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Lending Club Loans and Investing ReviewInvesting in peer to peer loans

Lending Club is founded on the practice of peer-to-peer lending. Of course, peer to peer lending is simply the loaning of money from one person to another. Getting personal loans online was never this easy. Lending Club oversees the accounts and the investing process, but the important aspect is that Lending Club has diversified the lending process by allowing multiple investors to partially fund multiple loan requests.

Partial funding is the practice of a borrower’s loan being funded by many investors. While this might not impact the borrower in that his or her loan proceeds spend the same regardless of how many people it took to fund the loan, partial funding lowers investment risk by spreading out an investment among many investors.

For instance, if a borrower defaults, one investor isn’t stuck with a $10,000 loss. Although loan default impacts many investors instead of just one, investors are able to choose the amount of a loan they want to carry, and investing small amounts across many borrowers helps reduce the overall risk inherent in any investment vehicle.

Getting started

  1. Only investors residing in approved states may invest.
  2. Potential investors must have minimum net assets. For California residents, the minimum asset requirement is either $85,000 in annual income or $200,000 in net worth. For non-California residents, the minimum asset requirement is either $70,000 in annual income or $250,000 in net worth. For California residents who do not meet their state-defined criteria, investments are limited to $2,500 in notes.
  3. If the first two criteria are met, potential investors may then create an investment account. This involves registering with the website and providing a variety of information for identification purposes.
  4. With the investment account created, investors are then directed to read the “FAQ for New Investors” section. Such material is highly recommended as it provides information on polices as well as strategies of note selection, investment yield tracking, and investment exiting.

Lending Club Loans and Investing Review

Note Selection

The core aspect of Lending Club is lending money to borrowers. Pre-screened borrowers create profiles that not only indicate how much loan proceeds they are seeking but also the reason behind seeking the funds. For instance, Lending Club has detailed charts on the primary uses of borrowed funds, and the top two uses are refinancing high-interest debit and paying off credit card debt.

Such information is important as people interested in consolidating debt and paying off credit cards are typically attempting to improve their financial standing and increase their credit scores. Such borrowers represent a lower risk than, say, someone interested in developing an invention or someone about to launch a high-risk business.

Manual Investing

Lending to borrowers occurs through manual or automatic investing. Manual investing is pretty much exactly how it sounds. Investors manually screen borrowers and fund those that seem particularly promising. Investors interested in manual investing are directed to consider such credit cornerstones as debt-to-income ratio and recent credit score.

Via manual investing, investors carefully consider each note and build his or her investment portfolio one note at a time. Perusing profiles and screening short-listed borrowers take time, but manual investing allows new investors the most control over the investment process.

Automatic investing

For seasoned investors, automatic investing with online brokers offers the ability to set pre-defined criteria and allow Lending Club’s investment software to make investments as matching notes are found. Because of the level of control the software maintains and the detailed criteria for making investments, automatic investing provides a great deal of security while freeing the investor from the responsibility of screening hundreds of potential borrowers. However, automatic investing does not allow investors to experience the personal satisfaction gained from selecting borrowers based on need.

For instance, two potential notes might be relatively equal from an accounting perspective. Credit scores might be high. Previous paid loans might exist, reflecting a proven ability and willingness to pay. Debt-to-income ratio for both loans might be similar. However, with manual borrowing, investors have the ability to review borrower profiles and connect with the actual people requesting loans.

In fact, this is the secret behind peer-to-peer lending: average people making loans to other average people, helping one another out without the need for traditional bank loans. Although automatic investing might help investors maximize their time, one of the secrets behind Lending Club’s massive success might just be the time investors take to connect with borrowers.


Information privacy is an important feature for any investor. Three measures of protection include the following.

First, to ensure investor information is kept safe, Lending Club complies with standards established by federal law.

Second, Lending Club commits to meet or exceed industry standard information privacy protocols.

Third, and perhaps most important, Lending Club has implemented proprietary processes and technology to ensure investor privacy and protect against identity theft.

However, informational safeguards wouldn’t mean much if they weren’t also accompanied by measures to ensure financial security. Lending Club’s financial protections include the following four procedures.

1 All cash balances (non-invested funds) are FDIC insurance.

2 Backup and successor agreements to help protect against company insolvency. Should Lending Club go bankrupt, these agreements allow loans to be managed by third parties.

3 Multiple administrative and legal processes exist to limit or manage delinquent borrowers.

4 Multiple educational documents exist to help educate investors on not only the best practices of peer-to-peer lending but also on how to plan for and minimize inherent risks. An example of this is that over the last several years, Lending Club has recommended dividing investments between 100 or more borrower accounts to minimize risk.


