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Lending Club Review – Peer to Peer Lending

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Lending Club Review – Peer to Peer Lending

Whether you’ve been searching for a personal or a small business loan, you most likely encountered Lending Club somewhere on the web. They are simply an online peer to peer lending site, where the funds are backed up from everyday investors versus loaning from a traditional bank.

Peer to Peer lending is an industry that matches people who have money with people who need to borrow money. The people who need money pay interest to the people who provide the loans. The interest rate borrowers pay corresponds with their credit history. The better the credit history, the better the rates you can receive.

Lending Club Loan Details  
Minimum/Maximum Loan Amount:$5,000 - $300,000Minimum Business Age Required:2 years
APR:5.9% - 25.9%Minimum Annual Revenue Required:$75,000
Terms Available:12 - 60 monthsOwner's Credit Rating:660+
Origination Fee:0.99% - 6.99%

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Do you qualify for peer to peer lending?

To qualify for a small business loan from Lending Club, your business must be at least two years old, earn at least $75,000 in annual revenue and have no recent bankruptcies or tax liens. The applicant must own at least 20% of the business and have fair or better personal credit. A business plan or projection will not be required but Lending Club will perform a “soft” inquiry on your credit file (will not affect your credit) and look at your past tax returns and bank statements to determine if you qualify. A minimum FICO score of 660, is also needed to qualify.

For small businesses with partnerships, only one applicant can apply for the business loan. However, if a member has a better chance to qualify for a lower rate, then they can submit an application instead. If your business does not qualify, you can try applying for start up capital for business purposes with a personal loan from Lending Club

Please note that Lending Club cannot disburse loans for businesses in Iowa, Idaho, Maine, North Dakota or Rhode Island.

Types of Loans Available

Lending Club offers a generous amount up to $300,000 and as low as $5,000 to small business owners of all kinds, from retailers to rental shops. A business loan can be use for many reasons, primarily used to expansion, buying inventory, working capital, purchasing equipment, refinancing and more. However,  the loan can not be used for financial investing, gambling, adult related business or illegal activities.

The loans are fixed rate with an APR range of 5.9% – 25.9%, depending on the business and individual’s finances. They take a look at the business and owner’s credit history, along with the length and amount of loan you have requested.

Loans that are under $100,00 are unsecured loans (does not require any collateral for obtain the loan). Loans that are above $100,000 will require a UCC Lien, which covers liquid assets, inventory, cash and accounts receivable. It will not cover anything unrelated to your business such as your personal property (Real estate, home, car)

PROSCONS
Much lower APR average at 8%-32% (includes a 1%-5% origination fee)Collateral required for loans over $100,000
Can borrow up to $300,000 if qualifiedPersonal guarantee required
Flexible terms, from one to five yearsSeveral days to find out what loans are available to you
Excellent customer support with weekend hoursBusiness must have at least $75,000 in annual revenue (higher than many) and have been in business for two years (longest period of time we reviewed)
Same day approvalNo website resources for small business owners

Application

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Lending Club’s loan application process is quick and simple, and you can request a quote without harming your credit. The application asks for basic information about your business, including its name, address, ownership, the number of employees, legal structure and your financial information. If you are pre-qualified at the end of the application, you will be presented with multiple loan offers. Once you accept the offer that fits your needs, you will be asked to submit a list of documents before it can be approved and deposited into your bank account.

 

 

 

Fees/Payment

Lending Club, peer to peer lending, charges an origination fee of 0.99% to 5.99% of the total loan amount, which is based on your credit and other factors. This fee will be taken from your loan proceedings before the amount is disbursed to you, so understand that amount that will deposited into your account with this origination fee deducted.

Repayment terms are from one to five years (12 to 60 months) depending on the loan term selected and there are no penalties for late or early payments. If you can plan on paying extra each month, this will help reduce the overall cost of your total loan. Payments are automatically deducted from your bank account, so you don’t have to worry about scheduling payments on time. Also, payment dates can also be adjusted through the website or simply by contacting them directly. Lending Club also sends a courtesy payment reminder to help assure you are ready by the payment date.

If you are late on a payment or your payment should fail due to circumstances such as an overdrawn bank account, Lending Club may charge a fee. The grace period for late payments is 15 days, and depending on how late your payment is, the service may report it to credit bureaus or even put your account in collections. If you are having trouble making a payment due to financial hardship or other circumstances, you can contact Lending Club to discuss your options, including the ability to move your payment date up or back by up to 15 days.

Lending Club; Ready to apply?

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financetip
Kim Lee is a UNLV graduate with a degree in Biotechnology. He has natural attraction toward technology, with a passion of servicing and helping people. Finance has always been his main interest and hobby, as he likes to dwell into small business and investing ventures. He writes and shares what he learns on the way, while he tackles on a life as an entrepreneur.

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