Credit score of 620 needed.
• Prosper: APRs of 6.99% - 35.99%. 2.41% to 5% origination fee. Loans of $2,000 to $40,000. Credit score of 640 needed.
• Upstart: APRs of 5.35% - 35.99%. 0% to 8% origination fee. Loans of $1,000 to $50,000. Credit score of 620 needed.
• Payoff: APRS of 7.99% - 29.99%. 0% to 5% origination fee. Loans of $5,000 to $40,000. Credit score of 640 needed.
• Peerform: APRS of 5.99% - 29.99%. 1% to 5% origination fee. Loans of $4,000 to $25,000. Credit score of 600 needed.
• Navy Federal Credit Union: APRs of 7.49% - 18%. $0 origination fee. Loans of $250 to $50,000. Credit score requirements not disclosed.

There's an easy way to find the best LendingClub alternatives for you. You can use WalletHub's free personal loan pre-qualification tool to show you which lenders will give you the highest approval odds, as well as estimate what rates you can look forward to if approved.

Yes, LendingClub does allow a second loan, but no more than that until one is paid off. LendingClub's website says that borrowers may only have up to two active LendingClub personal loans at once. Businesses that apply for LendingClub's business loans also can get a second loan (but not more than two). And an individual or guarantor for a loan cannot have more than three LendingClub products open in total. For example, a person could have their name on two LendingClub personal loans and one business loan, or two business loans and one personal loan.

It's important to note that LendingClub will not approve a second loan for everyone. Naturally, the next application will include another hard pull of the applicant's credit report and a look at their income and other financial factors. In addition, there are several other requirements that an applicant must meet in order to get a second loan from LendingClub.

Requirements for a Second LendingClub Personal Loan:

• No more than two other LendingClub products open: can have a maximum of 2 personal loans and 3 LendingClub products in general.
• No more than $50,000 in outstanding balances between the two personal loans.
• 3 - 12 months of consecutive on-time payments on the first loan.

When it comes to business loans, LendingClub doesn't mention a payment requirement. But you can't have more than $300,000 in outstanding balances between the two business loans. LendingClub also states that you may be denied based on an evaluation of your current credit and overall financial profile.

If a LendingClub loan is funded but “in review,” that means the loan process is almost complete. LendingClub works a little bit differently from other personal loan providers because they are a peer-to-peer lending site. That means potential borrowers put up requests for loan funding and investors decide whether or not to back those loans. While LendingClub is not the source of funding, it does facilitate the approval process. LendingClub reviews all borrowers' credit history, income and other factors to make sure they are qualified to receive a loan. The “in review” status indicates that LendingClub has not yet made a final decision.

Part of the reason your LendingClub loan might be funded while still in review is that loan requests go onto the site right after the potential borrower is pre-qualified. LendingClub uses a soft credit inquiry during pre-qualification to see if an applicant appears to meet their basic requirements. But this in itself is not approval. It just lets you proceed to listing your loan request on the site while LendingClub does a more thorough evaluation, including a hard credit pull. The review will often conclude during the funding period. But it's also possible your loan could be funded before LendingClub makes their final decision. That also means that even if you're funded, you're not guaranteed to actually get the loan.

In most cases, you shouldn't have to wait too long for LendingClub's review to finish. A typical loan takes 7 business days or fewer from the application date to receipt of the funds. But in some cases, you might have to wait more than a week and a half for your final decision.

If you default on a LendingClub loan, you will owe late fees for each missed payment and will experience credit score damage from those late payments being reported to the credit bureaus. In addition, you will have to deal with calls from debt collectors, and it's possible you could be sued. Naturally, it's best to try to avoid defaulting on a LendingClub loan, through methods like working out a new payment plan, settling the debt or refinancing with a cheaper lender.

