LendingClub Review: My Experience Using LendingClub

(Money Under 30 Rating)



If you have difficulty getting a loan from traditional lenders, there’s another option worth considering. I found LendingClub was a quick, fun way to build my credit while also getting the money I needed. I used it for a car payment refinance and was surprised not only with how easy the application process was, but also how quickly I received my loan after approval.

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Interest rates


Ease of use


Consumer service


Best for:


  • Borrowing for unconventional expenses
  • Credit-challenged consumers
  • Joint applicants
  • Adventurous investors

Editor's Note - You can trust the integrity of our balanced, independent financial advice. We may, however, receive compensation from the issuers of some products mentioned in this article. Opinions are the author's alone. This content has not been provided by, reviewed, approved or endorsed by any advertiser, unless otherwise noted below.

I’ve known about LendingClub’s unique alternative to traditional lending for a great many years at this point. 

In 2006, I took out a personal loan to consolidate high-interest credit card debt. Doing so helped me pay off my debt in just three years and, quite frankly, changed the course of my life.

When I emerged from debt, suddenly I had this money I had been putting to monthly debt payments available to invest. So I padded my emergency fund, maxed out a Roth IRA and began looking for other ways to diversify my investments.

As an experiment, I began making small investments in loans to other people through LendingClub. Obviously, I was pretty high on the idea and — full disclosure — I became an affiliate of both sites (meaning this site may earn a commission for referring new customers).

Even 15 years ago, getting a personal loan to pay off debt wasn’t unusual…except that the loan from LendingClub didn’t come from a bank. It came from other people just like you and me. And what I now know is that helping others who either can’t or aren’t interested in getting a loan through traditional lenders is a legit and not uncommon way for regular people to loan other regular people money without a bank.

What is LendingClub?

LendingClub is the largest peer-to-peer lending network that offers borrowers competitive personal loans for any purpose that are financed by lots of individual investors who chip in amounts as little as $25 to each loan. Founded in 2007, LendingClub has made over $11 billion in loans and paid investors over $600 million in interest.

Peer-to-peer lending

Utilizing what’s commonly referred to as peer-to-peer lending, you can either invest in LendingClub so that functionally speaking – you become the lender, or you can take a loan from LendingClub as the borrower.

Consumers wanting loans for any purpose—whether to consolidate debt, fund a wedding, or grow a business—create a loan application with LendingClub. Investors, on the other hand, who want to put their money to work in LendingClub go ahead and lend money and collecting interest.

How does LendingClub work?

Let’s say you want a $1,000 loan. I invest $25 to lend you (along with 39 other people in LendingClub). We keep our individual investments small in case you default on the loan.

We agree on an interest rate and a term, and you begin paying back the loan. The peer-to-peer network (e.g. LendingClub) disburses the money and collects your payment each month. They take a fee for originating the loan. Then, they take the interest you’re paying on your loan each month and pay it to me and the other investors.

In most cases, investors with LendingClub make very small (as little as $25) investments in each loan. That means that, for a given borrower, he or she is actually borrowing money from hundreds of different investors.

Meanwhile, investors enjoy lower risk by spreading their money across hundreds of loans. And then LendingClub makes money from origination fees on each loan and from taking a small percentage of investor profits.

Setting up an account with LendingClub

The first step in setting up an account with LendingClub is checking your credit. You can choose to apply on your own or add a co-applicant, with the latter helping you out if you find your credit score makes it tougher to get approval.

You can always add a second person later on if you don’t get the loan offer you want.

LendingClub Review: My Experience Using LendingClub - Who's applying?

From there, LendingClub will start collecting information from you. You’ll input your date of birth, then gather some information about your income.

LendingClub Review: My Experience Using LendingClub - How Much Do You Make?

If you’ll be using income in addition to your work earnings to repay the loan, you can check the box and answer questions about those in the next step. Alternative sources of income can include:

  • Alimony.
  • Child support.
  • Maintenance income.
  • Income from secondary jobs or side hustles.

In the next step, you’ll simply be asked to give an estimated amount of extra income. You won’t have to be specific about where you’ll get the extra money.

Now we arrive at the section where you specify how much money you want. You can input any amount here, but the offer you get will be based on your creditworthiness and the amount you’re requesting. LendingClub also wants to know how you’ll be using the money. The options are:

  • Credit card refinancing.
  • Debt consolidation.
  • Home improvement.
  • Major purchase.
  • Home buying.
  • Car financing.
  • Green loan.
  • Business.
  • Vacation.
  • Moving and relocation.
  • Medical expenses.

