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SoFi vs. LendingClub: Which offers better personal loans?

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SoFi and LendingClub are two websites where borrowers can apply for personal loans.

SoFi began in 2011 as a student-focused lender but has since expanded to offer more than just student loans. Today, it offers banking and investing services alongside a variety of loans. LendingClub was founded in 2006 as one of the first peer-to-peer lending websites. In 2020, the company acquired Radius Bank and shut down its peer-to-peer platform to become a more traditional bank and lender.

If you are deciding on these two lenders, comparing them will help you make your decision.

SoFi vs LendingClub at a glance

Both lenders offer good personal loans that can help in a variety of financial situations. However, there are important differences between them that make it important to choose the right lender for you.

SoFi LendingClub
Bankrate Score 4.6 4.4
Better for Borrowers with strong credit

Large loan amounts

Borrowers with fair credit
Loan amounts $5,000 – $100,000 $1,000 – $40,000
APRs 5.74% – 21.78% 6.34% – 35.89%
Loan term lengths 2 to 7 years 3 or 5 years
Fees None Origination fee: 2% to 6%
Minimum credit score 680 600
Requirements US citizen, permanent resident, or non-permanent resident alien

Employed and with sufficient income, or written offer for employment to start within 90 days

US citizen or long-term visa holder

Have a verifiable bank account

Time to funding Within a few days Within two days
Cosigners permitted Yes Yes

SoFi personal loans

SoFi got its start as a student-focused lender but offers many types of loans today. You can also bank and invest with SoFi. If you’re already taking advantage of SoFi’s other offerings, it might be convenient to borrow from SoFi and keep your money in one place.

One thing to consider is that despite SoFi’s higher minimum credit score requirement, the lender is known for working with borrowers that have thin credit files. If you’re new to having credit, SoFi might give you a better deal. It also keeps its loans fee-free, which may save you money.

SoFi also gives borrowers more flexibility when it comes to the term of the loan. Shorter loans are more expensive on a monthly basis but will save you money overall. Longer-term loans have lower payments but cost more in the long run, letting you prioritize what’s important to you.

Pros

  • Qualify with a short credit history
  • No fees
  • More options for loan term
  • High loan maximum

Cons

  • Higher credit score requirement
  • Must be employed or able to prove income

LendingClub personal loans

LendingClub began as a peer-to-peer lending platform but recently transitioned to be a more traditional bank and lender. It stands out thanks to its lower credit score requirements, meaning more borrowers will be eligible for a loan.

However, loans from the site tend to be more expensive than SoFi’s, carrying higher interest rates and fees, including an origination fee. That can make it a hard sell to go with LendingClub if you’re eligible for a loan from SoFi.

Pros

  • Lower credit score requirement
  • Employment not required

Cons

  • Higher fees
  • Higher interest rates
  • Lower maximum loan amount

How to choose between SoFi and LendingClub

SoFi and LendingClub are both good choices if you need a personal loan, but excel in different scenarios.

If you want to borrow a large amount, consider SoFi. SoFi offers loans up to $100,000 making it the better choice if you need to pay a large bill or fund an expensive project.

If you need a small boost of cash, consider LendingClub. By contrast, LendingClub offers loans as small as $1,000, making it the better lender if you only need a small amount of cash.

If you want more flexibility, consider SoFi. SoFi offers more options when it comes to the term of your loan, letting you take more or less time to repay it. That makes it much easier to customize your monthly payment to fit your budget.

If you have fair, but not excellent credit, consider LendingClub. LendingClub has a lower minimum credit score requirement, which means you might still be eligible for a loan if SoFi won’t approve your application.

If you want the cheapest loan, consider SoFi. SoFi does not charge an origination fee and has lower rates than LendingClub. While it isn’t guaranteed, the odds are good that SoFi’s loan will be less expensive overall.

Bottom line

Both SoFi and LendingClub can be a good choice for lenders, but SoFi may be the better of the two for most people. Its loans are more flexible and carry fewer fees and potentially lower rates. If you’re eligible for a SoFi loan, there’s a good chance it’ll be the better deal.

Still, applying for a loan from LendingClub isn’t a bad idea because it will let you compare your offers. You may also find LendingClub to be a willing lender when SoFi isn’t.

Written by
TJ Porter
Contributing writer
TJ Porter is a contributing writer for Bankrate. TJ writes about a range of subjects, from budgeting tips to bank account reviews.
Edited by
Loans Editor, Former Insurance Editor