Lending Club Complaints: 6 Problems Borrowers Face

Prosper Loan Complaints

Lending Club is a peer to peer lending company that offers great loans with low interest rates. The loans are funded by people all over the country. In this way, Lending Club does a great job at connecting people who need a loan to people who have extra money to lend. However, not everybody has a good experience. There are a few problems that borrowers face year after year.

Six Complaints Borrowers Have When Applying for a Loan

Today we are going to explore six problems that borrowers can have at Lending Club. If we are aware of these risks, our process of getting a loan can be much smoother.

Complaint #1: Some loan applications are denied

One of the main complaints borrowers have with Lending Club is getting approved for a loan. Lending Club’s application process can be quite strict. Not only do they prefer a good salary and job, but your credit score has to be 660 to even be considered for a peer to peer loan.

Prosper MarketplaceSolution: Thankfully, a different company called Prosper is an option. They allow peer to peer loans for credit scores as low as 640, which means many people can get loans through them that would be denied at Lending Club.  You can read about the difference between Lending Club and Prosper here, but they basically offer the same loan service – Prosper just approves more people.

Check your rate @ Prosper (won’t hurt your credit score)

Complaint #2: Interest rates can be really high

up arrowsSometimes when people get a loan at Lending Club, they realize their interest rates are somewhat high. This is important to discuss. Say you need a loan for $10,000 and you get approved for a great interest rate of 7%. You would pay $1,150 in interest on a three year loan. However, if your interest rate had a higher rate like 14%, you would pay $2,300 in interest over three years. A good interest rate can save you thousands of dollars!

Solution: here are four ways you can lower your interest rate:

  1. Improve your credit score: go to and make sure your report is free from errors.
  2. Only apply for as much as you need: people who apply for the maximum loan amount typically pay the very highest in loan payments.
  3. Take out a 36-month (3 year) loan: many people want a 60-month (5 year) loan, but this makes their interest rate higher.
  4. Do not shop around for credit: each time you apply for credit your score goes down.

If you do these four things, you are more likely to get the lowest possible rate on your loan.

Complaint #3: Loan payments can be expensive

Some borrowers have a difficult time paying off Lending Club loans because they cannot afford the payments. Many of these loans are for amounts as high as $35,000, which has payments of around $1000 per month. Obviously many of us cannot afford such a high loan payment.

Solution: Only borrow as much as you need. Only borrow the minimum amount. The more you borrow, the higher your loan payments will be. If you need $10,000 to pay off your credit cards, do not get a loan for $20,000. Take out the exact amount you need and you will be more able to make your monthly payments.

Complaint #4: Lending Club calls too much

cellphoneOften a borrower will miss a payment. When this happens, Lending Club notifies them about it, usually over email or with a telephone call. If they do not make a payment, Lending Club will send the loan into collections. At this point, people will be assigned to contact the borrower and remind them of their payments. As a result, borrowers can sometimes get annoyed by the emails and phone calls they receive.

Solution: Make your payments on time. If a payment fails, make sure you fix things. The longer you wait the more likely your account will go into collections, which will involve even more phone calls than before. If you are unable to make payments, set up a payment plan with Lending Club so that you can get back on track.

Complaint #5: Loans are unavailable in my state

The following states do not allow loans through Lending Club: Iowa, Idaho, Maine, North Dakota, and Nebraska. If you live in one of these states, it can be frustrating that you cannot get a loan.

Lending Club Borrower States


Solution: Apply for a loan through Prosper. They allow loans in some states that Lending Club does not.

Complaint #6: Is Lending Club a scam? Is it safe?

Lending Club in the PressFinally, one of the main questions people have with Lending Club is whether or not they are a legit company. Is Lending Club a scam or not? How can you be sure?

Solution: Read my article 6 Ways Lending Club is Legit and Safe. Basically, Lending Club has hundreds of stories in the press (New York Times, Wall Street Journal, etc) that say how good of a company they are. They have a solid rating from the Better Business Beauru (BBB) as well as many security features to their site.

Conclusion: Lending Club Rocks

While some people who get a loan through Lending Club have problems, most borrowers have no complaints. Most borrowers from Lending Club are satisfied with the lower payments that Lending Club offers, especially compared to their credit cards. If we follow some basic rules, Lending Club can be a great option for a loan.

Apply for a loan at Lending Club

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[image credit: FutUndBeidl "Arrows Showing Up"/ Moyan Brenn "Phone"CC-BY 2.0]

{ 22 comments… add one }

  • Larry November 12, 2013, 6:15 PM

    You do not explain why a payment would fail, is it because that the borrower has insufficient funds to cover the payment?