As with any type of investment, risk exists. The primary risk is borrower delinquency. Borrower delinquency is proactively protected against by ensuring borrowers meet a minimum credit rating of 640. Currently, the average borrower credit rating ranges between a much more favorable 699 and 740.

Nevertheless, borrower default occurs. Currently, default rates hover at an eight-year average of 5 percent.

Lending Club Loans and Investing Review

Performance history: company

Peer-to-peer lending has existed online for at least a decade. Lending Club in particular has been in operation since 2007 when it started as a Facebook app and received over ten million dollars in funding.

Since that auspicious beginning, it has gone on to become the largest peer-to-peer lending company, having originated more than 15 billion dollars in loans. Registered with the SEC, Lending Club stock (LC) is available through the New York Stock Exchange.

Performance history: investors

Company performance might instill confidence by indicating strength and reliability, but it means nothing if investor performance is not equally strong and reliable.

Currently, investor return over an eight-year period is at five percent. While this is not as high, perhaps, as the stock market, it’s over twice the two-percent return an investor will get from merely putting the money into a savings account.

A personal reminder

As an alternative to other types of investing, I have found that Lending Club offers a steady year-to-year return, but it does take work. That said, the type of work involved is no different than the type involved in, say, stock investing.

With stocks, investors must evaluate each company and all the accompanying financial indicators associated with each company’s annual performance.

Rather than think Lending Club requires hands-on screening, it is more accurate to remember that due diligence is required in any type of investing. Additionally, in the same manner that financial advisers can manage a portfolio by making automatic investments on a monthly basis, Lending Cub offers automatic investing based on pre-selected criteria.

Such due diligence is the only process through which an investor might reduce overall risk, but it is also the way in which an investor can help out people while maximizing return. For instance, through the borrower screening process, investors are able to review each borrower’s credit rating.

By browsing and selecting borrowers with lower credit scores offset by a more solid profile, investors can potentially help others establish a more secure financial footing while capitalizing on the higher interest rate offered by the higher loan risk while remembering that the minimum credit rating set by Lending Club is 640.

In context of the profiles throughout the site, 640 might be low, but overall, in context of society at large, 640 represents a fair credit rating indicative of someone attempting to maintain or improve his or her credit.

By definition, the borrowers are earnestly attempting to improve their credit and by and large seem to want to pay the loans back. It is through the manual investment process that I have been able to manage a 6.26 % return over two years. Such a return might not be double digits, but it is the results of a fun, reliable, and for me, personally rewarding method of investing.

That said, with any investment, risk exists. However, by doing the appropriate research and spreading out the investment among as many people as possible, I have been able to limit my losses while beating the overall Lending Club average.

You can, too.

For loan alternatives, you can try Self Lender as they also provide personal loans online. 


General Lending Club Questions

This section covers general questions about Lending Club that investors and borrowers might ask. Use this information to learn more about this peer-to-peer lending network.

What Is Lending Club?

Lending Club is a peer-to-peer lending platform that connects investors with borrowers that need loans. The lenders make money on the loan payments through interest and the borrowers get a quality loan at good rates.

Is Lending Club Legit?

Yes, Lending Club is a legit lender and investment opportunity. It’s been in operation for more than 12 years and was one of the first peer-to-peer lending platforms.

Is Lending Club Safe?

Yes, Lending Club uses bank-level encryption software to secure your information. Investors get to manage their own risk – higher levels of risk lead to bigger rewards. This lets them use an investment strategy that matches their needs.

How Does Lending Club Work?

Lending Club works by pooling money from investors according to those investors guidelines. It then uses that money to give out loans. The loan repayments and interest are returned to the lender as profit.

Where Is Lending Club Located?

Lending Club is based in San Francisco, CA. It’s current CEO is Scott Sanborn. The company was founded in 2006 and is publicly traded.

Are Lending Club Loans Safe?

Borrowers are safe when it comes to Lending Club loans. Investors get to choose their own risk levels when investing in Lending Club, so they have control over the safety of their investments.

Who Owns Lending Club?

Lending Club is a publicly traded company on the New York Stock Exchange. They trade under the symbol of LC and brought in $574.5 million in 2017.

Lending Club Questions for Investor

This group of section covers the questions that investors might have. Use these sections if you’re thinking about investing in Lending Club.

General Questions for Lending Club Investments

This section covers general questions that investors might have about Lending Club. Use this information to get a good basis for more advanced Lending Club investment questions.

