SoFi Personal Loans vs. LendingClub: how they compare

SoFi and LendingClub are two options for low cost personal loans. Both offer loans for debt consolidation, home improvement and other purposes.

For borrowers with excellent credit and strong income, we give SoFi the edge over LendingClub as it offers a lower rate range, no fees, and greater repayment flexibility.

Here’s a side-by-side comparison of SoFi and LendingClub. We always recommend borrowers to compare loan terms, rates and features before applying.

SoFi vs. LendingClub at a glance

SoFi may be a better option if:

  • Your credit score and income are strong enough to offer you the lowest rate

  • You don’t want origination or delay fees

  • You want a large or variable rate loan

Founded in 2011, SoFi is an online finance company that offers personal loans as well as student loan refinances, mortgages and financial planning. It offers personal loans up to $ 100,000, an unusually high loan amount among online lenders.

How to qualify: SoFi requires a minimum credit score of 680; its borrowers typically have credit scores of 700 or higher. The business also considers income and free cash flow, or how much of your income is left after expenses.

You can apply with a co-applicant, which can help you qualify for a loan or get a lower rate. The co-applicants must live at the same address, according to SoFi, and the two applicants are jointly responsible for repaying the loan.

Financing deadline: SoFi loans are typically funded within seven days from the start of the application; co-applicants may take a little longer.

Fresh: SoFi offers fixed and variable rate loans at annual percentage rates ranging from around 6% to 20% with an automatic payment discount of a quarter of a percentage point.

Variable rate loan rates may change based on market interest rates, but include limits. SoFi loans do not have origination fees, prepayment penalties, late fees or overdraft fees.

Repayment flexibility: SoFi allows borrowers with fixed rate loans in good standing to change their payment terms. The company also allows you to apply for forbearance (temporary suspension of payments) for three months at a time if you lose your job through no fault of your own. Interest continues to accrue on suspended loans.

Good option for: SoFi loans work best for debt consolidation and the financing of large one-time expenses, such as home renovations. The lender offers high loan amounts, low rates and flexible repayment terms. You will need good credit and a solid income to qualify.

LendingClub may be a better option if:

  • You have an established credit history and good credit

  • You have a low debt ratio

Loan Club connects borrowers with investors through its online marketplace. His loans range from $ 1,000 to $ 40,000 and can be used for many purposes, including debt consolidation, home renovations, auto financing, and medical bills.

How to qualify: LendingClub accepts applicants with lower credit scores than SoFi; its minimum credit score is 600. Applicants must also have at least three years of credit history and a debt to income ratio less than 40% for single applicants.

Like SoFi, LendingClub offers joint applications. The combined DTI ratio of borrowers must be less than 35%.

Financing deadline: The entire process, from application to loan approval and financing, can take anywhere from three to seven days.

Fresh: LendingClub’s APR ranges from around 11% to 36%. This includes a one-time setup fee of between 2% and 6%, which is deducted from the loan proceeds. LendingClub also charges late fees if a payment is more than 15 days late.

Direct payment from creditors: For borrowers consolidating their debts, LendingClub offers to reimburse your creditors directly. You can use up to 80% of your loan amount for this purpose.

Good option for: LendingClub loans work best for debt consolidation, borrowers with good credit, and those who wish to apply jointly. It requires a lower minimum credit score to qualify and more flexible income requirements than SoFi, but also has a higher APR range.

Shop for the best personal loan

If you have good credit, your best bet is to compare SoFi and LendingClub loans with other lenders to make sure you receive the rate and terms that work best for you. Click the button below to pre-qualify on NerdWallet and receive a personalized rate from multiple lenders.

NerdWallet Personal Loan Ratings award points to lenders who offer user-friendly features including: flexible credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, payment reporting to credit bureaus and financial education. We also take into account the number of complaints filed with agencies such as the Consumer Financial Protection Bureau. This methodology only applies to lenders who cap interest rates at 36%, the maximum rate that financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive any compensation for our reviews. Read our editorial guidelines.

Source link

About Matthew Berkey

Check Also

Where to get a personal loan with bad credit

LOS ANGELES – October 5, 2021 – ( iQuanti: If you need the cash but …

Leave a Reply

Your email address will not be published. Required fields are marked *