I knew that Lending Club was a good option for a loan, but I wanted to see what they would offer me. So on a Monday I booted up my computer and went to their website to check my rate. The interest rate they offered me was pretty good, so I filled out the application. On Wednesday I got an email from Lending Club saying my loan was approved.

Three days after I applied they deposited almost $3,000 into my checking account:

How can Lending Club offer loans with such low rates? And how did the money arrive so fast? The answer: Lending Club is not a bank. They do not have tellers or vaults like Bank of America or Chase. Instead, Lending Club only accepts loan applications through their website. The money they save by not having bank branches is passed over to their borrowers in the form of lower interest rates. Also, every single Lending Club loan is fixed-rate, meaning the interest rate will never go up, even if you make a late payment.

In this Lending Club review I’ll outline the application process step-by-step, showing you the things I did to get this loan.

5 steps to get a loan from Lending Club

The entire process for getting a loan through Lending Club is pretty simple.

Step 1: See what rate they offer you

Go to the Lending Club website and check your rate (some use MyInstantOffer). This is done with a soft inquiry (also called a soft credit check), so it will not show up on your credit history and it will not hurt your credit score. For my loan, I checked my rate on a $3,000 debt consolidation loan:

Lending Club will then ask you if you want to apply for a joint loan, which means a loan that two people apply for together. Doing this can sometimes help a loan get approved, or get a lower interest rate, but it can also slow down the loan process. I’m just applying on my own, so I selected the Just Me option and clicked Next:

Then they ask for your birth date:

Next they ask about how much money you make:

Then they ask for your name:

And your address:

Finally, type in an email address and password, put a check in the little box, and click the Get Your Rate button to see your offer from Lending Club:

Step 2: Accept (or decline) the loan offer

As seen below, Lending Club offered me a $3,000 loan with an APR of 16.5%. They have given me a rate as low as 10% in the past, but this still is not too bad. The loan was for 36 months (three years) and had a monthly payment of $99.83. I also had the option to change the loan amount to anything between $1,200 and $4,800, but I kept it at $3,000.

When you are thinking about accepting this loan offer it is probably best to ignore the “interest rate” on this screen. Just look at the APR. The letters APR stand for “annual percentage rate”, and they show the actual rate you would pay on this loan when both the interest rate and the loan fee are considered. Interest rate + fee = APR. Also, do not think you will be offered the same APR as me. Everybody’s rate is different, since every APR is calculated off each applicant’s credit history.

Once everything is set up correctly, and if the loan’s terms are to your liking, click the blue Continue button.

Step 3: Verify your identity with Lending Club

For this step you need to give a few pieces of information that help prove your identity and income. This may include questions about your housing situation and/or employment. You will also be asked to type in your social security number, which can be a little scary. Know that Lending Club’s website uses very powerful 256-bit TLS 1.2 encryption, so your social security number and other information is safe as it transmitted across the internet.

Step 4: Accept the loan’s rate and terms

Almost done! The moment you see the “Loan Rate & Terms” appear on your screen, know that you have reached the final step in the application.

You will see everything listed on the Rate & Terms page: your loan amount, the fees you pay, everything. So make sure to take some time to read everything over carefully. This page is basically a legal document, so clicking the “I Agree” button is like adding your signature to the bottom of your loan application.

Agreeing to this page also causes Lending Club to run a hard inquiry (or a hard credit check) on you. This credit check will remain on your report for 2 years, and may result in a higher interest rate on additional loans you take out in the immediate future. It is a good idea to wait at least 6 months between every application for credit (loans, credit cards, mortgages, etc). Note: my hard inquiry was done through Transunion.

Step 5: Connect your bank account, your email, and upload documents

Next you will be asked to connect your bank account to Lending Club. This allows them to deposit the money when your loan is approved, as well as take repayments from you every month until the loan is paid back.

This step is really easy if you have a major bank like Chase or Bank of America – just click your bank’s logo and type in your bank’s username and password. As a different option you can supply your bank’s account and routing numbers, but doing it this way requires a verification deposit that slows down your loan application.

Finally, Lending Club needed me to verify my email address by clicking the link in the email they sent me. They also needed me to upload copies of my Michigan driver license and last year’s federal tax return. Once I completed these tasks, Lending Club told me my application was being reviewed and that I would hear back from them soon:

Every application has different document requirements. Some loan applications do not need any documents at all. Others may need things like past tax returns, bank statements, or pay stubs. You can either upload the digital file (like a PDF) or you can send the documents to Lending Club by fax.

Lending Club timeline

Two days after applying Lending Club sent me this email saying my loan was approved:

Here was the timeline at Lending Club:

Monday June 4 (11 am): Checked my rate and applied for the loan

June 4 (11 am): Checked my rate and applied for the loan Wednesday June 6 (1 pm): Lending Club emailed to say loan was approved

June 6 (1 pm): Lending Club emailed to say loan was approved Thursday June 7 (9 am): Woke up and saw that Lending Club had deposited $2,820 into my bank account

Notice something funny? Lending Club did not deposit the full $3,000 that I asked for. I only got $2,820, so where did $180 go?

Lending Club fees

Lending Club kept 6% of my loan as a fee (included in the APR rate from earlier). Every loan at Lending Club is given a grade based on things like the borrower’s salary and credit history. Loans with the highest grade can have a fee of just 1%. Loans with a lower grade have fees closer to 6%.

It can be smart to consider this fee before you apply if you need a specific amount. For example, if you want a loan of exactly $2,500 you might want to request $2,660. A fee of 6% would leave you with exactly $2,500 (2660 x 0.94 = 2500).

Repaying the loan is simple

About 30 days after you receive your money, Lending Club will begin automatically withdrawing payments from the bank account you gave them. These payments will continue every month until the loan is paid back. That said, here are a few things you can do to speed up this process:

Make an extra payment

Pay off the entire loan early

Doing either option is completely free (no fee or penalty), and both will result in you paying less interest overall on your loan.

I paid off my entire loan early, and doing it was really simple. I just (1) logged in to Lending Club’s website, (2) went to the Manage Payments page, and (3) clicked the Pay Off Loan button seen below:

Is Lending Club safe? Is it legit?

It’s normal to wonder if Lending Club is a scam. After all, this is the internet. For those who need proof that they are a legitimate company, here are some articles about them from trustworthy websites:

Lending Club Review: A quality low-interest loan

Lending Club Review of: Reviewed by: Rating: 4 Summary: Trustworthy and fast loan from a great company. APR versus interest rate could be more clear. More Details

Pros

Some of the lowest interest rates in the United States Fast cash, got the money in 3 days Fixed-rate will never go up, even if you miss a payment Checking your rate can’t hurt your credit score (soft credit check) No penalty to make extra payments or to pay off loan early

Cons

Maximum loan is just $40,000 APR versus interest rate can be confusing. Lending Club should only list the APR and not mention the interest rate at all.

There are a lot of junky loan companies out there on the internet, companies that take weeks to get you the money, or that charge you bad interest rates. Lending Club seems like the opposite of these companies:

Need a quality loan? Click the button below to check your rate.