How Is Lending Club Doing?

Lending Club is doing fairly well. Their revenues have been up for the past two years. Their stock price has settled at around $3 per share, stabilizing after a decline.

How Does Lending Club Determine Loan Grade?

Lending Club has a base rate they start with. Then they assign a Loan Grade based on an applicant’s FICO score. Finally, they look at the loan amount and other risk modifiers.

Can Lending Club be Trusted?

Yes, Investors can limit what Loan Grades they’re willing to invest in. That means different lenders can set their own level of risk. Lending Club won’t use your money for loans outside your parameters. It is considered one of the best short term investments.

Are Lending Tree and Lending Club the Same?

No, Lending Club and Lending Tree are different companies. They use a similar business model, but they are distinct entities.

Investing in Lending Club

This section covers questions about investing in Lending Club. Use this section to find out how to invest with the company and how investments with Lending Club work.

Is Lending Club a Good Investment?

That depends on what you’re looking for. Many investors like the fact that they can control the level of risk by assigning their investment to be used for different grades of loan.

How to Invest in Lending Club?

It’s easy to invest in Lending Club. You just need to go to their website and create an investment account. From there, the site will give you directions on how to make your investment.

How Lending Club Investing Works?

Lending Club investing works in a very simple way. You deposit money with Lending Club and outline the ways your money can be used. Lending Club adds that money to a pool and uses that pool to distribute loans. You get paid returns on the interest for loans when someone makes their loan payment. This is strictly an investment in loans and not real estate like some think. If you're looking for a way to invest in real estate then check out our Peerstreet review.

How to Invest Money in Lending Club?

You can invest money in Lending Club by creating an investment account with them. Once you create an account, the site will walk you through the process of setting up your investments. If you find the returns aren't appealing then you can check other types of investments such as high yield money market accounts or crowdfunding real estate investments.

How to Become an Investor in Lending Club?

You can become an investor in Lending Club in a few simple steps. All you need to do is create an investment account with them. After that, follow the directions to set up your account.

When Does Lending Club Post New Loans?

Lending Club posts new loans four times a day. The loans are posted at 6AM, 10AM, 2PM and 6PM Pacific time. This is changed from their previous schedule to more closely match a standard business day.

Lending Club Investor Accounts

This section answers questions about Lending Club investor accounts, including how the account works and how to get your money out of Lending Club.

How Much Money Can You Make with Lending Club?

That depends on several factors. The amount you invest and the type of loans you’re willing to invest in will all shape the amount of money you generate.

How to Withdraw Money from Lending Club?

All you need to do to withdraw money from Lending Club is go to your account and click on the transfer section. Click on Withdraw Funds. The transfer will post to your account at the end of 4 full business days.

How to Liquidate Lending Club Account?

There are three steps to liquidating a Lending Club account. First, request the return of any outstanding principal. Second, transfer the cash into a connected bank account. Finally, call Lending Club and request that the account is closed.

Can You Make Money on Lending Club?

You can. You can pick what loans you want to invest in. You’ll earn a return on your investment in the form of the interest rates on the loans you invest in.

How to Close Lending Club Account?

You can close your Lending Club account by calling them and asking that the account is closed. Be sure you withdraw any remaining principal from your account before you close it.

How to Withdraw from Lending Club?

You can withdraw money from Lending Club by selecting Withdraw Money from the transfer section of your account page. You can choose an electronic deposit or a check.

Lending Club Questions for Borrowers

These sections cover the questions that Borrowers might have for Lending Club. Use this information to see if a loan from Lending Club is right for you.

General Lending Club Borrower Questions

This section covers general questions borrowers will want to know before they get a loan from Lending Club.

Is Lending Club Safe for Borrowers?

Yes, Lending Club is safe for borrowers. They abide by all rules and regulations that govern US lending practices and have clearly stated terms and conditions for their loans.

How Long to Get Loan from Lending Club?

It usually takes about 7 days to go from application to funding. Sometimes it may take a bit longer. Once your loan is approved, you’ll get funds electronically deposited into your account.

Can You Refinance Your Lending Club Loan?

You can refinance a Lending Club loan with a new loan. This works out the same way, as there’s no pre-payment penalty for Lending Club loans.

Will Lending Club Settle?

Maybe? This depends on your particular situation. You’ll need to talk to a lawyer or debt expert to get more information on your specific situation.

Should I Use Lending Club?

Maybe, if you want a peer-to-peer loan and have been having issues getting approval from traditional lenders, then Lending Club might be an excellent option for you.

