Online lending does not seem unusual these days. On the contrary, for many Americans, it tends to become a really attractive option if compared to conventional bank personal loans. That said, choosing a lender is quite a challenge, as there are too many things to consider. In this comprehensive review, we invite you to compare the two major lending entities – Upstart and LendingClub.
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Upstart vs LendingClub: a Comparative Chart
| LendingClub | Upstart | |
|---|---|---|
| APR Range | 8.3 - 36% | 5.6 - 35.99% |
| Term | 36 - 60 months | 36 - 60 months |
| Loan amount | $1,000 - $40,000 | $1,000 - $50,000 |
| Min Score | Poor (300-579) | Poor (300-579) |
| Pros |
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| Cons |
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How to Choose between Upstart and LendingClub
An important fact to realize is that no option is perfect for everyone. Any offering has its strong and weak points. We’ll compare the two lenders by several important criteria to discover which one is beneficial in certain life situations.
General Terms and Requirements to Borrowers
Basic requirements to applicants are a crucial thing to consider, as they let see whether you can qualify for a loan or not. For obtaining a personal loan at LendingClub, your credit score must be higher than 600. Importantly, you must have no loan delinquency for the past year. You can find other LendingClub loans for various purposes on our website.
As for Upstart, they offer a personal loan to applicants with a credit score of 300 and higher. Moreover, they can approve applications of recent graduates who have a zero credit history, which makes this lender a good option for young professionals.
Minimum and maximum loan amount is another aspect to focus on. LendingClub is ready to provide from $1,000 - $40,000 for the term of 36 - 60 months. Upstart, in turn, claims the loan size of $1,000 - $50,000 for the same period of 36 - 60 months. Worth mentioning that Upstart uses the artificial intelligence technology to analyze the details of the applicant’s biography, including his education, academic achievements, job experience, etc. This helps those with little/no credit history get a positive decision.
APR & Additional Fees
The annual percentage rate depends on several variables, so it is calculated individually for every borrower. In general, the better your credit score is, the lower APR you can count on. Thus, LendingClub can offer the minimal APR 8.30%, while the maximum rate can reach 36%, which is pretty high. As for Upstart, it offers the APR ranging from 5.6 - 35.99%, which makes it a preferable option for many potential borrowers.
On the plus side, both lenders charge fees neither for early payment nor for direct deposit. On the minus side, they can charge an origination fee, which varies from 3 - 6% at LendingClub and from 0 - 10% at Upstart. The fee for the late payment is 5% of the installment (at least, $15). Additionally, Upstart charges $15 for both ACH Return and Check Refund. The loan rate is fixed at both companies.
Payment Flexibility
If for some reason you wish to change the payment day, you’ll find out that both Upstart and LendingClub give such an opportunity. Moreover, LendingClub has an option of temporary changing the payment due date by phone or via e-mail. Upstart, in turn, is convenient for those seeking the possibility of debt consolidation, as it offers an option of sending payments to creditors directly.
The Process of Application
When you deal with online lending, the application process tends to be rather simple if compared to applying for a loan at a traditional bank. Still, there is some difference between the two companies. LendingClub vs Upstart offers a very quick procedure, which is completed in three simple steps.
- Fill in the application form by choosing the loan size, the purpose of borrowing, and your credit score to check your custom rate. LendingClub practices a soft credit pull that doesn’t impact your credit score.
- Provide additional details to complete the application.
- Wait for approval and then select a suitable loan (you’ll be offered several options).
Once you’ve chosen a loan and agreed with its terms, your application is sent to private investors, who need to fund at least 60% of the loan amount within 30 days. After that, you get funds. If private funding turns out to be insufficient, your credit application is rejected.
The application process at Upstart is a little more complicated, as it collects more details to analyze with the help of AI. However, the funds are provided much faster – within 1-3 business days. The process consists of three stages as well:
- Choose the loan purpose, using a dropdown menu.
- Сheck the rate, fill in a special form. Here, you need to provide detailed information about your job, education, degree, level of income, previous loans, etc.
- If your application is approved, you get several proposals to choose from. Choose the one that suits you best, and in 1- business day you’ll get the funds.
To sum it up, Upstart requires more personal details to be provided, and the process of application is more time-consuming. However, it allows getting funds much faster and even with no credit history.
Upstart vs LendingClub: Reputation and Ranking
Both companies have proved their reliability and trustworthiness. Thus, LendingClub scores 4.8 stars on Trustpilot. Customers like the ease of application, a high approval rate, and a good FAQ section on the site. Availability of Android and iOS apps adds flexibility. On the negative side, users often complain about hidden fees and inadequately high APR for credible borrowers. The lending process can take up to 30 days, which is too slow.
Upstart has a 4.9-star rating on Trustpilot. Positive reviews are associated with a high approval rate, high speed of lending, acceptable APR, and lack of hidden fees. In negative reviews people complain about the lack of proprietary mobile apps and problems with customer support.
Eligibility and Availability
LendingClub provides personal loans to residents of the US throughout the country, except for the Iowa State. The minimal requirements to prospective borrowers are the following:
- must be 18+ years old;
- US citizenship (not US territory);
- must have a verified account in one of American banks;
- employment or another source of income .
Loans from Upstart are also available throughout the US with the only exception - West Virginia. Basic requirements to applicants are the following:
- 18+ years old;
- US citizenship;
- no loan delinquencies at the moment of applying;
- no bankruptcies;
- have a full time job, a full time job offer starting in 6 months, a regular part time job or another source of regular income;
- fewer than 6 credit report inquiries for the period of 6 months before applying (not including any inquiries related to student loans, vehicle loans, or mortgages).
LendingClub or Upstart: What to Choose
There’s no single answer to the question, which of the two lenders is better, as each one has strong and weak points. It makes sense to opt for Upstart if:
- you are pressed for time/can’t wait 30 days for the approval;
- your credit score is not high enough;
- you need more than $40,000.
Check Upstart personal loan rates
LendingClub, in turns, is worthy of consideration if you:
- have an excellent credit score and no loan delinquencies;
- need a relatively small amount ($40,000 is the limit);
- have time to wait for finding investors.
Both lenders are reliable and well-reputed, which is confirmed by thousands of positive reviews. Keep in mind, however, that LendingClub may have hidden fees, so check all the details of your loan agreement carefully.
Check LendingClub personal loan rates