    • Simon Cunningham November 12, 2013, 9:38 PM

      Hi Larry. There are many reasons a payment can fail. Often it is from not having enough money in the bank, but sometimes the borrower has simply changed banks and needs to update Lending Club with the right account numbers.

  • T.L. January 2, 2014, 2:32 PM

    Personally I think the Lending Club’s credit criteria may be a bit stringent. We submitted a request and was immediately denied due to the fact that our credit score was 753, we owed too much money on our cards (all of our cards combined is 25% of usage) and so on. Interesting, because my daughter got approved with lower income, lower credit score and owing more. We were trying to consolidate to one payment so that we can eventually get everything paid off and retire.

  • KRJ January 8, 2014, 8:31 AM

    I have a loan through Lending Club right now. They got me out of a high rate credit card, I am making the same monthly payments, but will have it paid off in three years. My only complaint with them through this whole process is that it takes slightly more than a full business week for my payment to be deducted from my bank and post to my LC account. Other than that, I’m very happy thus far.

  • shawna January 16, 2014, 10:31 AM

    I’ve completed almost everything and so far everything has been very easy, which kind of gives me a reason to pause. It concerns me about providing my bank account information. Has anyone had anything negative happen with their checking account and/or savings when going through this process.

    • Simon Cunningham January 16, 2014, 11:00 AM

      Lending Club and Prosper both have excellent security features on their sites to keep your info safe.
      Hope this helps,

  • Ken January 16, 2014, 9:47 PM

    Excellent article. Thanks for taking the time.

  • Robert Bell January 22, 2014, 6:57 PM

    While your “review” has some useful information, it comes across as a grooming post – a put-up job from Lending Club.

    I am not saying Lending Club is bad, but geez, when you google “lending club complaints” a lot of sites like yours come up, with conclusions like yours, “Lending Club Rocks!”

    I mean, that last part is a bit embarrassing.

    Try to be more objective.

    • Simon Cunningham January 22, 2014, 6:58 PM

      What about the possibility that, objectively, Lending Club does indeed rock?

  • Melba Sales January 25, 2014, 3:32 AM

    Question? If I am denied credit, won’t I need to change banks so they can’t come back on my information and use it. Have people had this problem previously> please reply. I can’t afford to lose my SS check.

  • Jenni January 31, 2014, 9:38 AM

    I applied through Lending Club recently to help me pay off high interest credit cards. I was a little nervous because my credit isn’t that great, but not terrible either. I always pay my bills on time, but found myself barely getting by. I applied for just money enough to pay off all my credit cards; I’m literally saving $386.00 a month, not counting the money I’ll be saving in interest! The process for applying was very easy, actually it’s effortless. Needless to say, I’m one happy girl with a lot less worry.
    The Lending Club is totally worth a try!

  • JW February 19, 2014, 6:34 AM

    I went through the whole online application process for a 20k debt consolidation loan, provided most of my financial info, and on the last page, under terms and conditions, I see that Lending Club charges a $1000 fee for this loan. I think Lending Club should have disclosed this in the beginning of the process.

    • Simon Cunningham February 19, 2014, 10:05 AM

      Hi JW. Yes, Lending Club does charge a closing fee of around 5%, but I believe you would *still* pay less in fees overall as compared to other loan issuers. Of course its always a good idea to look around and consider other options. For instance by having Prosper quote you their rate as well.

      • Leon williams March 10, 2014, 6:19 PM

        No one has asked what kind on tax information do they provide at the end of the year?

  • Becky March 15, 2014, 5:22 PM

    Does applying for a loan with lending club effect your credit or look like an inquiry?

    • Jack April 5, 2014, 5:57 AM

      They claim that a rate quote will not affect your credit score and has not shown up as an inquiry on mine (so far..) But then they don’t ask for your Social Security Number or tax ID. I don’t know what credit database they access based on a person’s name, address, DOB and phone number. To get a FICO score, you need a SSN. So, Lending Club’s ability to discern a person’s creditworthiness is quite mysterious.

  • Jack April 5, 2014, 5:49 AM

    I applied for a loan and was accepted but I rejected the terms. I have a 790+ credit score, no utilization and only 1 inquiry, no bankruptcy ever. Not bad you might think, and that I might qualify for a lower interest loan but I was approved for the $17,000 at 22 percent. Twenty two PERCENT. Who do they reserve the low interest rates for anyway?
    I will say it was easy to apply, very easy. But if a person with a great credit profile can only get a loan at 22 percent, I can’t even imagine what a person whose score is lower must face.

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