Before we begin with my complaint...
HEY LENDING CLUB and the rest of you financial criminals...
There is a NEW Sheriff in Town and regardless of your political party, President Obama has a new Financial Enforcement Agency that actually chases the Financial Bad Guys and has every banker's heartbeat racing..
The CFPB also known as Consumer Financial Protection Bureau
Don't let this seemingly nice sounding government agency title fool you.
Bankers fear the CFPB more than the IRS, FBI and SEC combined because since their inception they have been given wider sweeping authority without many of the constraints of the other agencies.
They go in, kick *** and take names the way early FBI Federal Agent Eliot Ness set out to stop Al Capone.
Go Get Em Boys (and Girls;)!!
I wonder who will play CFPB Director Richard Cordray's Character in the Hollywood Movie? Sebastian Stan (Captain America)?
OK... NOW BACK TO OUR REGULARLY SCHEDULED PROGRAM...
In mid-January 2016 I applied for a $16,000 with average 725 Credit Score and offered 12% interest rate after I completed the online Pre-Approved webpage application, they send me loan documents within a few hours stating Original Loan Amount $16,000 approved for a Loan Term of 36 months at an Interest Rate 19.48%.
THEY CLEARLY STATE IN WRITING "NO PREPAYMENT PENALTIES"
"Does Lending Club charge a prepayment fee or penalty?
No, you can partially or fully prepay your loan at any time with absolutely no prepayment penalty or fee. Prepaying your loan will eliminate future interest payments.
Any additional payment will be applied towards a reduction in the principal of your loan, so it will allow you to repay your loan early (and thus reduce the total amount of interest you'll pay), but won't reduce your monthly payments. A full prepayment of principal will pay off your loan and bring an end to your monthly payments."
EXPLAIN HOW $14,991 owed becomes $15,210 to pay off then LendingClub?! Sounds like a lie to me!
Or in legal terms...False Advertising, "Bait and Switch", Detrimental Reliance and Breach of Contract, Predatory Banking, probably another 100 tort, civil and criminal US and State laws.
READ THIS CLOSELY...IT SOUNDS LIKE PREPAYMENT PENALTY DRESSED UP AS A 1% Service Fee:
"WHAT HAPPENS IF A LOAN IS REPAID EARLY?
Borrowers may prepay their loans at any time, in whole or in part, without penalty. If a borrower makes a prepayment during the first 12 months after loan issuance, then you will receive your pro rata share of the payment less the 1% servicing fee, charged as a percentage of the monthly contractual payment amount only, regardless of the borrower’s prepayment amount.
For example, if the contractual monthly payment amount for a Note is $300 and a prepayment payment of $4,000 is received for that Note, an investor would only be charged a servicing fee of $3 (1% of $300).
If a borrower makes a prepayment after the first 12 months after loan issuance, then you will receive your pro rata share of the payment less the 1% servicing fee, charged as a percentage of the total prepayment amount received."
That should have been my first RED FLAG.
But since it was February 1st they had just completed the mini-deposit and withdrawal of $0.78 to verify my bank account and I had already provided them with all of their required documents, pay stubs, etc., etc. I figured I was a day or two from being funded and would go ahead since I only needed the loan as a bridge loan for a few months until a project funding came through.
First, the loan took almost 2 weeks to complete and be funded...not the quickie loan service they lead you to believe they are.
Second, the APR (Annual Percentage Rate interest of the loan) was a WHOPPING 23.25% APR NOT THE OFFERED Interest Rate 19.48%
EVIDENTLY IN THE PREDATORY BANKING WORLD THIS "Bait and Switch" is common...though shouldn't be legal
3.5% more when the math is done really doesn't resemble the initial offer, does it?
Loan was paid into my account February 2nd 2016 minus an $800 Loan Fee
(REMEMBER: THIS ISN'T A MORTGAGE!? BUT AN UNSECURED LOAN, WHICH BY THE WAY, COULD HAVE BEEN DONE BY GETTING A 0% for 12 month credit card with $0 annual fee.)
Monthly payments of $590 for 36 months
So $16,000-$800+$15,200 paid weeks later.
MONEY CLEARED MY BANK ACCOUNT ON FEB 3rd 2016
FIRST PAYMENT OF $590 DUE AND WITHDRAWN FROM MY BANK ACCOUNT VIA DIRECT DEBIT FEBRUARY 26th ONLY 23 DAYS AFTER RECEIVING FUNDING OF $15200...NOT THE $16000!?
Which for most people would mean they are using their loan money to make their first payment!
AND $800 in the hole since they've already deducted their "Loan Origination Fee" from their already over-inflated interest rates.
So now I am $1,390.00 out of pocket only 3 weeks into receipt of money from LendingClub.
May 2016, 2 months later I decided to pay off this loan and the below indicates all of my transactions from beginning to end with LendingClub. maybe one of you are related to an Assistant US Attorney General to translate how the legality exists.
Now for the REAL "Smoke and Mirrors" money disappearing act:
Upon checking online and via phone I was instructed my remaining balance was $14,991.84
However, when I called them to arrange the actual payment transfer, since you CANNOT do it like everything else online... I was told payoff amount was actually $15,210.88
$208.04 MORE THAN I ACTUALLY OWED and $10.88 more than I received from LendingClub AFTER I PAID 3x $590.39 ($1,771.17) + $800 Loan Fee + $208.04
TOTALLING $2,779.21 PAID from February 26 - April 23, 2016 (PAYOFF AMOUNT WITHDRAWN FROM BANK) 83 Days from receiving money from LendingClub or in other words:
$2,779.21 for 83 days not $1,605.86 (3x$590.36)
$1,021.77 per month for 2.72 months
($2,779.21 ÷ 2.72 months = $1,021.77 PER MONTH!
NOT $590.36 a Month...but $431.41 PER MONTH MORE $1,021.77
42.22% INTEREST ON TOP OF THE 23.25% APR ALREADY IN THE LOAN
$2,779.21 = $33.49 PER DAY!!! x 83 days NOT the
$19.34 per day for 83 days on an ALREADY OVER-INFLATED LOAN!
When I called them on it, because they will not respond to you "IN WRITING" via email (that would put them too legally at risk of admitting any potential legal liability...but the math speaks for itself)
05/31/2016 DIRECTDEP LENDING CLUB DIRECTDEP REFUND $0.01
05/23/2016 DIRECTDEBIT LENDING CLUB DIRECTDEBIT -$15,210.88
04/26/2016 DIRECTDEBIT LENDING CLUB DIRECTDEBIT -$590.39
03/28/2016 DIRECTDEBIT LENDING CLUB DIRECTDEBIT -$590.39
02/26/2016 DIRECTDEBIT LENDING CLUB DIRECTDEBIT -$590.39
02/02/2016 DIRECTDEP LENDING CLUB DIRECTDEP $15,200.00
02/01/2016 DIRECTDEBIT LENDING CLUB DIRECTDEBIT -$0.78
02/01/2016 DIRECTDEP LENDING CLUB DIRECTDEP $0.78
So whenever you need to borrow money, go to your Credit Union, your 401(k), even your regular bank... but tell LendingClub NO THANK YOU because they are crooks! Even their CEO is in just a little bit of hot water. They are NO BETTER THAN "PAYDAY Loan" companies...and people with low credit scores should never be charged "Loan Shark" rates let alone good credit scores of 720+ that banks offer the best rates to.
"A Wolf by any other name is still a Wolf"
LendingClub are the bottom feeders of the financial world.
Product or Service Mentioned: Lending Club Loan.
Reason of review: Pricing issue.