LendingClub is popular among many for the online loans it provides its clients. It is the largest lender in the US, offering over $35 billion to clients since it was started in 2007. It has been the top choice for borrowers with established financial histories and a good background in making payments. However, due to high default rates and entry barriers, Many people are now starting to look for LendingClub alternatives today.
Here’s why LendingClub may not be the solution for you
1. Long wait times
If you are looking for an online loan, chances are that you want it as soon as possible, maybe within 24 hours. That’s why you use a P2P platform and not a bank. LendingClub, however, imposes a 7-day waiting period as the investors decide on approving and backing your loan. This makes them a poor choice for emergency lending.
2. Origination fees
In addition to a long waiting period, LendingClub imposes a somewhat heavy origination fee, which will be part of your interest rate. This fee cuts into your loan amount. You’ll be charged $7 if you repay your loan via check and $15 if your bank account does not have enough money to cover the monthly installments. Late payment charges are 5% of the pending amount or $15, whichever number is larger.
3. Cumbersome application processes
To get a loan from LendingClub, you may have to submit copies of your tax documentation and other details including your:
- Social security number
- Monthly income
- Copies of your government ID
- Pay stubs
- Your bank account.
That’s a lot of personal info to put online. If this makes you uncomfortable, it may be all the more reason to shop around.
The top Lending Club alternatives in 2020
Upstart is a LendingClub alternative that uses an underwriting algorithm to determine your creditworthiness. They assess you using factors like your education level and career path. Their repayment periods range between three and five years and have a turnaround time of one business day.
- Upstart considers education history rather than credit scores, making it accessible for younger, first-time borrowers who may not have built up their credit scores.
- It has a high upper limit for loans ($50,000).
- Upstart charges no early repayment fees.
- Upstart offers a sizable variety of loans with one straightforward application.
- It has a massive origination fee of 8%, which is rolled into the loan
- It charges a high APR of 35.99% compared to other lenders.
If you are a small business with a FICO score of at least 660, then Funding Circle is a Lending Club alternative that you should consider.
- A fast application turnaround-time of three days
- Repayment terms of six months to five years.
- You can access loans anywhere from $25,000-$500,000.
- Origination fees are (3.49–6.99%)
- Late payment penalties of 5% of the missed payments
- An APR range of 11.29–30.12% for borrowers
- Must be an accredited investor to invest
Prosper is another site like Lending Club that you can use if you have a high level of debt but a high income. It is one of the longest-running P2P platforms in the US.
- Prosper accepts borrowers with credit scores of 640 and above and debt-to-income ratios of up to 50%.
- The APR for using Prosper is 6.96–35.99%, which is relatively low.
- You can take a loan of $2000-$40,000 with a repayment range of three to five years.
- Your loan can be processed in as few as three business days.
- Prosper allows borrowers to take out money for medical purposes.
- A hefty origination fee of 2.4–5% of the loan value.
- Borrowers must have at least three open credit accounts.
- Only two fixed-term lengths (three or five years).
SoFi is one of the Lending Club similar sites developed for first-time borrowers. Its low APR rates are targeted specifically for student loan refinancing. On SoFi, borrowers are allowed to take out $5,000-$100,000 at a time in loans. You can repay your loan within three to seven years.
- Cost-effective APRs between 5–15%.
- No origination fee.
- Access to free credit counseling and unemployment protection.
- SoFi has very stringent eligibility requirements for borrowers.
- Relatively low approval rate compared to other lenders.
- It has a higher credit score requirement (660 and above).
- Loans require 7 days of processing time, which is rather long.
NetCredit is another of the reliable Lending Club alternatives that provide unsecured personal loans to borrowers looking to rebuild their credit and up their credit scores.
- No early repayment fees.
- A fast loan turnaround time from application to receiving funds.
- Flexible repayment schedules.
- A low upper limit of only $10,500.
- High borrower interest rates.
- NetCredit is only available in 14 states.
Avant, like other LendingClub similar sites, can deposit funds in your account as soon as the next business day if your application is approved.
- Fast application to loan turnaround time (24 hours).
- Allows borrowers with lower credit scores compared to other lenders (580 and above).
- Avant charges no early repayment fee.
- They report to the three major credit bureaus.
- It is not available in all states.
- Avant’s maximum loan amount varies with your state.
Or you should try Constant, a new form of P2P lending…
While there are quite a few minor differences between the above sites they all sound a bit similar, don’t they? They all require background checks, require long periods of waiting time for funds, and take large cuts of your loan for their own pockets.
If you want a reliable peer to peer lending site that doesn’t do these things, maybe you should consider giving our platform, Constant, a try. Unlike many other peer to peer lenders, we can get you up-and-running with a loan in a couple of hours. That’s because all our loans are backed by collateral. No need for an invasive credit check or looks into your personal information.
To get a loan from Constant, all you need is some cryptocurrency (Ethereum, Bitcoin, etc.) to use as collateral for your loan and a reliable internet connection. If you default, your cryptocurrency will be sold to cover the cost. But you’ll keep the loan amount without any reflection on your credit score and your lender will get their money back. We only charge a 1% origination fee to borrowers and rates on both ends are always between 7–7.5%.
Come give us a try today if you want a Lending Club alternative that lets you obtain loans and invest in them on your terms.