With online institutions like Lending Club, a personal loan can now be approved and funded within minutes. And because they don’t have to support brick-and-mortar locations, they can afford to offer larger loans at lower interest rates.
But Lending Club isn’t the only company offering this kind of service. There are many alternatives to Lending Club for both personal loans and other online banking/lending services. Let’s take a look at how Lending Club stacks up against several of its competitors to determine which offers the best products and services.
Who is Lending Club
Lending Club offers a lending marketplace where borrowers’ loans are purchased by institutional investors. This allows Lending Club to offer a wide variety of loans with competitive rates. They’ve been in business since 2007 and currently have a 4.57/5 rating on the Better Business Bureau website.
That said, in July of 2021, Lending Club settled a lawsuit with the FTC, which filed the lawsuit over a lack of transparency on loan origination fees and false approval guarantees.
What Services Do They Provide?
The primary service Lending Club offers is loans.
| Personal Loans | Business Loans | SBA Loans | |
|---|---|---|---|
| Loan amount | $1,000 – $40,000 | $5,000 – $500,000 | Up to $5 million |
| Repayment terms | 2 – 5 years | 1 – 5 years | Up to 25 years |
| APR | 9.57% – 35.99% | 5.99% and up | undisclosed |
| Fees | Origination fee of 2% – 6% of loan value | Origination fees | Guaranty fee, annual service fee, and prepayment penalties. |
| Requirements | Decent credit or a co-borrower | 1 year in business with $50,000 in annual sales | FICO credit score of 660 |
Lending Club is a preferred Small Business Administration (SBA) lender.
In addition to their personal and business loans, Lending Club offers a variety of other services, including :
- Personal banking accounts
- Business banking accounts
- Auto refinance loan matching service
- Patient Solutions – a loan program offered through your medical provider
👉 Note: Prior to 2021, Lending Club offered a peer-to-peer lending marketplace. This marketplace let individuals invest in the loans Lending club offered.
I.E., you could invest $200 in another person’s $10,000 loan and earn your money back plus interest as the loan was paid off.
Lending Club suspended this open marketplace at the end of 2020.
Who is Lending Club Best for?
Those who would benefit the most from a relationship with Lending Club include:
- Individuals with good credit
- Those willing to add a co-borrower
- Big businesses looking for high-dollar loans
- An individual who wants their loan and checking account in the same place
Lending Club is not going to be a good choice for those looking for high-value personal loans, those with poor credit, or those with brand new businesses.
Best Lending Club Alternatives
Considering this, let’s take a look at 4 of Lending Club’s top competitors.
- Upstart – Best for Poor Credit
- One Main Financial – Best for Customer Service
- Sofi – Best for Range of Lending/Banking Products
- Prosper – Best for Peer-to-Peer Lending
When choosing Lending Club’s alternatives, we looked at competitors that offered a similar set of products and/or beat out Lending Club in at least one area, i.e., personal loans for low-credit individuals.
While we focus on lenders that provide personal loans, we will also look at the other products and services they offer and use a uniform set of criteria to compare those products, such as interest rates and repayment terms.
🏆 Best for Poor Credit
1. Upstart
Self-proclaimed as one of the first AI lending marketplaces, Upstart claims to be able to approve loans with less default risk for their partner banks. This allows them to offer loans with competitive interest rates to a wider range of customers (poor credit, no credit).
💸 Pricing & Features
Upstart offers 3 different kinds of loans: personal loans, auto refinance loans, and business loans.
| Personal | Auto Refi | Business | |
|---|---|---|---|
| Loan range | $1000 – $50,000 | $9,000 – $60,000 | $5,000 – $200,000 |
| Repayment terms | 36 months or 60 months | 24 – 84 months | Minimum 12 months |
| APR rates | 6.40% – 35.99% | undisclosed | undisclosed |
| Fees | Origination fee possible | No fees | Origination fee |
On personal loans and auto refis, Upstart supports numerous credit and income situations. Their minimum credit score requirement is 300, and they can sometimes approve you when you don’t have a credit score. Plus, even those who are self-employed can apply for a loan.
A low minimum credit score doesn’t mean everyone gets approved. Your approval and APR will be based on your banking history and other alternative data.
For their business loans, your business will need to have been in existence for at least 1 year, and you’ll need to personally guarantee the loan. That means you are personally liable for the loan if the business can’t pay it back.
👉 How do they compare to Lending Club?
When compared to Lending Club, there are few areas where Upstart excels. This includes :
- Lower interest rates on personal loans
- Higher loan amounts for personal loans
- Better approval odds for those with poor credit
- Auto refi options
When it comes to business loans, however, Lending Club beats out Upstart with more loan options and higher loan values.
🏆 Best for Customer Service
2. One Main Financial
One Main Financial is a lender with more than 1400 brick-and-mortar locations nationwide.
This institution has one primary focus, issuing personal loans that aren’t strictly dependent on your credit score.
⚠️ Warning: It is worth noting that the BBB has posted an alert on their page to warn customers of recent attempts of scammers posing as One Main Finacial and stealing money from people’s accounts.
💸 Pricing & Features
One Main Financial offers two types of credit products: personal loans and credit cards.
| Personal Loans | BrightWay credit card | BrightWay+ credit card | |
|---|---|---|---|
| Loan value/credit limit | $1,500 – $20,000 | Up to $3000 | Up to $3000 |
| Repayment terms | 24 – 60 Months | — | — |
| APR | 18.00% – 35.99% | Up to 35.99% | Up to 35.99% |
| Fees | Origination fee (flat fee or percentage of loan value) | Up to $75 annual fee | $0 |
The personal loans offered by One Main Financial can be used for a variety of reasons, including debt consolidation, home improvements, and even vehicle purchases.