There’s also an “other” option, and if you check that, no further questions are asked about the usage of the money. However, keep in mind that you may get more interested investors for certain expenses. If, for instance, you’re consolidating your loans or paying for medical expenses, there could be investors who are interested in helping those who need assistance with those costs.

LendingClub Review: My Experience Using LendingClub - Custom Rate

Now that LendingClub has collected the information, it’s time to run a credit check on us. This is when I had to start inputting my personal data. It’s important to note that LendingClub runs a soft credit pull on applicants, which means we won’t have to worry about this process dinging our credit. However, once you accept the terms and take the loan, your credit report will be affected as it would with a bank loan.

Pricing for LendingClub

As with any lender, the rates you’ll pay with LendingClub will be based on your current credit situation. LendingClub factors in your credit score, the amount you owe other creditors, and how much money you’re borrowing. The annual percentage rates on LendingClub range from 6.95%–35.89%.

But there will be some other fees associated with your use of this service. LendingClub charges a loan origination fee, which will be a percentage of the total amount of the loan. That fee will be combined with the interest rate to form your APR. As long as you pay your monthly payment on time, though, you won’t pay any extra fees, only that APR.

Loan origination fee1%-6% of the total loan amount
Prepayment fees$0
Applications fees$0
Brokerage fees$0
Late payment penalty (after 15 days)5% of unpaid payment or $15, whichever is greater

Why get a loan from LendingClub?

You’ll get many benefits from using LendingClub as both the borrower and the lender, including:

Peer-issued loans

Tired of dealing with lenders? LendingClub is a great alternative. You’re borrowing money from investors, who then earn money on the interest you pay in. 

So if you’ve hit a dead end with banks and credit unions, LendingClub can be your next stop. You’ll still go through an approval process, but you may find you get an offer with a lower interest rate than you were offered by traditional lenders.

Opportunities for investors

Borrowers aren’t the only ones who get to enjoy the perks of LendingClub. Investors who know what they’re doing can set up a portfolio by issuing low-risk loans, then reap the rewards in the form of interest payments. It’s a unique alternative to investing in stocks or real estate, but you’ll compete with other investors for the best loans.

Quick loan turnaround

Perhaps the biggest benefit LendingClub brings over other lenders is speed. That is, you can get a loan fairly quickly and use it for any purpose.

I saw the money in my account within just a few days of applying, which was far faster than I would have seen with a bank or credit union. Sometimes that wait can be excruciating, which makes LendingClub pretty attractive.

Flexible usage options

Lenders understandably get a little personal when we’re asking to borrow large sums of money. In other words, they want to know how we’ll spend the money we’re borrowing.

LendingClub similarly asks this question but answering that you’ll be using the loan for an exotic vacation won’t automatically get your loan thrown out. Keep in mind, though, that investors may not line up to finance this type of request as they would a loan to pay medical bills or consolidate your debts.

Who is LendingClub best for?

Consolidating Debt

Debt consolidation helps out in a variety of ways. Primarily, it allows you to combine multiple payments into one. By consolidating all those debts, you’ll typically find your monthly payment is lower than what you were paying previously.

This benefit is even better if you can land a low-interest rate during the consolidation. With LendingClub, you may find interest rates on debt consolidation are more competitive than what you’re offered through a lender.

Forgetful bill payers

We’ve all forgotten to pay a bill, especially when we don’t have things set up on autopay. LendingClub takes care of this for you. Once your loan is approved, you can set it up so your loan payments are automatically transferred from your bank account. You can also apply to pay your creditors directly through LendingClub website, possibly even at a lower interest rate than you were paying before. 

Joint applicants

Rebuilding credit can be tough, particularly with so many lenders hesitant to take a risk. LendingClub lets you apply with a co-applicant to boost your results. You can do this from the start or add the second applicant after you’ve seen your offer. This can help you reduce your interest rate by decreasing the risk to investors.

Investors who want to diversify their portfolio

If you’re interested in peer-to-peer lending and okay with it being a somewhat riskier investment route (loans are unsecured and can default), you have the opportunity to gain with higher rates of returns than other investments you may have in your portfolio.

One strong advantage of peer-to-peer lending is that you don’t have to fund another person’s entire loan, effectively minimizing the risk with each of the loans you issue.

Who shouldn’t use LendingClub?

