In today’s world, there are numerous loan providers catering to different financial needs, making it essential to compare options before making a decision. Two popular names in the lending space are LendingClub vs Ascent Funding. Both companies offer loans, but they have distinct differences in terms of loan offerings, interest rates, borrower requirements, and customer service. This guide will explore LendingClub vs. Ascent Funding to help you make an informed decision when selecting a loan provider.
Overview of LendingClub
LendingClub is one of the largest peer-to-peer lending platforms in the United States. Founded in 2007, LendingClub connects borrowers directly with individual investors who are looking to fund loans. The company offers a variety of loan types, including personal loans, business loans, and auto refinancing.
LendingClub is well-known for its personal loans, which are typically unsecured loans designed for borrowers who need funds for various purposes, such as debt consolidation, home improvements, medical expenses, or large purchases.
Key features of LendingClub:
- Loan Amounts: LendingClub offers personal loans ranging from $1,000 to $40,000.
- Loan Terms: Loan terms vary between 36 to 60 months.
- Interest Rates: Rates typically range from 6.95% to 35.89% APR.
- Origination Fees: LendingClub charges an origination fee ranging from 1% to 6% of the loan amount, depending on the borrower’s creditworthiness.
- Credit Score Requirements: Generally, borrowers with a 600+ credit score may qualify for a loan, though better rates are available for those with higher credit scores.
- Eligibility: Borrowers must meet certain credit and income requirements. LendingClub primarily serves borrowers with good to excellent credit.
- Loan Purpose: Loans can be used for almost any purpose, including debt consolidation, medical bills, and home improvements.
Pros of LendingClub:
- Flexible Loan Use: Borrowers can use the loan for a wide range of purposes.
- Competitive Rates: For those with good credit, LendingClub offers relatively competitive interest rates.
- Peer-to-Peer Lending: LendingClub connects borrowers to individual investors, which can sometimes result in better terms compared to traditional banks.
- Transparent Process: LendingClub provides a clear overview of the loan application process, fees, and terms.
Cons of LendingClub:
- Origination Fees: LendingClub charges origination fees that can be a significant cost for borrowers.
- High Rates for Poor Credit: Borrowers with lower credit scores may be subject to higher interest rates, sometimes as high as 35.89%.
- Limited Loan Amounts: While LendingClub offers loans up to $40,000, it may not be sufficient for larger financial needs, such as major home renovations or big business expenses.
Overview of Ascent Funding
Ascent Funding is a newer player in the lending space, founded with a focus on providing education financing and private student loans. Unlike LendingClub, Ascent Funding is not a peer-to-peer lender but operates as a more traditional private loan provider. Ascent primarily serves students, offering student loans, refinancing options, and cosigned loans. However, the company does provide personal loans for those who meet the eligibility criteria.
Ascent Funding offers two primary types of loans:
- Student Loans: Ascent offers private student loans for undergraduate, graduate, and professional school students.
- Personal Loans: Ascent also offers personal loans, which can be used for various purposes, such as debt consolidation, medical expenses, and home improvements.
Key features of Ascent Funding:
- Loan Amounts: Ascent offers personal loans ranging from $2,000 to $50,000.
- Loan Terms: The terms for personal loans range from 24 to 84 months.
- Interest Rates: Rates range from 4.45% to 25.99% APR, depending on the borrower’s credit score and loan type.
- No Fees: Ascent does not charge any origination fees, which sets it apart from many competitors, including LendingClub.
- Credit Score Requirements: Ascent provides loans to borrowers with a credit score starting at 620, although the best rates go to those with a credit score above 700.
- Cosigner Option: For borrowers with limited credit history, Ascent offers the ability to apply with a cosigner, which can help secure better loan terms.
Pros of Ascent Funding:
- No Origination Fees: Ascent stands out by offering loans with no origination fees, which reduces the overall cost of the loan.
- Longer Loan Terms: Ascent offers personal loans with terms up to 84 months, which is an advantage for borrowers who prefer smaller monthly payments.
- Competitive Rates for Good Credit: Ascent offers relatively competitive interest rates for borrowers with good credit, starting at 4.45% APR.
- Cosigner Option: If you have limited credit or no credit history, applying with a cosigner can significantly improve your chances of approval and lower your interest rate.
- Student Loan Financing: Ascent provides a range of options for student loans, making it a solid choice for those seeking financing for higher education.
Cons of Ascent Funding:
- Limited Loan Types: While Ascent offers both personal and student loans, it doesn’t have the breadth of loan products available through lenders like LendingClub, such as business loans or auto refinancing.
- Higher Rates for Poor Credit: For those with lower credit scores, Ascent’s rates can be higher, though not as steep as LendingClub’s.
- Fewer Loan Uses: Ascent’s personal loans have more restrictive use cases compared to LendingClub’s, with fewer flexible options for borrowers.
Key Differences Between LendingClub vs Ascent Funding
- Loan Types:
- LendingClub offers a wide range of personal loans and business loans, making it a versatile option for those looking for flexibility.
- Ascent Funding focuses primarily on student loans and personal loans, offering fewer products overall but with some unique features for student borrowers.
- Origination Fees:
- LendingClub charges origination fees ranging from 1% to 6%, which can add to the cost of borrowing.
- Ascent Funding, on the other hand, does not charge any origination fees, which can be a significant advantage for borrowers.
- Interest Rates:
- LendingClub has interest rates that range from 6.95% to 35.89% APR for personal loans, which is higher for borrowers with poor credit.
- Ascent Funding offers a broader range, with rates from 4.45% to 25.99% APR, and also offers better rates for good credit borrowers.
- Eligibility Requirements:
- LendingClub generally requires a 600+ credit score for personal loans, though higher credit scores will yield better rates.
- Ascent Funding has a slightly lower credit score requirement for personal loans, starting at 620. For student loans, eligibility depends on enrollment in school and other factors.
- Loan Amounts:
- LendingClub offers loans from $1,000 to $40,000.
- Ascent Funding offers loans from $2,000 to $50,000, which provides a slightly higher upper limit on personal loans.
Which Loan Provider is Better for You?
Ultimately, the best loan provider depends on your specific needs and financial situation. Here’s a breakdown of which provider might be better for different borrower types:
- For Personal Loans:
- If you’re looking for a wide range of loan products, including debt consolidation, medical expenses, or home improvement, LendingClub offers the versatility of both personal and business loans.
- However, if you’re looking for lower fees and longer terms, Ascent Funding might be a better choice, especially since it doesn’t charge origination fees and offers loan terms up to 84 months.
- For Students:
- If you need student loans or are seeking student loan refinancing, Ascent Funding stands out as a great option. It’s tailored to students, offering flexible options for borrowers with and without cosigners.
- For Borrowers with Poor Credit:
- LendingClub may be better suited for borrowers with less-than-perfect credit, as it works with borrowers starting at 600 and offers a range of loan products. However, interest rates may be higher.
- Ascent Funding may offer slightly better terms, but it also has higher rates for lower credit scores. However, applying with a cosigner can improve your chances of receiving better terms.
When comparing LendingClub vs. Ascent Funding, both have their advantages and drawbacks. LendingClub is a better fit for borrowers seeking flexibility and a wider variety of loan products, including business loans. On the other hand, Ascent Funding stands out for its focus on student loan financing and the absence of origination fees, which could save you money over the life of the loan. The decision between these two loan providers ultimately depends on your
