About a year and a half ago I applied for an unsecured loan from Lending Club. I had just moved out post-divorce and was stretched a bit thin. This was more or less to "keep the lights on" until I had finished my transition.
My credit at the time was pseudo-garbage. FICOs were low-mid 5s, inquries out my ears (thanks, XW--a sad story, really) and UTL in the 90s. They approved me for a $5000 loan minus origination fees and the like at 30% interest. Pretty steep, but I had landed a good job so the $215/month payment over 3 years was stomachable.
Around this time I had also financed a new apartment's worth of furniture (cheaper, including interest) than moving all my existing stuff from California to Washington). $3500 in goods at 30% as well, 42 months. Plus I got new stuff and more on-time payments on my credit reports. What's not to like?
Fast forward to this last week and I applied for another loan. Since my credit has improved significantly (though still has a ways to go) I was approved for half the rate (14%). I asked for $7300 because after the origination fees and the like, I'd be left with $6800 and change. This would be enough to pay off my existing Lending Club loan, the remainder of my furniture purchase, and have some money left over for tax payments or higher-interest credit card payments (just about enough to bring my UTL under 9%). Either way, I go from paying $215+$120+$250 (LC, Furniture, Taxes) a month to a single $249/month payment, a savings of $336/month for the next 6 months and $86/month thereafter (not counting potential zeroed cards and their eventual absent payments).
All I'm waiting on now is for them to review my income documents (W2 from 2017 and last 2 stubs), something they did last time, and I should be set.
Thinking farther into the future, if I pay more than the minimum, say $350, I cut a year off the loan time, save about $700 in interest, and I'm paying the amount off quicker than I would if I was paying both higher interest loans separately while only paying $12 more a month in total.
Just thought I'd share this story. When I hear back from LC about my loan status, I'll update this thread.
Update: I logged in to LC's site just after posting this and they approved my loan. I'll have the funds in 4 business days!
@jl4 read you PM(personal message). Anyways long story short you edited your post a ton of times and was caught up by the spam filter as a result. It has been restored.
Until just reading your post I've never heard of lending Club anyways looks as if everything is in order Congrats!.
Definitely pay as much as you can each month. The more you accelerate the payments, the less in interest per month you will pay, as you figured out.
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Oh for sure! I'd pay more but I'm also upping my 401k contribution and creating a small cash pile in a high-interest savings account for a home down payment.
If only I could print money... 😄