2021 LendingClub Review

Your LendingClub final review may be taking a long time because LendingClub is having trouble deciding whether or not you are qualified for a loan. One reason this might happen is that LendingClub is unable to quickly verify the information on your application. Another reason could be that you are right on the borderline based on creditworthiness. A closer, manual look could be needed to determine if your income is high enough to outweigh your credit score or vice versa.

LendingClub says the entire application, approval and funding process takes 7 business days or fewer, on average. So if it hasn't yet been 7 business days, there's no reason to worry. Anecdotal evidence from credit forums shows that some people have had to wait more than a week and a half for the final review to conclude. But if you're concerned about your LendingClub final review taking a long time, you can always call customer service for help. The number is 1 (888) 596-3157.

It's also helpful to be fully aware of how LendingClub's application process works. When a potential borrower applies, LendingClub goes through a pre-qualification process. This tests whether the applicant meets some basic requirements. If the applicant makes it through this process, they are able to post their loan request on LendingClub's marketplace for funding by investors. During this process, LendingClub will do an in-depth review of the borrower's profile. That includes a hard pull of their credit. Usually this final review takes place during the funding process. But depending on how quickly LendingClub is able to verify the applicant's information, it may take longer.

LendingClub says it can take up to “a few days” to deposit money after they approve an application, depending on the bank the borrower uses. The funds are sent as a direct deposit to the borrower's bank account, and some banks may not process the transaction as quickly as others. But the whole process, from application to receiving the funds, generally takes 7 business days or fewer (sometimes as few as 4 calendar days).

Keep in mind that there's a difference between a LendingClub loan being “funded” and the money being deposited. LendingClub is a peer-to-peer lending site, so each loan request needs investors to commit to paying out the loan. In some cases, investors may commit to funding the loan before LendingClub gives final approval for the loan to proceed. In that case, you'll have to wait for the loan to be approved, and then may need to wait an additional few days for the money to move to your bank.

You should also keep in mind that the interest on your LendingClub loan starts accruing as soon as you receive final approval. That means you may start owing interest a few days before the money gets deposited in your bank account. Your first payment is also due one month from the approval date.

The best LendingClub alternatives are the peer-to-peer lenders Prosper, Upstart, Payoff and Peerform, as well as LightStream, Marcus, American Express and FreedomPlus 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 8.05% - 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 2.49% - 19.99%, 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 2.49% - 19.99%. $0 origination fee. Loans of $5,000 to $100,000. Credit score of 660 needed.
• Marcus by Goldman Sachs: APRs of 6.99% - 19.99%. $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.
• FreedomPlus: 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 6.95% - 35.99%. 2.41% to 5% origination fee. Loans of $2,000 to $40,000. Credit score of 640 needed.
• Upstart: APRs of 8.27% - 35.99%. 0% to 8% origination fee. Loans of $1,000 to $50,000. Credit score of 620 needed.
• Payoff: APRS of 5.99% - 24.99%. 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.

LendingClub's credit score requirement is 660 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.

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.

It's possible to refinance a LendingClub loan through either LendingClub or another lender. LendingClub representatives confirmed that people who take out a second LendingClub loan can use it to refinance the first. Otherwise, there are plenty of options from different lenders, including personal loans, home equity loans, HELOCs and credit cards.

Refinancing a loan means moving the balance to a new loan or line of credit with different terms. Ideally, the new loan or line of credit should have a lower APR and lower fees than the original. In order for that to happen, the borrower's credit score and/or income will likely need to be higher than they were when the borrower took out the first loan.

How to Refinance a LendingClub Loan with LendingClub:

You can refinance a LendingClub loan with LendingClub, but only under certain conditions:

1. You can have no more than two LendingClub loans open at once.
2. The outstanding balance on your LendingClub loan(s) cannot exceed $50,000.
3. You must make 3 to 12 months of on-time payments in a row on the original loan before applying for the second.

Exactly how many on-time payments you will need to make before opening a second LendingClub loan for refinancing depends on several factors, including the length of the loan and the remaining balance.

