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

Updated: October 3, 2024

Advertising & Editorial Disclosure

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.

Key Takeaways

blueCheck icon

LendingClub and Discover are two of the most prominent personal loan companies in the United States. They distribute funds quickly to borrowers with excellent and moderate credit.

blueCheck icon

Several factors, including interest rates, fees, repayment schedules and minimum credit requirements, are evaluated by each lender to determine the terms of a personal loan. For this reason, choosing a loan involves weighing several factors.

blueCheck icon

Lenders consider your credit history and score to calculate your interest rate. Knowing how a lender calculates your APR will help you select the best option.

WHAT WE’RE GEEKING OUT ON

LendingClub or Discover: Overview

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


  • LendingClub

    LendingClub provides personal loans to customers with good and fair credit.

    • 7.04% to 35.89%APR Range
    • 600Minimum Credit Score
    • $1,000 to $40,000Loan Amount Range
    • 36 to 60 monthsRepayment Terms
    • Next DayTime to Receive Funds

    LendingClub, founded in 2007, has financed over $70 billion in loans and has over four million members. The lender offers personal loans ranging from $1,000 to $40,000 with repayment terms from 36 to 60 months.

    Although LendingClub is good for borrowers with low credit scores that need funds quickly, it has a high maximum APR. This means that borrowers with low credit scores may pay a high interest rate. LendingClub is ideal for debt consolidation loans, offering the option for direct payment to creditors.

    Pros

    • Soft credit check
    • Average credit score requirement
    • Direct payment to a borrower's bank or pay creditors directly
    • No prepayment penalty

    Cons

    • Origination fees
    • No discount for automatic payments
    • Loan amount: $1,000 to $40,000
    • Repayment terms: 36 to 60 months
    • Minimum credit score: 600
    • Time to receive funds: Next day
    LendingClub

Discover


  • Discover

    Discover is a good option for customers needing a small loan with flexible payback options.

    • 5.99% to 24.99%APR Range
    • 720Minimum Credit Score
    • $2,500 to $35,000Loan Amount Range
    • 36 to 84 monthsRepayment Terms
    • Next DayTime to Receive Funds

    Discover personal loans are ideal for those looking to fund projects or make purchases. It provides up to $35,000 in loans and next-day funding following application acceptance. Discover loans may be used to finance home improvements, weddings, medical expenses and vacations as well as for debt consolidation.

    However, Discover may not be suitable for all borrowers. For example, the firm only accepts candidates with a credit score of at least 720, so individuals with poor or no credit should go elsewhere. Furthermore, Discover is not for you if you want to borrow less than $2,500.

    Pros

    • Lengthy payback terms of up to seven years
    • No origination fees
    • Option to pay creditors directly
    • Loan payments made within 30 days are interest-free

    Cons

    • Restrictions on the usage of funds
    • Late payment fee
    • Low maximum loan amount
    • Loan amount: $2,500 to $35,000
    • Repayment terms: 36 to 84 months
    • Minimum credit score: 720
    • Time to receive funds: Next day
    Discover

APR Range

Lender
APR Range

LendingClub

7.04% to 35.89%

Discover

5.99% to 24.99%

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.

mglogo icon
MONEYGEEK’S VERDICT

In this comparison, Discover is the winner because it provides APRs as low as 5.99%, depending on the borrower's creditworthiness. Individuals with excellent credit will likely benefit the most from Discover's low APR. Those with stellar credit histories will get the most out of the lender’s low APR.

Remember that the overall cost of a loan is significantly impacted by its APR. A loan with a lower APR will accrue less interest and fees. A lower APR is preferred over a higher one because it lowers the total cost of the loan. Because of this, it's prudent to shop around and compare rates and terms from many lenders before choosing one.

Minimum Credit Score

Lender
Credit Score

LendingClub

600

Discover

720

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.

mglogo icon
MONEYGEEK’S VERDICT

In terms of credit score, LendingClub is accessible to more borrowers, as the lender has a lower minimum credit score requirement. However, those with lower credit scores will receive rates on the higher end of the range.

Loan Amount Range

Lender
Loan Amount Range

LendingClub

$1,000 to $40,000

Discover

$2,500 to $35,000

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.

mglogo icon
MONEYGEEK’S VERDICT

LendingClub provides a wider loan amount range than Discover, with personal loans ranging from $1,000 to $40,000. However, whether or not this will work for you depends on your requirements.

The loan amount is just one of several factors that you should look for in a lender. Before applying, you should thoroughly research a lender.

Repayment Terms

Lender
Repayment Terms

LendingClub

36 to 60 months

Discover

36 to 84 months

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.

mglogo icon
MONEYGEEK’S VERDICT

According to MoneyGeek's analysis, Discover has an advantage over LendingClub in this area due to its more flexible payback periods. It provides loan payback lengths ranging from 36 to 84 months, which might be useful for people that want to pay back their loan over a longer period of time.

Loans with shorter payback durations often have lower interest rates, but your monthly payment will be higher.

Time to Receive Funds

Lender
Time to Receive Funds

LendingClub

Next day

Discover

Next day

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.

mglogo icon
MONEYGEEK’S VERDICT

If you’re in a financial emergency, a fast disbursement time may be a significant advantage. Because of their next-day funding, LendingClub and Discover are both sound options for those in urgent need of funds. However, while quick turnaround times are preferable, they should not be your only consideration.

Final Thoughts

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.

Frequently Asked Questions About Personal Loan Lenders

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.

What documents do I need to provide to personal loan lenders?

How do I know what my credit score is?

Do lenders conduct a hard inquiry?

Are interest rates on personal loans the same for all lenders?

Do lenders charge fees for personal loans?

What are the advantages of applying for a personal loan online?

Is prepayment allowed on personal loans?

Read More on Personal Loans

About Christopher Boston

Christopher Boston headshot

Christopher (Croix) Boston was the Head of Loans content at MoneyGeek, with over five years of experience researching higher education, mortgage and personal loans.

Boston has a bachelor's degree from the Seattle Pacific University. They pride themselves in using their skills and experience to create quality content that helps people save and spend efficiently.

Read Full Bio »
sources
Shield Insurance

The content on this page is accurate as of the posting/last updated date; however, some of the rates mentioned may have changed. We recommend visiting the lender's website for the most up-to-date information available.

Editorial Disclosure: Opinions, reviews, analyses and recommendations are the author’s alone and have not been reviewed, endorsed or approved by any bank, lender or other entity. Learn more about our editorial policies and expert editorial team.

Insurance
Mortgage
Credit Cards
Loans
About MoneyGeekPressPrivacy PolicySitemap
Copyright © 2024 MoneyGeek.com. All Rights Reserved Terms of Use