LendingClub Bank Review

Hailed as one of the best personal loan provider in the US, Lending Club has recently partnered with Radius to give users access to competitive rates and fair credit. Aside from its Checking and Savings accounts, Lending Club also offers different kinds of loans and insurance.

The company’s loan options include mortgages, student loans, credit cards, and personal loans. While it’s true that Lending Club has a wide range of services, how viable are these offerings for the users?

In this Lending Club review, we’ll discuss different features, pros, and cons of the banking platform.

What is Lending Club?

Lending Club is an online banking platform that’s primarily known for its personal and business loans. However, they also offer other services, such as CDs and bank accounts. Together, these features make Lending Club a good option for people who want all their banking needs to be met in one channel.

Lending Club Bank Accounts 

Lending Club’s bank accounts are popular among users for a reason. For one, their Checking Account has been awarded as the best bank account of its kind by Nerdwallet. Likewise, GOBankingRates also awarded Lending Club with the title of Best Checking Account of 2020.

Checking Accounts 

Lending Club’s checking accounts are a great resource for people who want to earn cash back and interest. According to the company, you can make an account in under 3 minutes online.

Here are some features of the Lending Club Checking Account.

  • Banking Channels: Nowadays, people want their finances to be available on all channels, and that’s what Lending Club provides. You can access your finances any time of the day using mobile or online banking.
  • Early Payment: If you set direct deposits in your Lending Club checking account, you will get your monthly payments two days before time.
  • Mobile Wallet: Users can also pay through SamsungPay, GooglePay, and ApplePay. All you have to do is add your debit card to these mobile wallets, and you’re good to go.
  • No Fees: Lending Club does not charge any ATM fees, whether it’s on their network or off it.
  • Personal Finance Tool Set: If you’re just getting started with finance management, this toolset will come in handy since it has all features to manage your finances.

Moreover, the company uses 256-bit encryption to ensure the customers’ data is secured against any kind of breaches. All your deposits in the Lending Club checking account are FDIC-insured up to $250,000.

Finally, Lending Club has exceptional customer service that you can reach through phone or their online chatbox.

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Savings Accounts

Lending Club’s saving accounts are just as good, allowing customers to take advantage of their high rates. You can apply for the account online in just a few minutes and start earning through high interest rates without any additional fees.

You get 0.25% APY on an account balance of over $25,000. Meanwhile, there is no minimum balance requirement provided you have $100 in your account. Plus, there are no ATM charges or monthly service fees, making this bank account a wiser option than some of the competition.

To open an account, you need a social security number and $100. With these two things, you can open an account in under three minutes.

Here are some features of the Lending Club Savings Account:

  • Budgeting: The company’s financial planning tool lets you create a budget that you can follow for the month or the year.
  • Spending: You can also keep track of where you’re spending your money every month.
  • Trends: The tool’s Trends feature lets you see where you spend most of your money. In this way, you can keep track of your spending habits and manage them according to your budget.
  • External Accounts: Lending Club also lets you link external accounts so that you can see all your financial information in one place.

Goal Keeper 

Lending Club’s Goal Keeper is a feature in its savings account. When you log in to your mobile app, you will spot Goal Keeper in the menu. Using it is quite simple as you simply need to create a goal.

For instance, you might want to buy a new laptop. You can create a name and a picture of your goal.

Then, you have to set an amount, which may be anywhere around $1000 in this case. Finally, choose the savings rule by which your money should be saved. After that, Lending Club takes over the rest.

Goal Keeper is a useful feature since it allows automated savings. Even if you don’t manually save an amount, Lending Club puts a reasonable amount – according to the savings limit you have set – into your Goal every week.

Credit Card Account 

Lending Club also offers credit cards with their accounts that come with valuable rewards and features for the users. Users can activate their cards, make payments, transfer balances, view statements, and redeem rewards using the online mobile app.

Lending Club Advantage Program 

Once you become a Lending Club client, you’re automatically enrolled into the platform’s Advantage Program, which comes with a wide range of features.

Cash Back 

When you make any in-store or online signature-based payments using Lending Club’s debit card with the Champion or Rewards Checking account, you get 1% unlimited cash back.

All you have to do is select ‘credit’ rather than ‘debit’ as the point-of-sale.

Referrals 

Moreover, Lending Club pays its customers for referrals. When you refer your friends or family, and they activate their account, you get $50 as a reward.

Marketplace 

Lending Club’s marketplace is an all-in-one portal where users can manage their money. Whether you want to utilize a financial product, opt for insurance, or save money for your kid’s college, Marketplace has a number of financial options.

Lending Club Store 

When you have spent considerable time with the banking platform and upgraded your features, you can choose a gift from their store. Lending Club has multiple merchandise items in their store, including apparel and tumblers.

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Lending Club Loans 

As its name indicates, Lending Club is mostly used for lending money. Their personal loans are suitable for people who have good to excellent credit scores. However, their rates are much higher than some of their competitors.

