LendingClub vs. American Express: Which Personal Loan Is Right for You?
Updated: July 25, 2023
Advertising & Editorial Disclosure
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.
LendingClub or American Express: Overview
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.
LendingClub
American Express
APR Range
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.
American Express has lower APRs than LendingClub. Low rates allow you to pay a smaller amount on your loan, helping you save money over time. It also helps ease the burden of paying off the loan since your monthly installments will be cheaper.
Your APR depends on several factors like your credit score, repayment terms and the current prime rate. When comparison shopping for a personal loan, it’s best to also evaluate other factors that can influence your needs and preferences.
Minimum Credit Score
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.
LendingClub has a lower credit score requirement than American Express. However, borrowers with bad credit — scores below 580 — may not qualify for these personal loans.
Your credit score affects the terms included in your loan agreement. Borrowers with bad credit will receive higher interest rates than those with good credit. Lenders also use your credit score to determine the loan amount and repayment terms to which you’re allowed.
Loan Amount Range
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.
LendingClub has a more flexible loan amount range since it has a lower minimum limit. Lenders that can provide smaller loans are best for borrowers that don’t need a substantial amount of money. However, if you need to fund a huge project, lenders that have bigger loan amount limits can accommodate your needs.
Before applying for a loan, you should understand why you’re taking out a loan and how much money you need. That way, you can easily choose the lender that offers the best loan terms for your situation.
Repayment Terms
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.
With repayment terms ranging from 24 to 84 months, American Express provides borrowers more repayment term options than its competitor. Shorter repayment periods are usually recommended because you’ll pay less in interest over the life of your loan. However, the best repayment term for you will be based on your ability to make monthly payments.
Time to Receive Funds
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.
In this category, American Express wins over LendingClub with its same-day funding. Choosing a lender with a shorter disbursement period is important to borrowers who need money right away. Instances such as emergencies, debt repayment and home repairs may all demand cash. Earlier fund release allows borrowers to urgently address these situations. While looking for a lender, the disbursement time should be taken into consideration, along with other aspects of the loan.
Final Thoughts
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.
Frequently Asked Questions About Personal Loan Lenders
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.
Your identification, residence confirmation, proof of income or employment and other documentation may be requested by personal loan lenders. These will help them determine your eligibility for a loan and verify the details included in your application.
Your credit score may be shown on your loan or credit card statements. Additionally, you can pay to check your credit score at the three major credit agencies or obtain it for free from the Annual Credit Report website.
Some lenders allow you to check your rates with only a soft credit check. However, if you decide to move forward with your application, certain lenders will perform a hard inquiry which can affect your credit score.
No, all lenders have different interest rates. Factors such as your credit rating, the prime rate and the lender you choose affect the interest rate of your loan.
Yes, but there may be fees that are waived by your lender. Your loan agreement or the fine print states all the fees associated with your loan.
Online applications are faster and more convenient if you have all the required documentation. Additionally, your application may be accepted sooner than an in-person application.
You may be able to pay off your loans early, but some lenders impose prepayment penalties.
sources
- American Express. "American Express Personal Loans." Accessed September 20, 2022.
- American Express. "Frequently Asked Questions." Accessed September 20, 2022.
- LendingClub. "Personal Loans Rates & Fees." Accessed September 19, 2022.
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.