Best for: average credit applicants looking for a streamlined process — and help with paperwork — to refinance an auto loan, buy out a lease or purchase a company car
Innovative Funding Services (IFS) provides loans for people who want to refinance their current car loan or buy their leased car or company vehicle. The Austin, Texas-based company also provides expert registry service and sells protection plans such as GAP insurance, maintenance contracts and tire and wheel warranties. Chief Operating Officer Rob McKie says IFS was established to simplify the lending and document-handling process involved in vehicle sales and transfers.
- Specializes in providing loans for refinancing, company cars and lease buyouts; does not provide dealership purchase loans
- Handles registry of motor vehicles paperwork for ownership transfers
- Requires a hard credit pull to provide a rate quote
- Matches borrowers with loans for as low as a 1.89% interest rate
- Allows co-signers
- Is available in all 50 states
IFS auto loans at a glance
|Typical APR||1.89% - 23.99%
|Loan amounts||$5,000 - $100,000
|Time to funding||5 days on average|
|Soft credit check with application?||No; a hard pull is required|
IFS review details
To review IFS, NerdWallet collected more than 24 data points from the lender, interviewed the company’s chief operating officer, reviewed the online loan application, and compared the lender with others that seek the same customer or offer a similar product.
IFS is good for
Many people with car loans could actually find a better one, McKie says. This may be because they’ve improved their credit or their current loan carries a higher rate than they could have qualified for. In as few as 60 days, their credit could improve to a point that they can get a better interest rate by refinancing, McKie adds. Such applicants could save money and reduce their monthly payment. IFS is a direct lender and also works with other lenders to provide interest rates of 1.89% to 23.99%, with an average of 4.5%.
IFS also specializes in providing loans to buy a vehicle at the end of a lease or to purchase a company car. This can be a complicated process involving confusing paperwork to get the car titled and registered in the buyer’s name. IFS will complete the needed paperwork, saving you a trip to the department of motor vehicles office.
The loan application for preapproval can be filled out on a smartphone or computer in minutes. It requires a Social Security number and a hard credit pull, which slightly lowers your credit score. “The impact of a hard score pull is nominal and is far outweighed by the amount of lenders it opens up for the consumer,” McKie says.
The speed with which IFS responds to a loan application depends on the accuracy of the information provided by the consumer. McKie says the average response time is 30 minutes but it can be almost immediate. However, in 48 hours, an IFS representative will follow up with a phone consultation and additional questions to help determine the best lender for that applicant’s situation.
The application is then matched to one of the lenders in IFS’ network, he says. IFS presents the applicant with an interest rate and loan terms. If the loan is accepted, an IFS representative arranges the transfer of money between banks. It also handles all the paperwork, both with the lenders and the registry of motor vehicles to fulfill state requirements for registration and titling.
To qualify for a loan from an IFS lender, applicants need a minimum credit score of 550, though the average score for IFS customers is 640. Minimum income for applicants is $1,500 per month before taxes. Vehicles with less than 150,000 miles and less than 10 years old are eligible for IFS loans.
IFS offers loans in all 50 states. Loan terms range from 36 to 84 months (however, NerdWallet doesn’t typically recommend that loans be stretched to over 60 months).
After your loan is approved, IFS handles the paperwork, which can be tricky if you are buying a company or leased car. Documents are signed either electronically or shipped overnight for your signature.
IFS doesn’t charge an application fee and borrowers are not obligated to select any of their offers, which expire after 30 days. Late payment fees vary by lender.
It’s smart to comparison shop when you want to buy a car or get an auto loan. In some cases, that can lead to being contacted by car dealers and lenders. However, according to McKie, applicant information is not immediately passed on to other businesses. When the applicant accepts the offer, then the information is given to that specific lender and the contract is finalized.
Still, it’s smart to read the privacy information on any lender’s website if you’re concerned about getting unsolicited calls and emails. To help with that, create a new email account and get a Google Voice phone number that you can check separately. Both options are free and can be used for other shopping needs, as well.
Before you take a car loan
Thanks to the internet and industry competition, many loan opportunities are available. It’s important to get several rate quotes to make sure you’re getting the best deal. But just because money is available doesn’t mean that you have to stretch your budget. When choosing a car, pick one that addresses your needs. When shopping for a loan, select the one that fits into your budget and helps you achieve your long-term financial goals. If your financial picture changes, you can re-evaluate and make an informed adjustment by refinancing.
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Philip Reed is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org.