Loan Approval Timelines: How Long for LendingClub?

Quick answer

• LendingClub loan approval can take anywhere from a few minutes to several business days.
• The initial pre-qualification is often very fast, sometimes immediate.
• Full approval requires verification of your financial information and can take longer.
• Factors like application completeness and applicant history significantly influence the timeline.
• Funds are typically disbursed within a few business days after final approval.
• For the most accurate estimate, it’s best to complete the application and check LendingClub’s current processing times.

What to check first (before you choose a payoff plan)

Balance and rate list

Before diving into payoff strategies, gather all your loan information. This means listing every debt you have, including the current outstanding balance, the interest rate (APR), and the minimum monthly payment for each. Having this clear picture is the foundation for any effective debt reduction plan.

Minimum payments

Understand what your minimum monthly payments are for all your debts. While it’s tempting to only focus on high-interest debts, consistently making at least the minimum on all accounts is crucial. Missing payments can lead to late fees and significant damage to your credit score.

Fees or penalties

Review your loan documents for any potential fees or penalties associated with early repayment or specific payoff methods. Some loans might have prepayment penalties, though this is less common with personal loans. Knowing these details upfront can prevent unexpected costs.

Credit impact

Consider how different payoff strategies might affect your credit score. While paying down debt is generally good for your credit, aggressive strategies or actions like consolidating loans can have short-term impacts. Understand how your choices align with your long-term credit goals.

Cash flow stability

Assess your current cash flow and budget. Before committing to an aggressive payoff plan, ensure it’s sustainable. You need to make sure you can comfortably meet your essential living expenses while also allocating funds towards debt repayment. A plan that strains your budget too much is unlikely to be successful.

Loan Payoff Plan: Step-by-Step

Here’s a structured approach to tackling your debt:

1. Gather All Debt Information:

• What to do: Create a detailed list of all your debts, including credit cards, personal loans, auto loans, and any other liabilities. For each, record the current balance, interest rate (APR), and minimum monthly payment.
• What “good” looks like: A comprehensive spreadsheet or document with all your debt details readily available.
• Common mistake and how to avoid it: Forgetting about smaller debts or store credit cards. Avoid this by thoroughly checking bank statements and credit reports.

2. Calculate Total Debt and Monthly Payments:

• What to do: Sum up all your outstanding balances to understand your total debt load. Also, sum your minimum monthly payments to know the baseline you must cover each month.
• What “good” looks like: A clear understanding of your total debt amount and your absolute minimum monthly outgoing for debt.
• Common mistake and how to avoid it: Underestimating the total amount owed. Avoid this by double-checking your calculations and ensuring all debts are included.

3. Determine Your Budget and Available Debt Payment Funds:

• What to do: Create or review your monthly budget to identify how much money you can realistically allocate towards debt repayment beyond your minimum payments.
• What “good” looks like: A realistic budget that shows a surplus you can dedicate to accelerating debt payoff.
• Common mistake and how to avoid it: Overestimating how much extra you can pay. Avoid this by being honest about your expenses and sticking to your budget.

4. Choose a Payoff Strategy (Snowball or Avalanche):

• What to do: Decide between the Debt Snowball (pay smallest balance first for psychological wins) or the Debt Avalanche (pay highest interest rate first to save money).
• What “good” looks like: A clear decision on which method best suits your personality and financial goals.
• Common mistake and how to avoid it: Switching strategies mid-way. Avoid this by committing to one method for at least a few months to see its effectiveness.

5. Implement Your Chosen Strategy:

• What to do: Make minimum payments on all debts except the target debt. Put any extra funds towards your chosen target debt (smallest balance for Snowball, highest APR for Avalanche).
• What “good” looks like: Consistent extra payments are being made to your target debt each month.
• Common mistake and how to avoid it: Not consistently applying extra payments. Avoid this by automating extra payments or setting clear reminders.

6. Attack the Target Debt:

• What to do: Focus all your extra payments on the debt you’ve identified as your target (either the smallest balance or the highest interest rate).
• What “good” looks like: Your target debt balance is decreasing significantly faster than others.
• Common mistake and how to avoid it: Splitting extra payments across multiple debts. Avoid this by directing all extra funds to the single target debt.

7. Celebrate Wins and Stay Motivated:

• What to do: Acknowledge and celebrate when you pay off a debt or reach a significant milestone. This helps maintain momentum.
• What “good” looks like: You feel encouraged and motivated to continue your debt payoff journey.
• Common mistake and how to avoid it: Getting discouraged by slow progress. Avoid this by celebrating small victories and reminding yourself of your long-term goals.

8. Reallocate Payments When a Debt is Paid Off:

• What to do: Once a debt is fully paid, take the money you were paying on it (minimum payment plus any extra) and add it to your extra payment for the next target debt.
• What “good” looks like: Your debt payoff accelerates as you “roll over” payments.
• Common mistake and how to avoid it: Spending the money freed up by a paid-off debt. Avoid this by immediately redirecting those funds to the next debt on your list.

9. Consider Debt Consolidation or Balance Transfers (If Applicable):

• What to do: Explore options like personal loans or balance transfer credit cards to consolidate multiple debts into one, potentially at a lower interest rate.
• What “good” looks like: Simplified payments and a lower overall interest cost.
• Common mistake and how to avoid it: Not factoring in fees or the introductory period’s end. Avoid this by carefully reading the terms and understanding the post-introductory rate.

10. Review and Adjust Regularly:

• What to do: Periodically (e.g., quarterly) review your debt payoff progress and your budget. Adjust your plan if your income or expenses change.
• What “good” looks like: Your debt payoff plan remains relevant and effective for your current situation.
• Common mistake and how to avoid it: Sticking rigidly to a plan that no longer fits. Avoid this by scheduling regular check-ins and being flexible.

Options and Trade-offs

Here are common debt payoff options and their trade-offs:

• Debt Snowball: Pay off debts from smallest balance to largest, regardless of interest rate.
• When it fits: Best for individuals who need quick wins and motivation. The psychological boost of paying off accounts quickly can be very effective.
• Debt Avalanche: Pay off debts from highest interest rate to lowest, regardless of balance.
• When it fits: Ideal for those who want to minimize the total amount of interest paid over time. This method is mathematically the most efficient.
• Debt Consolidation Loan: Take out a new loan to pay off multiple existing debts, resulting in a single monthly payment.
• When it fits: Useful if you can secure a loan with a lower interest rate than your current average, simplifying payments and potentially saving money on interest.
• Balance Transfer Credit Card: Move balances from high-interest credit cards to a new card, often with a 0% introductory APR.
• When it fits: Great for paying down high-interest credit card debt quickly, provided you can pay off the balance before the introductory period ends and are mindful of balance transfer fees.
• Debt Management Plan (DMP): Work with a non-profit credit counseling agency to consolidate payments and potentially negotiate lower interest rates.
• When it fits: Suitable for individuals who are overwhelmed by debt and need structured help and guidance from a professional.
• Hardship Plan: Negotiate directly with your creditors for temporary relief, such as reduced payments or waived fees, due to financial difficulty.
• When it fits: A short-term solution for individuals facing unexpected financial emergencies, like job loss or medical bills, to avoid default.
• Debt Snow-Cone: A hybrid approach where you might tackle a few small debts quickly for motivation while simultaneously attacking a high-interest debt.
• When it fits: For those who want a blend of psychological wins and financial efficiency.

Common Mistakes (and what happens if you ignore them)

| Mistake | What it causes