SoFi vs. LendingClub: Which offers better personal loans?

SoFi gives borrowers with strong credit access to large personal loan amounts and longer terms than LendingClub. LendingClub is better if you have a score as low as 600 and 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 even 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 loans with APRs and standard terms for most personal loan companies. However, each caters to very different borrowers.

SoFi personal loan

Best for large loan amounts and long terms

Bankrate’s view

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 7 p.m. ET on a business day. That makes SoFi a great choice for large home improvement projects, or to buy inventory for a profitable side hustle.  The 84-month maximum term is longer than the 60-month limit set by other lenders, which helps lower the payment by spreading out over a couple of extra years.

SoFi allows joint applications to help you qualify for large loan amounts, which may help you afford the payment in a shorter term to reduce the total interest you pay on a loan. The company offers an excellent online experience through its website and mobile app, and customer support is available seven days a week. On the negative side, the minimum loan amount of $5,000 is higher than competitors and bad credit borrowers won’t qualify.

Pros

• Six-figure loan amount maximum
• Co-borrowers accepted
• Terms up to 7 years

Cons

• No options for bad credit score borrowers
• Steep minimum loan amount
• More stringent qualifying requirements

LendingClub personal loans

Best for fair credit debt consolidation loans

Bankrate’s view

Bankrate users choose LendingClub loans to borrow an average of just over $19,400, and nearly three-quarters of them used the funds to consolidate debt. The lender will even pay your creditors directly, saving you the hassle of tracking the payments to your creditors on your own.

With a credit score minimum of 600, fair credit borrowers can qualify for a loan that doesn’t meet SoFi’s higher credit score minimum requirements. LendingClub’s minimum $1,000 loan amount also makes it the right match for smaller lending needs, although you can qualify for higher loan amounts with the help of a co-borrower.

Pros

• Lower credit score minimum
• Co-borrowers accepted
• Smaller loans available

Cons

• Origination fees of up to 8 percent
• Higher interest rate caps
• 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 each has very different strengths and weaknesses. Knowing the differences will help you decide between the two.

APR range

The starting APRs for both lenders are almost identical, with LendingClub coming just a fraction lower on the minimum.  However, SoFi is the clear winner for the lowest maximum APR, falling just below 30 percent. The higher maximum rate at LendingClub is likely because it caters to borrowers with lower credit scores than SoFi.

Minimum credit score

You’ll need at least a 680 credit score at SoFi, which makes sense, considering the lender allows you to borrow up to $100,000. 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 strategy for consolidating debt to improve your credit utilization ratio and credit score.

Repayment terms

If your credit score is solid, you may qualify for a SoFi loan term as long as seven years, a few years longer than the five-year maximum you find at most personal loan lenders, like LendingClub. Both lenders allow you to add a co-borrower, which could help you qualify for the 24-month repayment minimum term each offers.

Time to receive funds

The fast-funding award goes to SoFi, which offers same-day cash potential if you sign all your paperwork by 7 p.m. ET on a regular business day. LendingClub doesn’t publish its turn times, but Bankrate data shows users who have taken out a loan receive their funds within 3.9 days. The longer funding times may be due to LendingClub’s focus on debt consolidation loans, which can take longer to ensure they can pay off all the creditors as quickly and efficiently as possible.

Fees

SoFi has a unique approach to fees that allows you to choose an APR with no fees or opt for a lower one by paying origination fees. How much 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 fees run between 3 and 8 percent of the amount borrowed, making it a more expensive option than SoFi.

The bottom line: Which lender is best?

SoFi is a better choice for large loan amounts if you’ve got great credit and need more repayment term options for your borrowing. You have the added benefit of adding a co-borrower’s income to help qualify and customer service support 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 is a good match. If you want to knock out those debts with a shorter term, you can also add a co-borrower to boost your odds of approval.

That said, these two lenders are just a few of your borrowing options. Compare rates from other lenders before committing to one. This will ensure you’re getting the best deal possible for your situation.

LightStream personal loans

Best for fast funding

PenFed personal loans

Best for small loan amounts