One Main Financial offers two credit cards designed to help you build credit. The cards earn 1% cash back on all purchases and allow you to increase your credit limit or decrease your APR after each 6-month period of on-time payments.
👉 How do they compare to Lending Club?
The key area where One Main Financial beats out Lending Club is their service to those with poor credit:
- Loans are offered to those with poor credit
- Credit cards are available for those wanting to improve their credit
Plus, having brick-and-mortar branches means a greater degree of customer service, which is reflected in their overwhelmingly positive reviews.
The downside is that One Main Financial has much higher interest rates and lower loan values when compared to Lending Club.
🏆 Best for Range of Lending/Banking Products
3. Sofi
Back in 2012, Sofi started out offering student loan refinancing and has since grown to offer a wide variety of services, including loans, mortgages, and investment accounts.
A self-proclaimed one-stop shop for all your financial needs, Sofi has over 4 million members.
💸 Pricing & Features
Sofi offers a wide range of loan and refinancing options, including personal loans, student loans, and mortgages.
| Personal Loans | Student Loans | Mortgage | |
|---|---|---|---|
| Loan Amount | $5,000 – $100,000 | $1,000 and up (no max) | $100,000 and up |
| Repayment Terms | 24 – 84 months | 5, 7, 10, or 15 years | 10, 15, 20, or 30 years |
| APR | 8.99% – 25.81% | 4.90% to 14.5% | 5.87% and up |
| Fees | No fees | No fees | Lender fee and 3% minimum downpayment |
In addition to the loans detailed above, Sofi offers the following products and services:
- Student loan refi
- Auto loan refi matching service
- Bank accounts
- Business loan matching service
- Investment accounts
- Credit card
- Insurance matching service
- Crypto trading
👉 How do they compare to Lending Club?
Sofi beats out Lending Club with:
- A wider range of products and services
- Higher value personal loans
- More flexible repayment terms
- Fewer loan fees
Unfortunately, Sofi does not offer small business loans as Lending Club does. Instead, they offer a business loan matching service.
🏆 Best for Peer-to-Peer Lending
4. Prosper
Prosper is an online lender offering a variety of loans and credit lines. Founded in 2005, they have lent out more than $21 billion.
Prosper is also one of the last peer-to-peer lending marketplaces open to individual investors. This investment platform allows their loans to be funded by regular people instead of just big banks.
💸 Pricing & Features
Prosper offers 3 types of credit: personal loans, home equity lines of credit (HELOC), and a credit card.
| Personal Loans | Home Equity Line of Credit | Credit Card | |
|---|---|---|---|
| Loan Amount/ credit limit | $2,000 – $50,000 | $50,000 – $500,000 or 90% of your home’s value | $500 – $3000 |
| Repayment Terms | 24 – 60 months | 10 years | — |
| APR | Up to 35.99% | Starting at 8.40% | 24.24% – 35.24% |
| Fees | Origination fee of 1% – 5% | Closing costs | $39 annual fee |
In addition to its lending products, Prosper offers peer-to-peer investing. This program allows individuals to purchase portions of a borrower’s loan. For instance, if someone borrows $10,000, you could purchase a $200 portion.
As the borrower pays back the loan, you receive a portion of the payment. So long as the borrower pays back the full loan, you will receive back your investment plus a portion of the interest charges.
Investors can start with as little as $25 and invest in multiple loans at one time.
☝️ Note: This investment option is currently only available in 30 states.
👉 How do they compare to Lending Club?
Prosper offers personal loans with similar interest rates and credit requirements as Lending Club.
Where Prosper excels is with its peer-to-peer investing marketplace, a service Lending Club closed to individual investors in 2020.
However, if you are looking for business loans, you’ll want to stick with Lending Club.
Compare Lending Club Alternatives
| Company | Products/Services | Loan Maximums | APRs & Fees | Reviews |
|---|---|---|---|---|
| Lending Club | Personal loans, business loans, and medical loans partnership | $40,000 on personal loans $65,000 on medical loans $5milllion on business loans | 9.57% to 35.99% personal 5.99% + business 3.99% to 30.99% medical | 4.6/5 BBB |
| Upstart | Personal loans, business loans & auto refi | $50,000 for personal loans $200,000 for business loans | 6.40% to 35.99% personal undisclosed for business and auto refi | 1.2/5 BBB |
| One Main Financial | Personal loans | $20,000 | 18.00% – 35.99% | 2.8/5 BBB |
| Sofi | Student loans, personal loans, mortgages, and loan matching service | $100,000 for personal loans no maximum on student loans | 8.99% – 25.81% personal 2.99% student 5.372% mortgage | 1.2/5 BBB |
| Prosper | Personal Loans, HELOC & P2P Lending | $50,000 | 8.40% HELOC Up to 35.99% personal | 1/5 BBB |
Which One Should You Choose?
When searching for alternatives to Lending Club, it’s important to keep in mind why Lending Club is not a good fit for your needs.
Do you need a personal loan but have poor credit? Then Upstart or another lender might be a better choice.
Do you want in-person service on your loan? Then One Main Financial might be a better choice.
We can’t tell you which lender is the best. But, by evaluating Lending Club and its alternatives, we can help you decide which is the best lender for you.
