Lending clubs have been the most favorable peer to peer lending and borrowing option for many Americans. The lending clubs are the best option for people in need of fast-approved loans. What’s more, lending clubs provide loans under the best terms.
Besides being affordable due to low interest rates, lending club regulations are well established and clear. The pattern of service in lending clubs makes it affordable. However, the lending club loan approval process is strict, meaning it’s inaccessible to some borrowers.
The strict approval process has been useful in ensuring that only borrowers with a good credit history qualify for loans. Lending club loans come in several ranges. Explore the following ranges of lending club loans.
Top 3 Lending Club Loan Ranges
1. Closed-Ended Loans and Open-Ended Loans
A closed ended loan is a loan product that features one-time debt you incur for a given amount. You pay the loan amount in accordance with programmed payment terms. In closed ended loaning, you borrow a fixed amount of money, for example, to buy a car. After borrowing, you’re provided with a schedule on how you will pay the loan.
When done with loan repayments, the loan is closed until a later time when you may want to buy another car on credit. When need arises later, you can secure another car loan.
An open-ended loan product, on the other hand, is a rotating range for purposes such as financing your credit card. You borrow a fixed amount of credit. When you pay bills using your credit card and the amount reduces, the loan product allows you to repay the amount spent.
After repaying the amount you spent, you’re refinanced with the original amount you borrowed. Your credit card remains open as long as you and your creditor decide to leave it as such.
2. Fixed- Rate and Variable Rate Loans
A fixed rate loan allows you to pay a constant interest rate all through your payment period. You’re able to know in advance the exact amount to pay in monthly payments because your rate is fixed. If you take a loan to buy a house, your interest rate becomes constant every month for the entire repayment period.
With variable interest rate, your interest rate varies. In this range, rates change according to the moving interest rates in the credit market. This means that when rates go down, you benefit because you get to pay a lower interest rate than you would otherwise pay. On the converse, when rates go high, you pay a higher rate than you would.
3. Secured and Unsecured Loans
A secured loan is a range of loan product with collateral backing. The collateral you provide to the lender gives you the advantage of paying a lower interest rate. Collateral lifts the lenders confidence in you, the borrower. The lender can sell your property on collateral in case you default in payment.
An unsecured loan, on the other hand, is a loan without collateral backing. Credit card refinance, student loans, medical bills are some of the uses of unsecured loans. In this case, the lender is legally unable to seize your property in case you default to pay as scheduled. Interest rates are higher for unsecured loans.
What’s the most befitting lending club loan range for you? You now know the different ranges of loans available in lending clubs. It means you better understand how to evaluate yourself for the best loan product according to the clubs’ varying structures.
If you’re looking for a personal or business loan, choose from the above variations or visit us soon.