The Lending Club is a peer-to-peer lending and investment company. People join to get loans at a reasonable rate. Others join so that they may invest their money. The borrowers are vetted by the Lending Club systems, and if they are eligible, then they may apply for loans of different sizes. The borrower may have to pay a higher rate if he or she has a poor credit rating.
The investor may wish to fund loans with a higher interest rate because it is he or she may earn more money that way without a big risk. Here is how Lending Club may help you get a loan and how the Lending Club system works.
Check Your Rate On Their Website
On the lending club website, you are able to apply for loans very swiftly. The first step is checking the rate they are willing to give you. There are plenty of rate options, but you may not be eligible for their best rates because of your employment status, your income, or because of your credit rating.
Check your rate by clicking the links or the buttons on their website. The Lending Club form will ask you for your name, your address, your date of birth, your email address, your password, your income and your additional income.
Despite the fact that the rate form asks you to sign it to allow them to run a “Credit profile authorization,” the “Get Your Rate” button also says that it will not affect your credit score, which means the search they conduct is a soft one.
Click the button and you will receive a message saying if you have qualified for the personal loan you were hoping for.
Did You Qualify?
If you didn’t qualify, then there is little more you can do. If you did, then you will see a screen that tells you your loan amount, it will tell you your monthly payment amount, and how many payments you will have to make. It also shows you your interest rate and your APR.
If you are happy with the interest rate you have, and the APR rate you have been given, then click the “Get Loan” button to continue. If you are not happy, then you should leave the page and try another day. You may have more luck another day after your credit rating has improved a little more.
If you would like a larger loan, then you may have larger-loan options appear on the loan approval page. They may show you larger loans you may take out. The larger loans may have different conditions, such as longer repayment periods and different interest rates.
Give Them Your Personal Details
If you decide to go ahead, then you need to give them all your details, so they may process your loan. They are going to check to see if everything you have written is true, so be careful if you are thinking of telling a few lies here and there.
They are going to want to know your home phone number, things about your mortgage, your job, how long you have lived at your current address, your work phone number, and your social security number. Enter all the mandatory entries and click the next button.
Read Your Loan Terms And Conditions
Try to at least skim read through most of it. There is nothing on there that is alarming in an obvious way, but there may be a stipulation or term that involves you directly and may affect your loan.
In addition, if you read the loan’s terms and conditions, you will better understand your loan. You will be able to see your annual percentage rate, your finance charge, your amount financed, and your total number of payments.
Loans Are Funded By Peer Investors
In most cases, a loan is funded by numerous people. Very large loans may have over one hundred different people funding it as they all work together. They all receive their payments and they all receive their fair share of interest. The more investors there are on the system, then the higher the chances are that you will get a lower interest rate, and the Lending Club is one of the biggest P2P companies in the world, so there are plenty of investors.
The funding for your loan comes from the investors. What this means to you is that your loan may have been approved and it may be ready to go, but there is no money to withdraw until the investors have put their money forwards.
The investors have already loaded their money into the marketplace, so your loan usually takes just minutes to fill up. Larger loans may take a little longer as the money is matched from the investor to your loan, but it rarely takes more than a few minutes.
See Your Loan Summary
Once you have your loan, you may see a summary of your loan. It tells you all about your loan and your personal details. The most interesting part is the credit history. It shows you all the things they researched about you both before your application and after they consulted a credit scoring company.
What You Must Do At The Very End
They are going to want you to connect your bank account so that they auto-pay (direct debit) your payments out of your bank. They also need your details so they may pay your money to you.
You will need to confirm your email at the very end of the process, which is unusual because usually a company will have you confirm your email address as you sign up and not after. You will also have to submit the document they asked for. These days, you can produce digital documents.
If you do not have the hardware or software to send digital scan and/or digital copies of your documents, then go to a local library or store and have your documents scanned. Be careful when doing this because scanners keep documents for weeks–if not years!
Loan Grades And Interest Rates
If you are a borrower, you may apply via the website and see what loans they will offer. You may be a little upset to see that your friend receives a better rate than you. You may get a better or worse rate than another person because you have a worse credit rating.
When you apply for your loan, you are judged by your credit rating and you are placed into a loan grade band. It will determine the loan-grading band you are in, and that will affect your interest rate, origination fee, and APR.
The origination fee is very poorly explained. The APR is simply the origination fee plus the interest rate.
Conclusion – Easy And Relatively Cheap
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They offer low interest rates, and you get a fixed rate that will never go up. You are very likely to receive your cash quickly because there are plenty of investors who are willing to fund your loan. There is also no penalty for pre-paying your loan, which means you may get rid of it as soon as you become a little wealthier. If you are looking for a loan with a good rate, then put this peer-to-peer lending company near the top of your short list.