LendingClub vs. Discover: Which Personal Loan Is Right for You?

If you need a personal loan quickly, LendingClub and Discover are excellent choices; nevertheless, the ideal option will depend on your requirements and personal situation. LendingClub is perhaps the best option for those with fair or average credit, even though both lenders provide quick response times following application. Discover may be a fantastic option for those with good credit.

You can compare lenders and choose the best choice for your requirements with the aid of MoneyGeek's comprehensive and current information on well-known personal loan lenders in the U.S.

To help you decide between a loan from LendingClub and a loan from Discover, MoneyGeek compared the lenders for interest rate range, minimum credit score requirements, loan amount range, repayment terms and fund disbursement time.

LendingClub and Discover offer maximum loan amounts of $40,000 and $35,000, respectively. However, at 720, Discover has a higher minimum credit score requirement for approval than LendingClub. LendingClub may be the best option if you have good credit and need a personal loan with a higher maximum loan amount.

LendingClub provides personal loans with APRs ranging from 7.04% to 35.89%. Discover offers APRs ranging from 5.99% to 24.99%, depending on creditworthiness.

The APR, or annual percentage rate, is the yearly interest rate that a borrower must pay back on a personal loan. Your credit history and risk profile heavily influence the APR on your loan. APR ranges might also vary significantly among lenders.

Although obtaining the lowest possible interest rate is excellent, APR is just one factor to consider when selecting a personal loan provider.

Borrowers with fair-to-good credit are eligible for a LendingClub loan. Unlike Discover, which requires a minimum credit score of 720, LendingClub only requires a credit score of 600 to be eligible for a personal loan.

Lenders use your credit score to assess your loan eligibility and terms. Based on this score, your APR, as well as your repayment terms, may be selected.

It’s important to note that factors like your credit and payment history, current debts, types of credit accounts and new credit account applications may impact your credit score.

The personal loan amount range is the amount of money a lender is willing to lend to a borrower. Personal loans from LendingClub are available between $1,000 and $40,000, while those from Discover range from $2,500 to $35,000.

Many factors, including your creditworthiness, the loan's repayment term, the loan's purpose and the lender's terms and conditions, will impact the amount you’re allowed to borrow. Because of this, you should look for a flexible lender to modify the terms of your loan to meet your requirements.

A loan's repayment term is the time frame a borrower has to pay back a personal loan. LendingClub has repayment terms ranging from 36 to 60 months, while Discover offers repayment terms from 36 to 84 months.

Longer loan terms typically equate to reduced monthly payments but higher overall costs. Because of this, it’s in your best interest to choose a loan with the shortest payback period and affordable monthly payments. However, the best duration for you to pay back a loan will depend on your circumstances.

Lenders generally consider your debt-to-income ratio and regular income when establishing your payback period.

When compared to conventional lenders, LendingClub and Discover disburse loan funds quickly. LendingClub and Discover may disburse your borrowed funds the next business day after you sign your personal loan agreement.

Since neither lender has an advantage over the other in terms of loan disbursement time, you should evaluate other factors, like APR and loan terms, to determine if it’s the right loan for you.

LendingClub and Discover each have features that would benefit particular borrowers. Discover stands out due to its low APR range and longer payback period. Meanwhile, LendingClub has a lower minimum credit score threshold, a lower loan minimum and a higher maximum loan amount.

Based on our review, the following borrower profiles are best suited for each lender:

• Discover is suitable for consumers with good credit who wish to benefit from attractive loan conditions and a longer repayment period.
• LendingClub is ideal for individuals with average credit scores or those who need a larger loan.

Getting a personal loan requires careful research. To assist you with the process, MoneyGeek provided answers to some commonly asked questions concerning personal loan lenders below.