Interest Rates and Fees
LendingClub will pay Notes investors principal and interest equal to their pro rata portion of each borrower payment related to the corresponding loan, less any fees associated with the receipt of payments, as described below.
Typically, investors pay LendingClub a service fee equal to approximately 1% of the amount of each borrower payment received within 15 days of the payment due date. There are a couple circumstances where the 1% fee would change:
- If borrowers miss a payment, investors do not pay a service fee.
- If a borrower prepays all or a portion of their loan within the first 12 months after the Note is issued, we limit the size of the service fee to 1% of the borrower’s regular monthly payment amount, rather than charge the investor 1% of the entire amount paid. We do this in order to protect investors’ returns and, as we don’t penalize borrowers for prepaying their loans, we think this makes it fair for our peer-to-peer marketplace.
When borrowers miss payments and loans become late, LendingClub makes a reasonable effort to recover the money owed to investors. If LendingClub is successful in recovering the owed payment(s), LendingClub charges investors one of the following collection fees, deducted from any amount recovered:
- Up to 40% on all amounts collected on a delinquent loan (net of legal fees and expenses) to the extent any litigation has been initiated against the borrower, or;
- Up to 30% on all amounts collected on a delinquent loan in all cases not involving litigation.
- Other collection fees charged by LendingClub or a third-party collection agency will reduce the payment amount investors receive related to the Note(s), for example, when a loan is charged off.
LendingClub does not charge a collection fee if no payments are collected, and no collection fee will be charged in excess of the amount recovered.
The fees stated above relate to borrower payments. If you invest in a LendingClub IRA, your IRA may have additional fees associated, learn more about LendingClub IRAs.
LendingClub Note interest rates and grades*
Based on the credit profile of each loan applicant, every corresponding Note is assigned a grade ranging from A1 to E5* with a corresponding interest rate. Each loan subgrade and interest rate are displayed below.
To learn more about how fees affect your net return, check out more information about your net annualized return.