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 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 3.49% - 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 3.49% - 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 7.95% - 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 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.

An applicant's LendingClub approval odds are highest when they have a credit score of at least 660, at least 36 months of credit history, and a steady income. They should also have a debt-to-income ratio of less than 40%, not including mortgages or the loan amount they're requesting. In addition, it's best to have at least two open revolving credit accounts and no more than 5 credit inquiries in the past 6 months (not counting mortgages or auto loans).

Your LendingClub approval odds will decline with each requirement you do not meet. But it's still possible to get approved if another area makes up for it (e.g. a high income and a low credit score).

LendingClub assigns letter grades to potential borrowers based on their creditworthiness before posting their loan request on the site. An “A” grade is the least risky, while “G” indicates the most risk. These grades take into account the borrower's entire profile, including credit score, income and existing debt levels. The better your letter grade is, the better your approval odds should be.

Around 78% of all approved LendingClub loans have been graded “A” through “C.” LendingClub does not disclose what percentage of applications that receive each grade get approved. But it's clear that LendingClub issues far fewer loans to people with more risky profiles.

Estimated LendingClub Approval Odds, Based on Loans Issued

There is a quick and free way to get an idea of your LendingClub approval odds. Just plug in a few details into WalletHub's personal loan pre-approval tool, and you'll be able to check your odds of getting a loan with LendingClub and multiple other lenders. You'll also get an idea of what rates you might receive if approved. This check does not affect your credit score in any way, and it can help you avoid applying for the wrong loans.

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.

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.