Generally speaking, we recommend OneMain Financial for borrowers with poor credit scores under 620 and LendingClub for borrowers with stronger credit scores above 640. Borrowers with good credit will typically obtain lower rates with LendingClub, while borrowers with poor credit will have an easier time qualifying for funding with OneMain Financial.
OneMain Financial vs LendingClub
Both lenders limit loan terms to five years and cap their interest rates at around 36%, however, the similarities end there. Borrowers who need larger loan amounts will be better off with LendingClub, which offers up to $40,000 in financing—about a third more than the limit imposed by OneMain Financial.
Borrowers who need funding quickly may prefer OneMain Financial, as the lender can provide same-day funding for applications approved before noon. Applicants who prefer an online-only process will be better off with LendingClub, as OneMain Financial requires you to visit a branch to complete your application.
|OneMain Financial||LendingClub (Read Review)|
|Amounts||$1,500 - $30,000||$1,000 - $40,000|
|Rates||16.05% - 35.99%||6.16% - 35.89%|
|Terms||2 to 5 years||3 or 5 years|
|Funding Time||1+ days||6 days on average or sooner|
|Apply Now||Apply at OneMain Financial||Apply at LendingClub|
How to Qualify
Borrowers applying for a loan with LendingClub should aim for a credit score of 640 or higher. This is because LendingClub is a marketplace lending partner, and its loans are contingent on the availability and risk appetite of investors. Investors may be less willing to fund riskier loan applications, so approved borrowers with shaky credit can sometimes fail to receive funding or receive less than their requested amount.
We believe OneMain Financial is better suited for borrowers with poor credit scores. OneMain Financial issued almost half of its loans to people with credit scores below 620 in 2016, which indicates a greater likelihood of approval for borrowers with poor credit. The lender exercises greater discretion over its loan-approval process as a direct lender, and borrowers can improve their applications by including co-borrowers, co-signers or collateral.
How to Choose Between the Two
While OneMain Financial and LendingClub offer similar loan products, their personal loans differ in terms of application process, loan amounts, interest rates and credit requirements. We take a look at specifics below.
If you have a poor credit score, consider OneMain Financial. In 2016, almost half of OneMain Financial's personal loans were issued to borrowers with credit scores under 620. OneMain Financial is willing to work with low-credit borrowers and caps its interest rates at 35.99%. Borrowers on the verge of qualifying or who wish to improve the strength of their applications can secure their loans with collateral or a co-signer. In fact, over 40% of the personal loans issued in 2016 were secured by some form of collateral. We recommend OneMain Financial for borrowers with poor credit scores, but prospective applicants can shop around with other lenders that specialize in low-credit lending.
If you have good credit or excellent credit, consider LendingClub. The interest rates on OneMain Financial's personal loans have a lower bound of 17.59%, which is much higher than what most creditworthy borrowers can qualify for. LendingClub offers interest rates as low as 5.99% for qualifying borrowers. If you have good to excellent credit, we recommend getting a free quote from LendingClub or even other low-rate lenders such as SoFi and Earnest.
If you need funding quickly, consider OneMain Financial. One of the shortcomings of LendingClub's marketplace is that it typically requires borrowers to wait seven days or more for funding. By comparison, OneMain Financial is able to issue loans directly and in some cases, can disburse funds on the day of your application.
If you want to borrow more than $25,000, consider LendingClub. OneMain Financial caps its permitted loan amount at $25,000. By contrast, LendingClub allows applicants to apply for loan amounts up to $40,000. Borrowers should be aware that the amount they can qualify for is contingent on their debt-to-income ratio, which is a measure of an individual's outstanding debts relative to their income.
If you need more flexibility in loan terms, consider OneMain Financial. LendingClub only offers two loan terms for borrowers: Its best rate option is for three years and its lowest monthly payment option is five years. Alternatively, OneMain Financial offers loan terms of two, three, four and five years and allows borrowers to strengthen their applications by including a co-borrower or posting collateral.
If you want an end-to-end online application, consider LendingClub. OneMain Financial requires applicants to visit a branch to complete their loan application. This may be an inconvenience for borrowers who live far away from a OneMain Financial branch. LendingClub is an online marketplace lender that requires no in-person visit to apply. Additionally, LendingClub allows you to obtain an online rate quote without requiring a hard credit check.