Personal loans are as much in demand as ever, and the diverse multitude of available offers reflects this fact. Unless you happen to be a personal finance expert, it can be rather hard to properly evaluate the many different options. As a result, you won’t necessarily make the right decision given your circumstances. To help you find your way through this confusing landscape, the present article will compare two of the major national personal loan providers, Best Egg vs LendingClub, explain what sets them apart, and conclude with a number of general recommendations that can hopefully help guide your decision process.
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LendingClub vs. Best Egg: a Comparative Chart
| LendingClub | Best Egg | |
|---|---|---|
| APR Range | 8.3 - 36% | 7.99 - 35.99% |
| Term | 36 - 60 months | 36 - 60 months |
| Loan amount | $1,000 - $40,000 | $2,000 - $50,000 |
| Min Score | Poor (300-579) | Good (670-739) |
| Pros |
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| Cons |
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LendingClub vs. Best Egg Comparison
Terms
At first glance, the most interesting difference is probably in the rates. Best Egg's personal loan offers a similar APR range, whereas their origination fee starts from a considerably lower percentage, namely 0.99% against LendingClub’s 3%. This means that if your goal is to save money, Best Egg scores a point here. At the same time, it is somewhat opaque in how it evaluates potential clients, so in practice your mileage may vary.
On the other hand, LendingClub's loan offers a broader range of loan amounts. The minimum amount is $1,000 versus Best Egg’s $2,000, or even higher in some states. Thus, if you need a small loan, you should probably go with LendingClub. On the other end of the spectrum, Best Egg offers considerably larger loans for particularly large expenses of up to $50,000, as opposed to LendingClub’s upper limit of $40,000. You can also find other types of LendingClub personal loans on our website.
The number of offered loan term lengths is the same in both cases. Borrowers are allowed to choose between a 3-year or a 5-year term, with nothing in between.
Payment flexibility
LendingClub supports a particularly wide variety of payment methods. The default is regular charges from your bank account, automatically scheduled via ACH. Other options include debit cards, Apple and Google Pay, wire transfer, and paper checks. In select locations, even cash may be available. Best Egg’s inventory is more modest. Here, too, automatic payments from your bank will be set up by default. You can also arrange payments manually online and by phone, or mail your checks to Best Egg’s physical address.
Both lenders charge a fee for payments past the due date. That amounts to $15 in case of Best Egg and 5% of the due amount (but never less than $15) with LendingClub. Nevertheless, both also provide a grace period, during which you still have a chance to comply without having to pay the late fee. This grace period lasts 3 days for Best Egg and 15 days for LendingClub. Note that missing your loan payment even by as little as one day already counts as delinquency and may incur lasting negative consequences for your credit score, and of course you will also be liable for the additional accrued interest.
The due date can be changed through the online interface if you match an undisclosed list of conditions. With Best Egg, this can be done twice; LendingClub allows you to do that only once. Contact the support center if you have to ask for another shift.
On the other hand, extra payments ahead of the due date are allowed and do not carry any fees. LendingClub allows you, for each such payment, to choose whether it goes towards your monthly obligation or the principal.
Application process
With Best Egg, applying for a personal loan couldn’t have been easier. All you have to do is fill out an online form describing your personal and financial circumstances, after which you can expect to receive offers if you pass the prequalification. The whole process usually takes no more than one business day, but can extend for up to five days in some cases.
Applying with LendingClub works similarly. Their model is different in that the loans are funded by LendingClub’s numerous investors. After you complete the online application, you should very quickly receive several offers. Once you settle for one of them, it can take a little longer for the money to end up in your bank account. You can expect to be done in under a week. However, the possibility of longer delays (up to one month in extreme cases) should not be discounted.
Availability
Both companies offer their services online to a wide audience across the United States (adult citizens and permanent residents). The main limiting factor will be your credit history. Best Egg’s requirements make it harder to qualify for a personal loan, because you need a good credit score (640 at the minimum) and a steady income that significantly exceeds your loan obligations: a debt-to-income ratio of no more than 36% is advised. LendingClub’s demands are slightly less stringent, with the minimum credit score set at 600.
Sharing responsibilities
While neither lender allows cosigners, a further important difference is that LendingClub accepts joint applications from up to two people at once. Unlike cosigners, who are only liable in case the debtor is unable to pay, joint applicants share access to the funds and are held equally responsible for all loan payments. Because both applicants’ financial circumstances are taken into account during the review process, a joint application may result in better terms than either of you would be offered on your own.
To submit a joint loan application with LendingClub, just specify two applicants in the submission form. Best Egg, unfortunately, has no provision for joint applications at all.
Debt consolidation
Debt consolidation is the practice of taking a loan to cover the debts you owe several other creditors. This means you will only need to make one monthly payment, over a fixed term, which may save you some of the interest. Furthermore, less payments to miss is good for your credit score.
Both of our lenders feature special options for debt consolidation (Direct Pay for Best Egg, Balance Transfer Loans for LendingClub) that automatically transfer money from your loan balance to the downstream creditors, thus saving you the hassle of having to make the payments yourself. LendingClub allows adding up to 12 creditors from its wide partner network consisting of more than 1,700 banks, for both credit cards, and personal loans. Best Egg only seems to support consolidating credit card balances in this way.
Reputation
In general, it can be said that both of our lenders have an excellent reputation. LendingClub has been around for a fair bit longer, having been founded in 2006 as a pioneering peer-to-peer lending platform, whereas Best Egg first appeared in 2014. In the past, LendingClub was known as the go-to destination for individual investors. Such investments financed the majority of the loans in a P2P arrangement, though this is no longer possible. Nowadays, both companies are primarily backed by large institutional investors. In the case of Best Egg, all loans are funded by Cross River Bank and Blue Ridge Bank.
Both lenders are BBB accredited, with Best Egg having a marginally higher rating, specifically A+ against LendingClub’s A. Both also feature in many thousands of online reviews, most of which are positive. For example, TrustPilot gives LendingClub a rating of 4.8, compared to 4.6 for Best Egg.
Our Recommendations
To sum up, here are some of the reasons why you might prefer Best Egg or Lending Club for your personal loan.
When should I choose Best Egg?
- Your credit rating is good.
- You need a loan over $40,000.
- You need the money as soon as possible.
Check Best Egg personal loan rates
When should I choose LendingClub?
- Your credit rating is only fair.
- You live in Vermont, West Virginia, or Washington D.C.
- You need a loan under $2,000.
- You have a co-applicant.
Check LendingClub personal loan rates