What is a Personal Loan?


"LendingClub gives people an opportunity to consolidate their debts without providing collateral and putting them through a complicated and degrading approval process. I highly recommend LendingClub for all personal loans."
– Donna, a member from Arkansas

What is a personal loan?

A personal loan is money borrowed in a lump sum, at a fixed rate, and repaid in installments over the life of the loan.  It allows you to pay off high-interest debt or cover something expensive right away, then pay down the amount borrowed in manageable, fixed monthly payments. You can use it for medical care, paying off credit card debt, household repairs, major events and purchases, even travel. It’s your choice.

Getting a personal loan through LendingClub is a responsible, easy, and convenient way to access money when you need it most and pay it off in a predictable way.

Are there different types of personal loans? 

Yes! Personal loans can be secured or unsecured. At LendingClub we provide access to unsecured loans because it means that you don’t have to have a co-signer or provide any kind of collateral (like a car or house) to back your loan. Instead, we generally give people like you access to loans based on your personal credit history and other facts about you that help determine your ability to repay a loan, for example, your income. That makes it easier for us to provide you quicker and easier access to your loan in comparison, to say, a mortgage loan that requires an appraisal of your home.

If you do have a car and are interested in saving on your auto loan, check out auto loan refinance.

How does it work?

If you accept and agree to a loan offer, you’ll receive your personal loan in a lump sum, usually within a few days, and sometimes as soon as the following day. You repay your loan in fixed amounts, or installments, over a set amount of time (the loan term) such as 3 or 5 years, and the interest is fixed so it will never increase. Generally speaking, the better your credit profile, the lower the rate of interest you’ll be charged in exchange for borrowing. That said, there are many other factors we take into consideration. One number couldn’t tell your whole financial story!

Learn more about LendingClub’s history and how we work.

Why apply for a personal loan?

There’s a lot you can do with a personal loan: you can pay off credit card debt, make a home repair, cover medical expenses, plan your dream vacation, and get out of a stressful debt cycle.

A personal loan gives you the ability to pay for the things you need, even if you don’t have all the funds at the time you need to pay. It’s also a way to keep some money in your bank account while you pay for something expensive, just in case you need it. An emergency fund or financial cushion can prevent unfortunate events like a job loss or medical issue from becoming worse due to additional financial stressors.

Peace of mind

One of the main benefits of a personal loan when compared to other kinds of credit is the peace of mind; a personal loan is simple: you always know exactly the amount you borrow, exactly the amount you owe each month, and exactly how much interest you’re paying to borrow the money. You also know the date when you could become debt free up , because you choose the payoff timeframe. With a loan through LendingClub, you can choose between a 3 and 5-year loan term, and we have no prepayment penalties.

When it comes to finances, knowing what expenses are coming your way each month helps you stay in control. Nobody likes a debt surprise.

Why choose LendingClub?

  • It’s fast and convenient. You can do it all online from the comfort of home, and never stand in line. You could have funds in your bank account as soon as tomorrow.
  • Competitive rates. Did you know the average customer using a personal loan through LendingClub to consolidate debt or payoff credit cards saves almost $300* per month?
  • You don’t need collateral. For those of us who aren’t homeowners, this is a great way to access larger sums of money at a low, fixed rate. It’s also a lot quicker than traditional secured loans.
  • You’re often funded by people like you. Real people have made their extra money available to you to help you when you’re in a predicament, or when you’re ready to make your goals come true.

Checking what your rate could be on a loan through LendingClub doesn’t impact your credit score because we use a soft credit inquiry.

Explore your possibilities.


*Based on responses from 2,259 borrowers in a survey of 14,049 randomly selected borrowers conducted from 1/1/17-7/31/17, borrowers who received a loan to consolidate existing debt or pay off their credit card balance reported that they saved $287 a month on average.