LendingClub: A History of How it Works
As an online business in a relatively new industry called peer-to-peer lending (also known as marketplace lending), we receive many questions, including this one:
Is LendingClub Legitimate?
The short answer is yes. Read on for more in plain English (sorry, fans of complicated legal jargon!).
Fast facts about LendingClub:
How LendingClub works
LendingClub is an online peer-to-peer lending platform with state-of-the-art technology to deliver fast, safe service and funding. We’re called a peer-to-peer lending platform because we connect people who want to borrow with people who want to invest. Individual people (our peers) can back loans by investing in LendingClub Notes. And platform is just a fancy word for our website and the infrastructure behind it.
Being an online business leads to key benefits:
- We don’t have the overhead of brick-and-mortar branch offices which lets us pass savings on to you.
- We use cutting edge technology to deliver service—and funds.
- Information (and our staff) is centralized, so we can help you quickly and efficiently. In fact, when you speak with a member of our support team, they’re in the same location as our software engineers, right here in California.
Your information is secure
Some people aren’t comfortable providing private information, such as a bank account, to an online business. We get it. Because we are an online lending platform dealing with sensitive information, we use cutting edge technology to keep it safe. (By the way, we do have real people at a real office in San Francisco’s financial district!). Because we do all our business online, ensuring your information is secure is core to our business:
- Our site is secure, meaning information that you enter on our site won’t be intercepted by hackers.
Here’s what to look for when you’re transacting online:
- We take great lengths to make sure your sensitive information is secure, including internally.
How we speed up the approval process
Some people are surprised by how quickly they can check their rate and get access to a loan. We can approve applications quickly because we use cutting edge technology and we’ve had 10 years to hone our process. Rather than taking a lengthy application at a branch with archaic or time-consuming hurdles, we use technology and best practices to make getting a loan quick and easy. That’s our value proposition.
In fact, if you check customer reviews on our site as well as partner sites, you’ll see a lot of folks saying it’s “hassle free.”
How we check your credit score without impacting it
Gone are the days when checking your rate on a potential loan has to impact your credit score! There are “soft credit checks,” here to save the day. A soft credit check is when a credit bureau provides sufficient information for a financial company like us to accurately predict potential loan terms. It’ll be visible to you on your credit report, but not to anyone else who pulls your credit history.
This lets you check your rate on a potential loan without risk or obligation. And it takes just a few minutes.
Rates and transparency
When you’re borrowing money, it’s coming from other people. Interest on the loan compensates them for taking a chance on you to pursue your goals. The interest rates are fixed, so your payment never increases, and you know exactly what to expect each month when you get a loan.
We want you to be an informed member of our club. Everything you need to know about how the financials work is available on our Rates & Fees page.
How to Protect Yourself from Scammers
Scammers are becoming more creative and sophisticated in their efforts to steal your identity and your money. Whether a scammer is posing as a Nigerian prince or a legitimate business like LendingClub, you play a crucial role in safeguarding your information.
Here are three ways to guard against scams, as well as what to expect when you’re communicating with us here at LendingClub.
Don’t pay money for the “promise” of a loan. Ignore any advertisement or just hang up on any cold caller who “guarantees” a loan in exchange for a fee paid in advance. This is known as an advance fee scam.
- LendingClub will never offer access to a loan or payment plan in exchange for paying a fee in advance. Any fees associated with your loan won’t be due until your loan is issued.
- Be on alert if someone asks you to buy a gift card in exchange for a loan. This is how scammers get around bank issues.
Don’t respond to emails that request personal or financial information. Pick up the phone to verify the legitimacy of the sender.
- LendingClub will never email you to collect your bank account number, credit card information, Social Security number, or date of birth.
- LendingClub will never ask you to download software in an email.
Do exercise caution when providing personal information over the phone.
- LendingClub will never call you and ask for your credit card or debit card information to gain access to a loan.
- If you apply for loan, we may call you to verify certain information such as your date of birth or employment.
We’re your partners in reaching financial goals, and in safeguarding your information. If you have concerns about whether an email or phone call that seems like it’s from LendingClub is legitimate, you can always contact us to make sure.