Does Lending Club do Mortgages?

Yes, Lending Club offers mortgages. They have variable-rate mortgages and other financial products that might meet your need.

Is Lending Club a Good Way to Borrow Money?

It can be. If you’re looking for a personal loan, then it’s worth applying at Lending Club. You might have a better chance of getting approval than you’d get from traditional lenders.

Lending Club Requirements

This section covers the list of requirements that Lending Clubs have for their loans. Use this section to see if you can qualify for Lending Club loans.

How Does Lending Club Verify Income?

Lending Club verifies income by reviewing the documents provided in the application. This can include paystubs, bank statements, and other documentation.

How Many Lending Club Loans Can I Have?

Lending Club limits borrowers to two active loans at the same time. They’ll send you an invitation if you qualify for a second loan offer.

What Is the Minimum Credit Score for Lending Club?

The minimum credit score required for a Lending Club loan is 640, but the average Lending Club borrower has a credit score of around 700.

Does Lending Club Verify Employment?

Yes. Lending Club uses things like pay stubs, bank statements, and other documentation you provide to verify your income is what you listed on your application.

Does Lending Club do a Hard Inquiry?

No, Lending Club does a soft inquiry to understand your credit scores. That means a Lending Club application won’t affect your credit score negatively.

Who Does Lending Club Pull?

There’s no public information regarding what credit agency Lending Club checks. Most lending operations check multiple credit reporting agencies at different times.

Does Lending Club Call Your Employer?

Sometimes they can. The first option for checking your employment is to send an email to your work email address. However, if you don’t want to provide your work email or don’t have one, then they’ll use other ways to check your employment.

How Long Does Final Review Take Lending Club?

It depends on several factors. Typically, the entire process from application to funding takes about 7 days. Some loans take a little longer.

Which Credit Bureau Does Lending Club Use?

There’s no public information regarding which credit bureau Lending Club uses. Lending companies don’t usually post this information, so it’s not unusual. They may pull reports from multiple agencies at different times.

Lending Club Approval

This section answers your questions about Lending Club approval. We’ll explain what happens once you get approved by Lending Club for a Loan

How Long Does Lending Club Take to Deposit Money?

Once you’re approved, Lending Club will deposit money within 24 hours in most cases. However, you’ll need to talk to them to see if there’s something different in your cause. The date and time of your approval can affect your funding time.

How Long Does Lending Club Take to Fund?

From application to funding, the processes usually takes about 7 days. Once you’re approved, the funds will be transferred to your account within 24 hours in most cases.

How Long Does Lending Club Take to Review Documents?

That depends on several factors. The best information we have is that the entire loan process from application to funding usually takes around 7 days. Sometimes the process will take a bit longer.

Why Is Lending Club Taking so Long?

There are a few reasons Lending Club might be taking so long. They might be having issues verifying your employment or income. They also might not have investors willing to fund your loan at the moment.

Lending Club Loan Payments

This section covers payments for Lending Club loans. Use this information to understand the Lending Club payment process.

What Happens if You Can’t Pay Lending Club Loan?

It depends on your situation. You’ll usually face a late fee at the least. If your loan isn’t paid for 120 or more days, then it may be charged off and sold to a third party.

Will Lending Club Sue Me?

We couldn’t find any records of Lending Club suing someone. Usually they just charge off seriously delinquent loans and sell them to a third party.

What Happens if You Default on a Lending Club Loan?

Usually Lending Club will charge off a defaulted loan. That means they’ll sell it to a third party for collections purposes. You’ll then own the third-party the balance of your loan.

Can You Pay Off Lending Club Loans Early?

Yes, there’s no early payment penalty on a Lending Club loan. In fact, many people take out a new loan from Lending Club at a lower interest rate to repay their current loan.

Other Lending Club Questions

This section covers Lending Club questions that don’t fit into our other sections. Use this section if you can’t find your question elsewhere.

Is the Lending Club a Good Idea for Debt Consolidation?

Many people use Lending Club for debt consolidation. That’s particularly true if they’re trying to consolidate credit card debt, as most people see a credit score increase when they consolidate credit cards with Lending Club.

Do Lending Club Loans Go on Your Credit Report?

Yes. Loans from Lending Club will appear on your credit report. However, Lending Club does not use a hard inquiry when evaluating applications for loans, so that won’t be on your report.

Your Title Goes HereDoes Lending Club Work on Weekends?

Lending Club does not issue loans on weekends but they do post loans for investors to review on weekends. Therefore, you won’t get paid on a weekend but your loan can still advance.