Is Lending Club Legit? for Investor & Borrowers (Reviews 2022)
If are you planning on borrowing or investing in LendingClub then you must read this article about whether is Lending club legit or not.
The LendingClub is a digital bank where people can invest for good returns and also apply for business or personal loans between $1,000 to $40,000.
They have really transformed the banking system with peer to peer model where investors lend money directly to the borrower through this Lending club website.
What is the reality and is it safe for you to invest or borrow loans in 2022?
Stick with this article, as I am going to share the latest customer reviews and also let you know whether is Lending club safe or risky.
First, let’s see is Lending Club legit for Borrowers and then continue with investors.
Is Lending Club legit for Borrowers?
Yes, a Lending club is a legitimate business for borrowers to get business or personal loans at much less interest than charged by the other banks.
Let me explain how.
LendingClub was founded in 2007 and since then approx 4 Million people have joined the Lending club to meet their financial needs.
They have approx 2 Million+ visitors on their website every month.
I made deep research to find more about LendingClub and fortunately, I found a friend or I can say my Aunt who just got a personal loan for 9% of the interest from LendingClub where the bank was charging her 17%.
All the above information clearly indicates that the lending club is Legit. But there are a few cons of LendingClub that you should know
- High Application Fee
- Misleading information by the LendingClub employees
- Poor Customers Service
5 Key Points that you must know as a Borrower
- The first thing you need to know is that LendingClub personal loans are available to people with fair credit or better, and people with scores at the top end of the bad credit range may even be able to qualify.
- Second, LendingClub does charge an origination fee, unlike some personal loan providers. The amount of the fee depends on your creditworthiness.
- The third key thing to know about LendingClub personal loans is that they offer a relatively large amount of funding, with loans ranging from $1,000 to $40,000.
LendingClub loans last for either 36 or 60 months, so borrowers get quite a bit of time to pay them off.
- Fourth, LendingClub is transparent and has a mostly positive reputation with users and regulators. This should make people who don’t have much experience with peer-to-peer lenders feel more comfortable.
- Finally, like all personal loan providers, LendingClub advertises a pretty broad range of possible interest rates. The exact rate you’ll be offered depends on factors such as your credit score and income, and you won’t know exactly what it is until you apply and get approved.
Is Lending Club Legit for Investors
Yes, the Lending Club is a legitimate business website for investors but is it safe enough to invest money or totally scam?
I will share one of my friend’s 3 years of experience while investing in lending.
I will share about him how much money he made in returns while actually using and investing in the lending club and also on an annual percentage.
Read carefully as you will get to know whether or not you should invest in a LendingClub.
Since the lending club claims you can make up to a 26% return on your money we’re going to see if that’s true or not
Is Lending Club a good investment
Loans are usually anywhere from two to three to even five years in length and you cannot pull out your money within that time.
So you need to invest accordingly.
Now if you take my recommendation, I won’t suggest investing in the Lending club for which I will give 5 reasons.
- The first reason is the 1% fee that LendingClub charges to the investors. This might not sound too high but after a time when you are compounding your interest every year, that 1% fee adds too much.
- Lending Club notes have 2 to 5 years in length which means you cannot withdraw your money even if you get any good opportunity from somewhere else.
- The lending club’s high default rate is the third reason why you should not invest in them. On average 8% of the notes are default.
- The default borrowers who fail to pay, your that money is either wasted or recovered it would be like few dollars. That’s really disappointing.
- Income proof verification is not so good in Lending club as they just ask for the payment proof statement to verify what they mentioned in the application. That is of course putting investors at more risk.
However, this depends on investors to investors as there are many investors who are happily running their investments with the Lending club.
If you have no problem with the above reasons that I mentioned then you can also invest in them.
I would recommend that you should start with the least amount.
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Lending Club Reviews
So far you read whether is Lending Club legit or not and now you must read the reviews given by the Lending customers.
Reviews shared by the customers are one of the best ways to analyze any business before doing any business with them.
Here I will share the reviews of LendingClub customers shared on a few best review platforms like BBB and Trustpilot.
Read the below information carefully as this will help you to understand what exactly people have given their reviews.
LendingClub Reviews on TrustPilot
Trustpilot is one of the popular review platforms to check reviews of any business given by their customers.
As of August 2022, there is a total of 3,986 reviews of LendingClub on Trustpilot in which they have got a 4.8★ rating out of 5.
This is an excellent rating which indicates that LendingClub is a legit and safe business.
The majority of the reviews given here are given by the borrowers who are really satisfied. Most of the reviews say
- LendingClub has an excellent and simple way to apply.
- The interest rates are far lower and better than the banks and credit cards company.
But there are also negative reviews where customers were really unhappy with their high application fee.
LendingClub Reviews on BBB
BBB (Better business bureau) is one of the biggest organizations where people living in the United States make their reviews and complaints about any business.
On BBB. there is a total of 2,062 reviews of LendingClub in which they have got a 4.5★ rating out of 5.
