Lending Club is a peer to peer lending service. Instead of borrowing money from a bank, you borrow from individuals that you connect with at the Lending Club Website.
Other peer to peer lending networks, such as Prosper.com, exist. Lending Club tries to differentiate itself through the connections between borrowers and lenders. In some cases, you borrow money from somebody who has a common interest or background.
Lending Club Eligibility
- Age 18 or older
- An existing bank account and Social Security Number
- FICO credit score of 660 or better
- Debt to income ratio of 25 or lower (excluding your mortgage)
- No major negative items at credit bureaus
How Lending Club Loan Requests Work
Your loan is listed at Lending Club for 2 weeks. If it is not fully funded after 2 weeks you can either take the available money (for partially funded loans) or resubmit your loan request.
Using Your Loan
You can have up to 2 loans outstanding at Lending Club at any time.
Repayment starts one month after your loan is funded, and you make monthly payments. Lending Club automatically deducts required payments from your bank account.
You must pay your loan off within 3 years, but you may pay the loan off early without any prepayment penalty.
Lending Club Fees
Fees for borrowing are somewhere in the ballpark of 0.75% to 3.50% of the loan amount. If you miss a payment, you’ll pay additional penalty fees.
You will not know who is lending you money, and lenders won’t know who you are. Any communication or questions about your loan will go to Lending Club.
Lending Club will check your credit before offering a loan. In addition, they report your repayment activity to the credit bureaus.
For more on how Lending Club works and how it's different from the competition, read the summary of an interview with CEO Renaud Laplanche.
Return to the Peer to Peer Lending Overview.