Key takeaways
- SoFi offers larger loan amounts and longer terms than LendingClub, while LendingClub is better for smaller expenses and debt consolidation.
- SoFi allows co-borrowers and offers same-day funding, while LendingClub also allows co-applicants and pays creditors directly for debt consolidation.
- It is important to compare rates from multiple lenders before deciding, as APR, credit score requirements, repayment terms, fees and funding times can vary.
SoFi gives borrowers with strong credit access to large personal loan amounts and longer terms than LendingClub. LendingClub is better if you need a smaller loan to consolidate some pesky credit card debt.
If you qualify for a SoFi loan, your funds may be available the same day you apply. You can even co-borrow with someone else if you need to qualify for a higher loan amount. LendingClub also allows co-applicants and will pay your creditors directly if you choose to use its funds for debt consolidation.
SoFi vs. LendingClub at a glance
Both lenders offer solid personal loan options with APRs and standard terms for most personal loan companies. However, each caters to very different borrowers.
|
SoFi |
LendingClub |
|
|
Bankrate Score |
4.7 |
4.7 |
|
Better for |
Borrowers with strong credit who need a large loan | Fair credit borrowers looking to consolidate debt |
|
Loan amounts |
$5,000–$100,000 |
$1,000–$40,000 |
|
APRs |
8.99%-29.49% |
8.91%-35.99% |
|
Loan terms |
24–84 months |
24–60 months |
|
Fees |
No required origination fees, late payment fees or prepayment penalty. Optional origination fee of up to 7% in exchange for a lower APR. |
Origination fee: 3%-8% |
|
Minimum credit score |
680 |
600 |
|
Time to funding |
Same day you’re approved |
As soon as the next business day |
| Co-borrowers permitted | Yes | Yes |
SoFi personal loans
-
SoFi is one of few lenders to offer loan amounts up to $100,000 and terms over five years. The lender also advertises same-day funding for consumers who sign paperwork before 6 p.m. ET on a business day. That makes SoFi a great choice for large home improvement projects or making large purchases. The 84-month maximum term is longer than the 60-month limit set by many other lenders, which helps lower your payment by spreading out the loan balance over a couple of extra years. (Keep in mind that a longer loan term translates to higher overall interest charges.)
If you don’t meet SoFi’s credit score requirement of 680, you can submit a joint application with a creditworthy co-borrower. But if you need a small loan amount, this lender may not be the right match — you must borrow at least $5,000 with SoFi. While SoFi operates nationwide, its personal loans are only available in 29 states.
LendingClub personal loans
-
LendingClub could be a good option if you want to consolidate credit card debt — this lender will repay up to 12 creditors directly using loan funds, streamlining the debt consolidation process. Fair credit borrowers may qualify for a loan with LendingClub with credit scores as low as 600.
But LendingClub’s rates can be high, up to 35.99 percent. Plus, you must pay an origination fee of 3 to 8 percent of your loan amount.
How to choose between SoFi and LendingClub
SoFi and LendingClub are both good choices if you need a personal loan, but understanding the differences can help you decide between the two.
APR range
The most creditworthy borrowers will find comparable starting APRs at SoFi and LendingClub. However, SoFi is the winner for the lowest maximum APR, falling just below 30 percent. The higher maximum rate at LendingClub is likely because the lender caters to borrowers with lower credit scores than SoFi.
Minimum credit score
SoFi’s minimum credit score requirement is 680, which means you must have good credit (or a creditworthy co-borrower) to qualify. LendingClub sets its minimum score at 600 but also limits the amount you can borrow to $40,000. LendingClub’s minimum score and specialty in debt consolidation make it a good option for consolidating debt to improve your credit utilization ratio and credit score.
Repayment terms
If you want to stretch your payments out a longer term, you may qualify for a SoFi loan as long as seven years. However, keep in mind that a longer repayment term usually leads to higher borrowing costs.
Fees
SoFi has a unique approach to fees — you can choose a loan with a higher APR but no fees, or opt for a lower rate by paying an origination fee of up to 7 percent. The amount you can lower your rate isn’t clear, but it may be worth exploring if you can recoup the costs with a significantly lower monthly payment. LendingClub’s origination fees run between 3 and 8 percent of the amount borrowed, potentially making it a more expensive option than SoFi.
Before committing to a lender, use a personal loan calculator to crunch the numbers. Pay attention to the monthly payment and total cost of interest to determine which loan is the better option. A small origination fee may be a worthwhile trade for a significantly lower APR.
Bottom line: Which lender is better?
SoFi is a better choice for large loan amounts if you have great credit and need more repayment term options. You have the added benefit of adding a co-borrower’s income to help you qualify, and customer service support is available seven days a week. SoFi also beats LendingClub with its speed of funding.
If you don’t need to borrow much or have had it with all those high-interest rate credit cards, LendingClub’s low loan limit and strength in debt consolidation lending could be a good match. If you want to eliminate your debts with a shorter term, you can also add a co-borrower to boost your odds of approval.
Compare more lenders before applying
While SoFi and LendingClub are worthy of consideration, these two lenders aren’t your only borrowing options. Compare personal loan rates from other lenders before committing to one. This will ensure you’re getting the best deal possible for your situation.
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