This is an excellent rating which indicates that LendingClub is a legit business and safe as well.
When I opened their complaints page, I found people complaining that they were charged money in advance to get the loan and even many were asked for their personal information like SSN number.
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Is Lending Club Risky or Scam?
No, LendingClub is not a SCAM and is a legitimate business.
But yes, there are risks included with the investors as there is around 8% of the borrowers are considered to default.
To give you more accurate and satisfying answers I made more research and found the people saying LendingClub is a SCAM.
The truth is they were right and also got scammed but not by the LendingClub.
Many borrowers in seek of loans make several mistakes and get scammed by the scammers who contact them in name of LendingClub or any other reputable business.
Points to remember to avoid such Scams
- Never share your personal details with anyone one calls who claims that they are from LendingClub.
- Do not open any link shared by the people who call you by name of LendingClub, These links can be phishing and can be shared either through email or messenger.
- Do not make any advance payment for quick loan approval as this is not a part of any legit business.
The scammers may even ask you to pay through gift cards or also ask for your computer access. Avoid such scams and speak to the Lending club customer support directly.
How does LendingClub work (is Lending Club legit)
As an investor, you could pick the loan and interval notes yourself or you could also have it auto-invested by the lending club to automatically pick the notes.
There are different ratings for the notes that you can invest in anywhere from A class which is considered the lowest risk with the lowest return. All the way down to FG which is considered high risk but also you should more likely get a higher return
So in this overall procedure, the Lending club acts as a mediator and charges the commission of 1% from the investor.
As a Borrower, the lending club allows you to apply for loans between $1,000 to $40,000 which depends on your credit score.
Once you get approved, you will have to pay the application fee to the Lending Club and even they take 6% of the interest.
But the overall majority of the borrowers had a good experience with them as they got loans quickly at low-interest rates as compared to the other banks.
Types of Loans offered by LendingClub
Hopefully after reading this article on is Lending club legit your all doubts are cleared and now you need more information about the types of loans provided.
There are 7 types of loans available to borrowers by the Lending Club.
- Cash Loans
- Balance Transfer Loans
- Co-borrower loans
- Auto Refinance loans
- Home Loans
- Student Loans
- Payday loans
- Debt consolidation loans
If you are interested in any of these loans then you can get more details on the type of loans by visiting their website.
Lending Club Best Alternatives for Personal Loan
If you still have confusion or doubts about LendingClub then you can also check a few best alternatives to LendingClub.
I am sharing the 4 best alternatives with full comparison.
But before that let’s see what Lending Club offers
Min Credit Score – 600
Loan Amount – $1,000 to $40,000
Loan Term – 36 or 60 months
Est APR – 10.68% to 35.89%
Min Credit Score – 648
Loan Amount – $5,000 to $100,000
Loan Term – 2 to 7 years
Est APR – 5.99% to 21.20%
Min Credit Score – 640
Loan Amount – $2,000 to $40,000
Loan Term – 3 to 5 years
Est APR – 7.99% to 35.99%
Min Credit Score – 640
Loan Amount – $5,000 to $40,000
Loan Term – 2 and 5 years
Est APR – 5.99% to 24.99%
Min Credit Score – 620
Loan Amount – $7,500 to $50,000
Loan Term – 24 to 60 months
Est APR – 7.99% to 29.99%
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FAQs on Is Lending Club Legit
How hard is it to get a loan from LendingClub?
Applying for a personal loan with Lending Club is pretty simple and easy. If you meet their requirement of a minimum 600 credit score you can easily qualify for the loan.
If your credit score is good and near to 700 then the chances are that procedure will be quick and also the amount as well.
This may get delayed if you have a low credit score. You can check your eligibility by going to the LendingClub rate check page.
Is the Lending Club refund legit?
There have been many complaints from customers where they reported that LendingClub falsely reported that there are no hidden fees for a specific loan. But later borrowers were charged a high fees.
FTC is sending payments to the customers who have filed a claim.
So far FTC has sent 61,990 payments totaling $9.7 Million to LendingClub borrowers who were charged a hidden fees by the LendingClub.
Does LendingClub build credit?
Yes, Lending Club or any such banking services will build and improve your credit score if you pay your loan amount timely.
Many people just apply for small loans from such banking services with the intention to improve their credit score by paying the EMI on time.
Keep in mind, that if you get default or delay the payment your credit score will go much down.
Is LendingClub FDIC insured?
Yes, LendingClub is FDIC insured up to the highest possible amounts allowed.
But you read the entire details on this on their security page and even speak to their customer service for the exact information.
I am pretty sure that you got the answer to Is Lending Club Legit? And also got all the related information that may have cleared all your doubts.
If you take my recommendation, LendingClub is better for the borrowers than for the Investors.
The loan process is easy to apply and even the interest rate is low if you have a good credit score. As an investor read the terms I mentioned above and initially, you can start with them with a small investment to evaluate the results.
Please comment in the comment box if you have any suggestions or any questions related to this article.