What Happens If You Default on a LendingClub Loan:

• You owe late fees: For each payment you miss, LendingClub will charge 5% of the payment amount or $15, whichever is greater.
• Your credit score decreases: Payment history is one of the biggest factors in your credit score. A late payment will remain visible on your credit report for 7 years and can hurt your score that entire time, though the damage will diminish over time. LendingClub reports late payments to the credit bureaus once they are 30 days past-due. And if you don't pay at all, your debt may get sold to collections or charged off. Those negatives stay on your credit report for 7 years, too.
• You will likely be contacted by debt collectors: LendingClub says they make “significant” efforts to contact delinquent borrowers and collect outstanding payments. They do so both through internal departments and by working with debt collection agencies. Make sure you know your rights concerning how debt collectors can and cannot behave toward you.
• You may be sued: Anecdotal evidence suggests that it is rare, but not unheard of, for LendingClub to sue a borrower who defaults. Since LendingClub loans are unsecured, a court judgement provides an alternative way to get the funds back. If you were to be sued and lose, the judge could garnish your bank account or wages to pay back what you owe.

If you've defaulted on a LendingClub loan, you may want to try to settle, since lenders are more likely to settle when they are afraid of you not paying altogether. Negotiating a settlement could let you pay as little as 30% of what you owe, but you'll need to have enough cash to pay the settlement amount in a lump sum. Keep in mind that while there are reports of customers settling with LendingClub, the company has no obligation to agree.

You could also refinance your debt with another lender. But if your credit score has been damaged by missed payments, you're not likely to get better terms on a new loan. Another option is to call LendingClub and try to work out a new payment plan that's more manageable for you.

Yes, you can refinance a LendingClub personal loan using either a new personal loan or a balance transfer credit card from a different lender. By paying off your remaining LendingClub balance with a new, lower-interest loan or credit card, you will shift what you owe to the new lender and save money on finance charges. 

How to Refinance a Loan from LendingClub With a New Loan

1. Check your credit score. Checking your credit helps you see if you're able to get approved with the score you have or if you need to spend some time improving it. You can check your credit score for free on WalletHub.
2. Get pre-qualified (if possible). Pre-qualifying shows you which lenders may approve you and what rates may be available to you. You can pre-qualify with multiple lenders for free on WalletHub.
3. Apply for the new loan. You can apply for the loan online, in person or over the phone. You'll need to give the lender some personal information when you apply, like your name, address and date of birth. The lender will also need some financial information, like your employment status and income.
4. Wait for funds. You should get your loan within a few business days of being approved. The lender will either write you a paper check or do a bank transfer.
5. Pay off the old loan. Once you receive the money, you'll need to pay off the old loan.  
6. Repay the new loan. After the old loan is paid off, you'll then need to repay the new loan. This could take a few months or years to do.

Refinancing a Loan from LendingClub With a Balance Transfer

The biggest difference between using a balance transfer credit card and a personal loan for refinancing is that many cards offer 0% introductory APRs. If you can pay off your loan before the introductory period ends, you won't have to pay interest.

To learn more, check out WalletHub's balance transfer guide.

Final Thoughts

You should refinance a personal loan from LendingClub if it saves you money. Ideally, your new loan or credit card should have a lower APR than your old loan. You can qualify for a lower APR if your credit score and overall financial situation are better than when you got the first loan.

Finally, it's worth noting that LendingClub does not offer personal loan refinancing services for its own loans. In other words, you can't use a LendingClub loan to pay off another LendingClub loan and get a lower interest rate in the process.

LendingClub requires a minimum credit score of 600 for LendingClub's “standard” loans, according to the company's annual report. The report also states that borrowers with lower credit scores may be approved for “custom” loans, which generally have the same sizes and lengths. Applicants can be approved for a custom loan if LendingClub is able to verify their income and that income is high enough to offset their credit score (no specific dollar amount given). According to numerous third-party sources, it may be possible to qualify for one of these loans with a credit score as low as 600 - 640.

Applicants for a LendingClub personal loan will be judged based on more than just their credit score and income, however. LendingClub also considers an individual's existing debt load, recent credit inquiries and more.

The best way to find out your chances of approval is to check for pre-qualification. Not only will this give you an idea of whether you're likely to be approved, but it will also give you an estimate of your potential rates and fees. Pre-qualification will not affect your credit score, but actually submitting an application afterward will. You can use WalletHub's free pre-qualification tool to check your status with LendingClub and a number of other lenders.

Keep in mind that in order to get LendingClub's cheapest rates, you'll likely need an excellent credit score. People who just barely qualify are likely to get rates closer to LendingClub's maximum.

It's also good to note that LendingClub offers auto refinancing loans, too. According to third-party sources, LendingClub might accept credit scores as low as 510 for these loans.