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Interest Rates and How We Set Them

Lending Club’s interest rates take into account credit risk and market conditions. The final interest rate for each loan grade is the result of the following equation:

Lending Club Base Rate + Adjustment for Risk & Volatility

The Adjustment for Risk & Volatility is designed to cover expected losses and provide higher risk-adjusted returns for each loan grade increment from A1 to G5.

The loan grade is the result of a formula that takes into account not only the borrower’s credit score, but also a combination of several indicators of credit risk from the borrower’s credit report and loan application. All loans have either a 36- or 60-month term, with fixed interest rates and equal payments.


Table 1. Loan Grades

Loan Grade Sub-Grade Lending Club Base Rate Adjustment for Risk & Volatility Interest Rate
A 1 5.05% 0.98% 6.03%
2 5.05% 1.44% 6.49%
3 5.05% 2.07% 7.12%
4 5.05% 2.64% 7.69%
5 5.05% 3.34% 8.39%
B 1 5.05% 4.12% 9.17%
2 5.05% 5.10% 10.15%
3 5.05% 5.94% 10.99%
4 5.05% 6.62% 11.67%
5 5.05% 7.44% 12.49%
C 1 5.05% 7.94% 12.99%
2 5.05% 8.30% 13.35%
3 5.05% 8.93% 13.98%
4 5.05% 9.44% 14.49%
5 5.05% 9.94% 14.99%
D 1 5.05% 10.56% 15.61%
2 5.05% 11.24% 16.29%
3 5.05% 11.94% 16.99%
4 5.05% 12.52% 17.57%
5 5.05% 13.19% 18.24%
E 1 5.05% 13.94% 18.99%
2 5.05% 14.47% 19.52%
3 5.05% 15.15% 20.20%
4 5.05% 15.94% 20.99%
5 5.05% 17.10% 22.15%
F 1 5.05% 18.38% 23.43%
2 5.05% 19.03% 24.08%
3 5.05% 19.45% 24.50%
4 5.05% 19.94% 24.99%
5 5.05% 20.52% 25.57%
G 1 5.05% 20.75% 25.80%
2 5.05% 20.78% 25.83%
3 5.05% 20.84% 25.89%
4 5.05% 20.94% 25.99%
5 5.05% 21.01% 26.06%

Lending Club Proprietary Model Ranking

If an applicant passes the initial credit screening criteria, the applicant is assessed by Lending Club’s proprietary scoring models which can either decline or approve the applicant. The initial scoring model provides the applicant with a score, which when combined with the applicant’s FICO score and certain other credit attributes arrives at a Model Rank. The Model Rank is based upon an internally developed algorithm which analyzes the performance of Borrower Members and takes into account the applicant’s FICO score, credit attributes, and other application data. The Model Rank is between 1 and 25 and corresponds to a Base Risk Sub-Grade as follows:



Table 2. Initial Loan Sub-Grade Assignment

Model Rank Base Risk Sub-Grade
1 A1
2 A2
3 A3
4 A4
5 A5
6 B1
7 B2
8 B3
9 B4
10 B5
11 C1
12 C2
13 C3
14 C4
15 C5
16 D1
17 D2
18 D3
19 D4
20 D5
21 E1
22 E2
23 E3
24 E4
25 E5

Loan Grades and Risk Modifiers

We then modify the Base Risk Sub-Grade using credit risk indicators including:

  • Requested Loan Amount
  • Loan maturity: 36 or 60 months

to arrive at a final Sub-Grade.



Table 3. Requested Loan Amount Modifier by Base Risk Grade

Requested Loan Amount
Base Risk Grade / Modifier
A B C - E
<$5,000
-1 -1 -1
$5,000 - <$10,000
0 0 0
$10,000 - <$15,000
0 0 0
$15,000 - <$20,000
0 0 -1
$20,000 - <$25,000
0 -1 -2
$25,000 - <$30,000
-1 -2 -3
$30,000 - <$35,000
-2 -3 -4
$35,000
-4 -5 -6

Table 4. Loan Term Modifier

Loan Term (Maturity) Loan Grade Risk Modifier
36 months  A - G  0
60 months  A - G  -8 to -4

Basic Requirements for Borrowers

Currently, to borrow through Lending Club, you must be a US citizen or permanent resident, or be in the United States on valid long term visa; and be at least 18 years old with a verifiable bank account.

To qualify for a loan, a number of factors are considered including, but not limited to:

  • Information you provide on your loan application
  • Information provided about you by credit bureaus
  • Your credit score, which predicts the likelihood that you will make on time payments until your loan is fully repaid
  • Your debt-to-income ratio (how much money you owe compared to how much money you earn)
  • The length of your credit history, the number of other accounts that you have open, and your usage and payment history with those accounts
  • Your recent credit activity, including how many other credit inquiries you have initiated over the past six months

At this time, we are unable to accept loan applications from residents of five states: Iowa, Idaho, Maine, North Dakota, and Nebraska.

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