Keep in mind that LendingClub's personal loans have APRs ranging from 5.99% to 25.89%, and they have origination fees of 1% to 6% of the loan amount.

Refinancing a LendingClub Loan with a Different Lender:

Personal loan. If your credit score is above 660, you can probably qualify for a loan with no origination fee. That means your principal balance will not increase, whereas it would rise 1% to 6% if you refinanced with LendingClub. Some good options for personal loan refinancing include LightStream, SoFi and Discover.

You can try WalletHub's free pre-qualification tool to see your odds of getting another loan with multiple lenders (including LendingClub), along with what rates you might receive if approved.

Home equity loan. If you borrow against the value of your home, you may be able to get APRs of around 4% to 8%, which is typically a lot cheaper than you'd get on a personal loan. Home equity loans can also give you 10 to 30 years to pay the money off. But they use your house as collateral, so you'll face foreclose if you can't repay the loan.

Home equity line of credit. A HELOC is secured by your home and allows you to borrow up to a set credit limit any time within a designated draw period.

Credit card. Credit cards with introductory 0% APRs on balance transfers usually require a credit score of at least 700. The terms vary widely depending on the balance transfer card.

LendingClub does not offer mortgages. They offer four types of loans: general-purpose personal loans, auto refinancing loans, business loans, and medical patient financing. LendingClub doesn't limit what their personal loans can be used for, but mortgage lenders don't allow personal loans to be used for a down payment.

Plenty of major banks offer mortgages, including Chase, Citi, Bank of America and Wells Fargo. Some online lenders, such as SoFi and Quicken Loans, offer them as well. Or, you could get a mortgage from a local bank or credit union.

The best approach is to get pre-approved and compare multiple mortgage offers before settling on one. You can view the latest mortgage offers on WalletHub.

LendingClub's requirements for personal loan approval include being at least 18 years old, having a Social Security number and having a credit score of at least 660. Applicants also must be a U.S. citizen or permanent resident, or have a valid immigration visa. They will need a bank account, as well.

In addition, LendingClub requires a debt-to-income ratio of less than 40%, but that does not include mortgages or the loan being requested from LendingClub. Applicants also should have at least 2 revolving credit accounts open, 5 or fewer credit report inquiries from the past 6 months, and at least 36 months of credit history overall.

LendingClub also offers auto refinancing loans and business loans in addition to their personal loans. Those loans come with their own sets of requirements, too.

LendingClub Loan Requirements:

• Requirements for all loans: 18+ years old, SSN, bank account, U.S. citizen/permanent resident/immigration-visa holder.
• Requirements for personal loans: Credit score of 660+. Debt-to-income ratio of less than 40% (excluding mortgage and LendingClub loan request). At least 2 revolving credit accounts open. No more than 5 credit inquiries in past 6 months. At least 36 months of credit history.
• Requirements for auto refinancing loans: Credit score of 510+. Car must be 10 years old or newer with under 120,000 miles and must be a personal-use car. Loan being refinanced must have been open at least 1 month, have at least 24 months of payments left, and have a balance between $5,000 and $55,000.
• Requirements for business loans: Fair or better personal credit. At least 12 months in business. At least $50,000 in annual sales. No recent bankruptcies or tax liens.

It's important to note that you don't necessarily need to meet every one of LendingClub's requirements to be approved. For example, people may be approved with lower credit scores (as low as 600, reportedly) if they have a high income. But it's probably best to apply only if you satisfy all of LendingClub's qualifications.

If you're not sure how well you meet LendingClub's requirements, you can always use WalletHub's personal loan pre-qualification tool to check your odds of approval for a loan (as well as your potential rates). You'll be able to see your chances with both LendingClub and a number of other lenders.

In addition to getting a loan from LendingClub, you can also become an investor and fund loans yourself. To do so, you must be at least 18 years old with an SSN, and have your identity verified by LendingClub. You must also make an initial deposit of at least $1,000, and invest at least $25 at a time in the future.