Surprisingly fast approval with Lending Club?

Anonymous · ‎02-21-2018

I got a pre-approved loan offer from Lending Club earlier this month, and decided to take a look and see what I might be able to get from them last week (2/13). I typed in a couple of possible figures and got a preliminary approval for them after setting up my account, then went back and thought carefully about it for the next week or so (among other things, I was waiting for a raise I've been expecting to be confirmed, which I got yesterday, and also wanted to plan out just how I was going to use the loan to consolidate my credit card balances and pay off old back taxes). I decided to pull the trigger on completing the application earlier this morning, got the "final review" notification on my account main page after confirming my email and signing off on the loan documents, logged out, and about an hour and a half later, logged back in and saw the "Woo-hoo! You've been approved!" message. The funds are expected to disburse to my chosen bank account within 4 business days.

I'm a bit surprised, actually, as to how fast the loan was approved and funded. I was expecting to have to wait a week or so for the investors to chip in and the review process to complete. I assume that this must actually mostly have taken place during the week between my first steps and completing the application this morning, or that everything was lined up just waiting for me to complete the application. Has anyone had a similar experience with Lending Club on unexpectedly rapid approvals?

UPDATE: Just now (12:25 pm Eastern) got the official email from them advising that my loan has been approved and funded by investors and the funds will be disbursed within the next few business days. As I said, astonishingly fast - I was expecting to have to wait until next week!

redE2move · ‎02-21-2018

Do you mind sharing data points? Where did they pull from, your scores at app, etc. Did you get the amount you requested? Was income a factor? Do they provide minimum qualifications for approval?

Anonymous · ‎02-22-2018

@redE2movewrote:
Do you mind sharing data points? Where did they pull from, your scores at app, etc. Did you get the amount you requested? Was income a factor? Do they provide minimum qualifications for approval?

Lending Club pulled TU (SOFT pull only, not hard - I watched all day yesterday to see if any hard pulls had been triggered on TU or EX, which are the two bureaus LC reports to, but nothing popped up). My score on 2/13, when I started the application process, was 665; from what I understand Lending Club requires a minimum TU of 640. They did request gross income as part of the initial process of calculating my rate and amount eligibility. I got the full amount I applied for, less origination fee (Lending Club always deducts a small amount for this purpose, the percentage varying according to your credit level; in my case, it was 6%. It's recommended to tack on enough extra to cover the origination fee if you're looking for a specific amount).

I also want to note that the funds disbursed into my checking account early this morning, less than 24 hours after approval! I've already started the process of paying off my card balances and have put a little extra into savings.

EDIT: I did in fact get a hard pull on TU after all - for some reason the inquiry didn't post until today, but CreditWise and Credit Karma just alerted me. Oh well, that ding should go away once the payoffs register on my report.

Appleman · ‎02-22-2018

Congrats on the quick approval process. There are times with Lending Club that a larger investor/group will pick up a larger portion of your loan as part of the portfolio.

You can expect a nice increase in credit scores if utilization was holding down your score.

Anonymous · ‎03-07-2018

@Applemanwrote:
Congrats on the quick approval process. There are times with Lending Club that a larger investor/group will pick up a larger portion of your loan as part of the portfolio.

You can expect a nice increase in credit scores if utilization was holding down your score.

Just wanted to update - yep, my scores are already beginning to trend up as I pay off the card balances. The loan has reported as of March 7 (just checked MyBankRate.com) as a regular installment loan, which should help (I know the bureaus like installment loans).

Dalmus · ‎03-07-2018

Missed this earlier, but as for the speed of the funding, many investors have automated their investment process, so that if a new oppurtunity comes up that matches certain criteria, it will automatically be invested in with no interference from the human with the wallet.

Current FICO 8 Scores: EQ: 828| TU: 805 | EX: 814

Anonymous · ‎03-14-2018

Reading their site. Interesting concept. Considering the average interest rate there is 14%, you were definitely in their "grade A" risk catetory, for those investors looking for low-risk.

They explain the gist of investing:

14% average interest rate in portfolio

- 8% estimated charge-offs and prepayments

- 1% Lending Club fees

-------

= 5% Annualized Net Return (historical average)

The Adjusted Net Annualized Return currently averages 3.6%, at an average portfolio age of 15 months. Seems pretty crummy. After an initially higher rate of return, it generally declines within a few months. Hilarious how they jump right in to explaining how your returns on any individual loan quickly decline as people default, so you should keep reinvesting to gather new notes on new loans, to balance things out.