The company began giving loans in 2007 as per the peer-to-peer lending model. According to the company, they have given over $50 billion in loans to over three million applicants.

Today, Lending Club gives traditional online loans, most of which are taken for debt consolidation and credit card refinancing.

Once you apply for a loan, it passes through Lending Club’s screening process, in which investors make the final decision for lending. They use different metrics, such as income data and credit score, to make this decision.

Moreover, the interest rate is also decided according to these figures. Typically, the interest rate ranges from 5.99% to 35.89%. On top of that, the company also charges a 1% to 6% origination fee.

However, borrowers who are unable to make their payments on time can use the company’s hardship plan. It allows borrowers to make interest-only payments for the next three months, giving them time to get into a decent financial position.

Lending Club normally takes seven days to process a loan application. If your loan is approved, it will arrive in your bank account.

Qualification Requirements 

To qualify for Lending Club loans, the applicant’s FICO score must be over 660. However, the company offers loans to two types of borrowers, and the requirements differ for each:

Prime Borrowers 

Lending Club’s prime borrowers must have a credit score of over 705. Plus, their income is around $84,647 per annum, and the average loan size in this type of borrower pool is $15,369.

On average, Lending Club charges them an interest rate of 8.46% – 20.74%, depending on the credit score. In this category, most people take loans for large purchases, debt consolidation, and credit card refinancing.

Near-prime Borrowers 

Near-prime borrowers have a credit score of 640 and an annual income of $69,082. On average, they take loans of $8000 or more and are charged an interest rate ranging between 15.54% and 30.99%.

The reasons for taking out these loans are similar to what’s mentioned above. However, people rarely take these loans for large purchases.

Highlighting Features 

Lending Club’s loans have been popular among individuals and businesses for the following reasons:

  • Debt Consolidation: Lending Club offers a balance transfer loan, which particularly helps borrowers pay off their credit cards and other kinds of debts. The company sends the loan proceeds to 12 or fewer creditors, making the debt consolidation process easier. Despite this extra service, the rates and terms for this loan are the same as the company’s other loans.
  • Member Center: The Member Center helps users track their credit and money. It has a Credit Profile tool that lets members see important information, like their credit score, credit utilization, and debt to income ratio.
  • Co-signed Loans: People who cannot get a loan alone can opt for joint loans or co-signed loans. The total debt-to-income ratio of both parties collectively should be below 35%.
  • Soft Credit Pull: You can check the rate on your loan from the company’s website with a soft credit pull. In this way, your credit score will not be harmed. However, once Lending Club issues a loan, a hard credit pull will be generated.

Like all other lenders, Lending Club offers mortgages, personal loans, student loans, etc. What makes Lending Club different from other lenders is its Yacht Program. The company offers adjustable rates, fixed rates, and interest-only options to customers.

Shortcomings 

As compared to other lenders, Lending Club has high starting rates. Moreover, the loans have late fees and origination fees.

Most other lenders offer a discount to borrowers for autopay since they want to incentivize on-time payments. However, Lending Club does not offer a discount rate.

Additionally, borrowers can only select from two repayment terms; five years and three years. So, there’s no shorter repayment term for borrowers to choose from. Alternatively, you cannot opt for longer repayment terms to make your monthly payments smaller.

Pros of Lending Club

  • Number of Features: Lending Club, although primarily a lender, also has other services, such as CDs, saving accounts, and checking accounts. Therefore, users can enjoy digital banking in its full form at Lending Club.
  • Financial Tools: The platform has many financial tools to help users budget, track, and spend their money wisely. Plus, its Advantage Program allows users to earn cash back and other rewards.
  • Soft Pull: Lending Club lets people check the rates on their loans without a hard pull, which is helpful when it comes to comparing different lenders.
  • No ATM Fees: With Lending Club, you do not have to pay any ATM fees, even if you’re using an off-network ATM.

Cons of Lending Club 

  • Longer Wait: Lending Club takes seven days to process a loan application, which is much longer than other online lenders. Some of them even process an application in two business days.
  • Origination and Late Fees: Lending Club charges an origination fee according to the borrower’s credit score. Plus, there are late fees too.
  • No Discount on Autopay: While most other lenders offer discounts for autopay, Lending Club does not offer this incentive.

Final Verdict 

To conclude, Lending Club is an ideal digital banking platform for people who want to save money or take loans for homes, cars, or education. Lending Club offers free ATM transactions and 1% cash back rewards on some purchases.

However, it’s better for individuals with fair to excellent credit scores than those with poor scores since the latter will have to pay hefty interest rates. Plus, it’s a great option for not-for-profits since the bank has specialized products and customized solutions for them.

Despite its many features, Lending Club might not be suitable for everyone, considering the long waiting time for loan processing and high interest rates.

To sum up, Lending Club is not everyone’s cup of tea, but it’s definitely an excellent choice if you have a high credit score and want a digital financing platform for all your needs.

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