Looking for a review of Lending Club? Here’s my personal and first hand experience of getting a loan through LendingClub.com:

Have you ever really looked at your credit card interest rates? Some people do some people don’t.  I was one of the “don’t” folks for the most part (I know, scold me – I know). However, recently I noticed that my American Express bill just seemed off. Normally, I would just glance at the bill, make the payment, and shred it. When I actually looked at the bill I noticed only a small portion went towards the principal (shocker I know)…

Why was so much going to the interest and not the principle you may ask? Well, my interest rate was 27%….oh my!!  27%!!!!!

Credit Card Interest

Since I have good credit I immediately felt that this interest rate was out of line with what it should be.  Given that, I made the decision to “refinance” my credit card debt on that card and I began my search.  That ultimately led me to the world of peer-to-peer or “P2P” lending.

What Is Peer To Peer Lending?

This is a relatively new form of lending where you are not actually borrowing from a traditional bank or lender. Instead, you are “borrowing” from a group of your peers. For example, let’s say your wanted a loan of $1,000.  Through sites like Prosper.com and LendingClub.com investors would make micro-investments in your loan of any amount they wanted.  So, your $1,000 loan would be funded by as many as 20 investors at $50.00 each (or more). The loan is handled by the peer-to-peer lender of your choice and interest is paid to the investor. As an example, if your loan interest rate were 10%, they might offer an 8% interest rate to the investor who funded your loan and they keep the 2% as profit. Keep in mind these numbers are just examples so that you can understand the principle of how these services work. Mistakenly, I thought that peer-to-peer lending wasn’t a big industry – that is, until I found out that have funded almost 6 billion dollars in loans since 2005. This industry is legit…

What Companies Offer Peer To Peer Loans?

The major players in the consumer debt space are Prosper.com and LendingClub.com. There are also other companies such as SoFi which offers loans for student loan consolidation, as well Funding Circle which targets the small business borrower.

How To Apply For A P2P Loan

Since this type of loan was very new to me I tried my best to do a lot of research. Since I wanted to consolidate my American Express credit card, I narrowed my research between Prosper and Lending Club.  For whatever reason, I decided to get a loan quote from Prosper – this didn’t go well.  I tried several times to access their website and create an account, only to get an error each and every time.  I moved on decided to sign up for a loan quote from LendingClub.com.  Their account creation process went on without a hitch. I entered my basic data and some other minimal personal information, and made a request for a $7,200.00 loan quote.  Within minutes their system said I qualified and was eligible for an interest rate of 7.75%.   Wow – this was almost 20 percentage points lower than my American Express card I was wanting to pay off!  I immediately clicked that I would accept a loan in that amount and for those terms and I instantly received the following email:

The LendingClub Loan Process

When I submitted my application I received an email from LendingClub.com that I needed to confirm my email address – simple enough and with a click of a button I was confirmed.

I also received a separate email from them that I would need to be on the lookout for a debit and a credit in my bank account:

Email from Lending Club that I needed to confirm my bank account

This is used to confirm that the bank information you have submitted is accurate. Exactly 48 hours after I submitted my application I received a debit and a credit for 98 cents in my chosen bank account. I signed into my Lending Club account and confirmed that I had received their deposit and debit and clicked OK.

Several days went by and I hadn’t received any additional emails and no phone calls yet…

After logging into my LendingClub account I saw a notice that someone would be calling me at the phone number I provided.  Odd, why didn’t they email this information?

There was a phone number on the notice so I actually called them. I spoke to a customer service person who verified my application and my phone number. Very quick and easy. I actually thought it would be more of a formal loan underwriting process where I would need to supply W-2’s other other documentation but this wasn’t the case. The customer service person stated that they had all of the required information and that I would hear from them soon.

A few days later I got this email:

Loan approval email from LendingClub.com


Wow! Very cool indeed!!

Within 72 hours of receiving the above email I had $7,056 deposited into my checking account.  Oh wait a minute, but you might remember my loan amount was $7,200.00 right?

Fees For A LendingClub.com Loan

In addition to the interest rate that you will be charged, you are also charged a processing fee against your loan.  In my case, they charged $144.00 fee against my $7,200.00 loan leaving a balance of $7,056.00.  I still think that in my situation this is a very good deal. Keep in mind the loan that I paid off had an interest rate of 27% and this one is almost 20 points lower. So, I save approximately $100.00 a month in interest alone.  I will gladly pay their fee to save money so for me it was not a problem at all.

Summary and Review Of My Lending Club Experience

What surprised me most about this whole process was just how easy it was to get a loan through Lending Club. Yes, I have good credit, however, I really didn’t have to provide much in the way of documentation. Actually, I didn’t have to provide ANY documentation. I just filled out the online application, had a phone call from a customer service person verifying that information, and confirmed a few emails. The whole process took 8 days start to finish. For me, this all couldn’t have worked out better. I’m now saving money month in and month out on an outrageous interest rate and I just couldn’t be happier. So in the end, my review of the Lending Club is a completely positive one.

Have you ever applied for a peer to peer loan? If so what was your experience? If not, and if you have high interest credit cards or other debt, you might just want to!


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