Have you ever looked for a loan, but weren’t approved? Ever wondered if there were an alternative to traditional bank financing?
There’s an option you might be interested in. Lending Club is a platform which offers peer to peer lending, allowing people who need a loan to stay away from traditional banks.
Is Lending Club safe? Is it a good option for those who want a loan? What about for people with bad or no credit? Here’s what Lending Club reviews had to say.
What is Lending Club?
When we first saw your requests for Lending Club reviews, we thought we were going to find ourselves on one of those other lending sites. You know, the ones where you enter your information, only to be cycled through to six dozen other “loan agencies.”
Let’s face it, there are a lot of lending sites out there. Some of them are scams, and are used for data collection and, ultimately, identity theft. Others are illegal – for example, in some states it’s against the law to take out a payday loan.
Lending Club wasn’t exactly what we expected. Instead of a loan network, Lending Club offered options for peer to peer lending.
There are a few categories of loans on the Lending Club website. You could apply for up to $40,000 in a personal loan. You could apply for up to $300,000 in a business loan. Or, you could use the website to find financing for auto or medical expenses.
Lending Club works with two categories of people: the borrowers and the investors.
Borrowers, obviously, are in need to a loan. Investors purchase notes backed by payments made on loans. The result is a virtually bank-free way to start a business, pay for medical expenses, or borrow money for vacation.
So what do the Lending Club reviews say? Are people generally happy with the experience? Let’s take a look.
Lending Club Reviews
Let’s start from the very beginning. How easy is it to get approved for a peer to peer loan with Lending Club? As it would turn out, it’s not too easy.
As an alternative lending solution, one would think that it would be slightly easier to get approved for financing. But in some cases, borrowers needed to have a credit score of 660 or more just to get approved.
Similarly, interest rates were both prohibitive and unusual. Some borrowers were approved for loans, but only if they agreed to pay an interest rate of up to 17%. That can mean over $3,000 in interest on a three year, $10,000 loan.
Three years was the typical loan repayment term in Lending Club reviews. And a lot of people complained that because of this short time frame for repayment, their monthly payments were high.
Lending Club reviews also complained of harassing phone calls. Think about the last time you took out a car note. What happened when you missed a payment, or were late. Were you called? Probably not. You may or may not have gotten a late notice, or an email.
People who missed a payment with Lending Club were called incessantly. One their home phones, cell phones or work phones. Lending Club reviews said that this was a source of huge embarrassment for them.
Not all the reviews were bad, though. Some people had good things to say about the company.
Positive Reviews for Lending Club
The majority of Lending Club reviews which had good things to say were from those with good credit. People with a credit score of 700 or higher seemed to have the best reviews of the service.
These reviewers said that the application process was easy, and that they were approved within minutes. Most received their funds within a few business days.
Other reviews said that customer service was friendly and helpful. Peer to peer lending is an unfamiliar concept to some, and there were borrowers who had a host of questions. They said that customer service handled these questions quite nicely.
The biggest complaint among those with good credit was the amount they were approved for. However, the rates and the amounts of the loans are determined by the type of loan. For example, you won’t get as much for a personal loan as you would for a business.
People liked the number of options they had to make payments on their loan. They could pay via check, online or over the phone. Alternatively, payments could be automatically deducted from their bank accounts.
Should You Apply for a Lending Club Loan?
If you’re looking for an alternative to a payday loan or you’re just looking to get away from the traditional bank loan, it might make sense for you to give Lending Club a try. For most, the application process was simple, although some did complain of having to furnish tax forms.
But if you’ve got poor credit, or if you have a lower income than would qualify you for a traditional loan, Lending Club might not be your best bet. The interest rates on the loans might be higher than your budget might fit. And you may not be approved in the first place.
You absolutely must have a high debt to income ratio. Applying for a $20,000 loan with a $30,000 income and that much in credit card debt will get you nowhere. In fact, you’ll end up with an inquiry on your credit report, which will leave you worse off than you’d been before.
You can check Lending Club to see if you can be pre-approved, but not all Lending Club reviews say that this is reliable.
If you’ve got good credit, go ahead and apply for a Lending Club loan. For anything less than perfect credit, you’re probably better off applying through a traditional bank or credit union.