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

To help you decide between LendingClub and American Express, MoneyGeek gathered key information about both companies. MoneyGeek continues to be a reliable source of information, helping you compare the most well-known personal loan providers in the United States. At MoneyGeek, we strive to provide consumers with up-to-date information on lenders’ personal loan terms.

LendingClub provides loans for borrowers with bad credit, those who require smaller loans and those who need the money as soon as possible. On the other hand, American Express cardholders are only eligible for this lender’s lower APRs and flexible repayment terms.

MoneyGeek compared LendingClub and American Express based on their benefits, drawbacks and other important personal loan details. LendingClub offers loans for borrowers with lower credit scores as well as those who need smaller loans and funds quickly. American Express offers more accommodating repayment options and lower APRs but only for American Express cardholders.

By comparing these lenders, we can help you decide which lender to choose. This information also allows you to consider whether these lenders meet your needs and preferences.

The annual percentage rate (APR) is the percentage of interest you’ll pay for your loan on an annual basis. Along with the interest, this rate includes fees that may be associated with your loan. The Truth in Lending Act mandated that your APR be disclosed in your loan agreement. More importantly, it outlines what you’re paying for as you repay your loan.

LendingClub offers loans with APRs ranging from 7.04% to 35.89%. American Express has lower APRs, from 4.93% to 19.97%. A lower interest rate translates to less money spent over the life of your loan, as you’ll accrue less in interest. Your APR will be determined based on factors like your credit score and loan repayment term.

To qualify for personal loans, borrowers should have a credit score of 600 for LendingClub and 660 for American Express. Since LendingClub has a lower minimum credit score requirement, they’re more likely to accept loan applicants without an outstanding credit profile. In addition to a minimum credit score requirement, LendingClub may factor in other references for creditworthiness.

Lenders use your credit score to assess your financial responsibility and stability. Some factors that affect this score are your credit history, existing debts, income and credit history.

Borrowers with high credit scores are more likely to be granted a loan compared to those with low credit. Additionally, borrowers with good credit receive lower interest rates, which reduce the overall cost of your loan.

These limits determine the loan amount that you can borrow from a lender. The loan amount is a major factor to consider because it helps you know if the lender can accommodate your financial needs. For example, if you need a loan of more than $40,000, these lenders may not be the best fit for you.

Both LendingClub and American Express have a maximum loan amount of $40,000 for their personal loans. However, LendingClub can give you smaller loans as the amount for its loans start at $1,000, whereas American Express starts at $3,500. If you need a loan for smaller expenses, LendingClub may be your best option.

Repayment terms specify how long it will take you to repay your loan, in addition to the number of monthly installments you’ll have to pay. You can navigate your potential rates and monthly installments with a lender that gives you more options for repayment terms.

The repayment terms that are available to you depend on your creditworthiness, loan amount and other personal factors. Additionally, choosing the best repayment term for your circumstances can positively affect your loan approval.

American Express offers repayment terms of 24 to 84 months, while a LendingClub personal loan can be repaid within 36 to 60 months. Since American Express offers a wider range of loan terms, it’s more versatile for different borrowers’ needs.

LendingClub can release your funds the next day after your loan is approved. Meanwhile, American Express can release your funds on the same day.

However, it’s important to note that funds can be released a bit earlier or later since these disbursement times are only an average. Fund disbursement time can be influenced by certain situations, such as the submission of extra documents and the means of receiving your funds.

For example, online applications can be approved more quickly than those made in person. As a result, funds are released faster.

If you need money as soon as possible, it’s best to choose a lender with a shorter disbursement time. In this case, American Express releases funds faster than LendingClub.

Because LendingClub personal loans are more widely available than those offered by American Express, MoneyGeek chose it as the better lender. LendingClub provides modest personal loan amounts to borrowers with lower credit scores. This is an ideal option for borrowers that need smaller loan amounts as well as those who need funds urgently.

American Express, on the other hand, has lower APRs and more flexible repayment terms. This potentially reduces the cost in interest that someone will pay on their own and allows borrowers to choose a repayment term that best fits their needs. However, American Express personal loans are only available to American Express cardholders.

Ultimately, the best lender for you will depend on your unique situation. Your credit score, for example, will impact your APR, loan amount and repayment terms. In this case, whether or not you own an American Express card can affect your options. Therefore, your personal and financial circumstances are important things to consider when choosing a lender.

To help you learn more about application procedures, fees and other factors about personal loans and lenders, MoneyGeek provided answers to questions frequently asked by borrowers.