Risk-averse investors

Credit card companies and lenders deal with late payers and defaults all the time. Lending-based businesses even build that anticipated loss into their yearly projected income. Although platforms like LendingClub will allow late payment penalties to help prevent those behaviors, there’s no guarantee. You’ll still face the risk that your borrower will default on the loan. But LendingClub does let you share that risk with other investors, with each of you lending a small chunk of the money. This can help offset your individual risk.

Novice investors

As appealing as LendingClub can sound, the truth is, it’s gotten quite competitive in recent years. You’ll find you’re competing alongside investors with deep pockets for those lower-risk borrow requests. Even worse, these experienced investors have access to resources, along with years of experience, that can help them locate those great opportunities and snatch them up before you even see them. If you’re new to investing, there are better options.

Low-credit borrowers

Sure, you can get a loan through LendingClub if your credit score is struggling, but that’s not the best idea. You’ll probably find the interest rate you’re quoted is much higher than what you’d find through other alternatives like loan aggregators. But it is an option if you can’t get a loan elsewhere. Just make sure you price multiple lenders to know whether the offers you get through LendingClub truly are the best deal.

Those wanting the personal touch

There’s a benefit to getting personal advice on your financial decisions, especially if that advice is from an expert. You’ll miss out on that experience if you use LendingClub. As convenient as the online interface is, you’re simply inputting information and getting an offer in response, with no context offered. This can leave you with plenty of questions and no answers.

Pros & cons


  • Flexible spending options — You can obtain financing for expenses like vacations, moving costs, or starting a business.
  • Fast loan turnaround — Once approved, money should be in your account within a few days.
  • Support individual investors — Instead of paying interest to a bank, you’re supporting investors who are building a portfolio.


  • Origination fee — You’ll pay a loan origination fee of 1% to 6% of the loan amount.
  • Bad deal for poor credit — Borrowers struggling to improve their credit scores will likely find it tough to get approved and, when they are, the interest rate is higher than some other options.
  • Competitive investing — Those wanting to get in on the investment side will likely find the competition is fierce for the lowest-risk borrowers.


LendingClub isn’t the only tool providing alternative lending options. Whether you’re a borrower or an investor, here are some alternatives to try.


LendingClub Review: My Experience Using LendingClub - M1 FinanceFor investors, one LendingClub competitor to consider is M1M1 combines the benefits of robo-advisors with the oversight you get while using a traditional brokerage. You simply deposit your money, divide your investments using the app’s Pie interface, then set a cash balance amount. Any amount above that balance will be invested as you’ve specified in your Pie.

Read our full M1 review.


LendingClub Review: My Experience Using LendingClub- CredibleIf you’re looking for a student loan, Credible can be especially beneficial. The platform attracts investors interested in helping students get a college education. However, you can also use Credible for personal loans and mortgages, as well as refinancing loans you already have. You can borrow in amounts between $1,000 to $100,000, with interest rates ranging from 2.15% – 9.15% APR. Credible also charges no origination fee, as the company makes its money by taking a commission from lenders.

Read our full Credible review.

My experience using LendingClub

My goal in using LendingClub was to refinance my car loan for a better rate. I completed the application and signed it directly within the app. Soon after, I received my offer, which included several options. One would have me paying more per year, but the loan would be paid off in 60 months. 

LendingClub Review: My Experience Using LendingClub - Ready for an offer

Another option saved me quite a bit on the yearly payments but stretched the overall loan term out to 72 months. The interest rate was higher on that option, which would mean with each payment, I’d be paying more money in interest, even though the monthly payments would be lower. It was definitely worth considering as I weighed the offers.

If your chosen loan offer goes through, you’ll be asked to provide supporting documentation. This could be anything from paycheck stubs to vehicle registration paperwork. You can snap a photo of each document and upload it directly in the app. When the paperwork is ready to be signed, simply sign on your screen and you’re good to go. No printing, mailing, scanning, or emailing required.

Once you’ve provided the required information, you’ll get an email letting you know your loan has been approved. From there, all that’s left is to start making payments. You can set it up so that this happens automatically to remove all risk that you’ll forget to pay your bill.


As you’re considering your many loan options, peer-to-peer lending is definitely worth having on your radar. It can open up opportunities to take out money for things traditional lenders won’t allow, such as vacations or weddings. Definitely price around before requesting offers on LendingClub so that you’ll know the interest rate you can get for similar borrowing through other avenues.

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About the author

David Weliver
Total Articles: 296
David Weliver is the founder of Money Under 30. He's a cited authority on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.