Which Is Best For You? – Forbes Advisor – Earn Charter

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Both SoFi and LendingClub are online lending platforms that offer unsecured personal loans to qualifying consumers. LendingClub may offer better interest rates to creditworthy borrowers, but SoFi stands out for its large loan amounts, lack of fees and various customer perks.

Before accepting a loan from either lender, consider the features of each to find the one that best works for you.

SoFi vs. LendingClub: A Brief Comparison

SoFi and LendingClub both offer a streamlined online borrowing experience. You can prequalify for personal loans on each lender’s website, which lets you check your rates without impacting your credit score.

However, the lenders have some key differences when it comes to interest rates, fees, repayment terms and other loan features. Here’s a closer look at how they compare:

SoFi Personal Loans: Pros and Cons

Founded in 2011, SoFi offers personal loans between $5,000 to $100,000 in every state and Washington, D.C. Lender doesn’t charge any fees on its personal loans, which can keep borrowing costs down.

Although SoFi doesn’t let you apply with a co-signer, it does accept joint applications with co-borrowers. Adding a co-borrower could improve your chances of qualifying if you’re having trouble meeting SoFi’s credit score requirement of at least 680 on your own.

Here’s a closer look at the pros and cons of borrowing a personal loan from SoFi.

Pros

  • Large loan amounts. SoFi offers personal loans as high as $100,000, one of the largest amounts you can find among personal loan lenders. This option may be helpful if you’re renovating your home or covering another big expense.
  • Flexible repayment terms. With a SoFi personal loan, you can choose loan terms anywhere from 24 to 84 months. A shorter term will help you save on interest, while a longer term will have more affordable monthly payments.
  • No fees. SoFi doesn’t charge origination or late fees on its personal loans. There’s also no prepayment penalty if you repay your loan ahead of schedule.
  • Borrower perks. SoFi offers various benefits to borrowers, such as unemployment protection. If you lose your job, SoFi will permit temporary loan forbearance. Other perks include financial planning, member experiences and a discount on estate planning.

Cons

  • High credit score requirement. SoFi requires a minimum credit score of 680 to qualify for a personal loan, making itself out of reach for many borrowers.
  • May have to pay origination fee to access lowest rates. Although you don’t have to pay an origination fee on a SoFi loan, you can choose to pay one between 0% and 6% to reduce your interest rate. Use a personal loan calculator to crunch the numbers and see if the savings from a lower interest rate would offset the cost of the origination fee.
  • Doesn’t permit co-signers. Although SoFi lets you apply jointly with a co-borrower, it doesn’t let you apply for a personal loan with a co-signer.
  • High minimum interest rate. SoFi’s personal loan rates currently start at 8.99%.

Compare Personal Loan Rates From Top Lenders

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LendingClub Personal Loans: Pros and Cons

Formerly a peer-to-peer lender, LendingClub now functions as a traditional lender. It offers personal loans between $1,000 to $40,000 across the country. LendingClub’s personal loan rates can be competitive, ranging from 9.57% to 35.99%.

LendingClub has a higher maximum interest rate than SoFi, and on top of that, LendingClub charges more fees, including an origination fee and late fees for payments made more than 15 days past the due date.

Here’s how personal loans from LendingClub break down.

Pros

  • Competitive interest rates. LendingClub’s rates range from 9.57% to 35.99%. You’ll likely need excellent credit and a steady income to qualify for its lowest rate.
  • May accept fair credit. LendingClub doesn’t disclose a specific minimum credit score, but it may work with borrowers with fair credit, according to a customer service representative. Fair credit scores range from 580 to 669 on the FICO scoring range.
  • Allows co-signers and co-borrowers. LendingClub accepts joint applications with co-signers and co-borrowers. Adding a creditworthy borrower to your application could help you qualify for a personal loan or access lower rates.
  • Available in all 50 states and Washington, D.C. LendingClub provides personal loans across the U.S.

Cons

  • Loan limit of $40,000. LendingClub’s largest personal loan is significantly lower than SoFi’s. SoFi lets you borrow up to $100,000, but LendingClub personal loans max out at $40,000.
  • Charges origination and late fees. LendingClub charges origination fees that equal between 1% and 8% of your loan amount. On a $15,000 personal loan, that fee would come out to between $150 and $1,200. It also charges fees for late payments.
  • High maximum interest rates. Although LendingClub’s minimum rate is quite low, its maximum rate is high. A rate of 36% is generally seen as the highest an interest rate can be before a loan becomes unaffordable or even predatory.
  • Loan terms max out at five years. LendingClub has a shorter maximum repayment term than SoFi—five years as opposed to seven.

Choosing Between SoFi and LendingClub

Both SoFi and LendingClub offer unsecured personal loans with competitive rates and a variety of repayment terms. LendingClub may be able to offer better rates than SoFi, but its origination fee could offset the savings of a low rate. SoFi caters to borrowers with good credit, whereas LendingClub may be the better fit if you have fair credit or want to apply with a co-signer.

SoFi may be preferable if you’re looking to borrow a large personal loan, as it lends between $5,000 to $100,000. LendingClub, on the other hand, lets you borrow smaller amounts ranging from $1,000 to $40,000.

Fortunately, you don’t have to guess which lender would offer you the more affordable loan. Both SoFi and LendingClub offer the option of prequalifying for a personal loan online, so you can check your loan offers without impacting your credit.

When comparing your loan offers, look for a personal loan with a competitive rate, low (or no) fees and a repayment term that works for your budget.

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