Best for: Refinance applicants who want the option to match or extend their loan term
Lending Club, which is well-known for its peer-to-peer lending model for personal loans, now also offers auto refinance loans. Unlike the online lender’s personal loans, the newer auto refinance loans aren’t peer-to-peer loans, meaning individuals can borrow money but they can’t invest in the loans — at least not yet.
That might soon change, says Abigail Edelman, a marketing director for Lending Club. “Right now we’re not live with individual investors, but we expect that will be something that happens in our very near-term future.”
And in the meantime, its refinance borrowers might still save some money. According to Edelman, Lending Club’s average customer saves more than $1,600 when refinancing an auto loan with the company. Refinance applicants can receive two offers: one with the same term as the current loan and one with a longer term.
- Provides only auto refinance loans
- Doesn’t currently offer peer-to-peer investing for refinance loans as it does for other loan types
- Presents up to two offers with different loan terms in minutes, with no hit to applicant’s credit score
Lending Club at a glance
|APR||3.49% - 24.99%
|Loan amount||$5,000 – $55,000|
|Time to funding||4-10 days, depending on how quickly customers complete documents|
|Fees||No application fee; late fees may apply|
|Soft credit check with application?||Yes|
Lending Club review details
To review Lending Club, NerdWallet collected more than 30 data points from the lender, interviewed company executives, completed the online loan application process with sample data and compared the lender with others that seek the same customer or offer a similar product.
Lending club is good for
If you’re looking for a direct refinancing offer from an established online lender, consider Lending Club, which has issued more than $26 billion in loans as of March 31, 2017. Rate shoppers can get a preapproved offer in minutes without damaging their credit score.
Lending Club also shows borrowers how extending the loan term would change their payments by providing up to two options: a term-match offer and a term-extension offer. Borrowers can choose between a lower rate with the same term as their current loan and a lower payment at a longer term. NerdWallet generally doesn’t recommend extending an auto loan term if possible, because you might pay more in interest over the long run.
Lending Club doesn’t require applicants to have a minimum income, but the minimum credit score is 510. Its borrowers have an average FICO score of 690.
Lending Club requires the refinanced loan to apply to vehicles no more than 10 years old and with less than 120,000 miles. They also must be “personal use” automobiles. That means no RVs, motorcycles or commercial vehicles. Prospective borrowers can’t refinance Hummers, Pontiacs, Saturns, Daewoos, Isuzus, Suzukis, Oldsmobiles, diesel Volkswagens or Dodge Neons. Borrowers’ current loan must be at least 3 months old with a balance of between $5,000 and $55,000, and they must have at least two years of remaining payments to be eligible.
Refinancing is available in Alabama, Arkansas, Arizona, California, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington and Wisconsin.
Applicants begin by selecting their state on Lending Club’s homepage and then filling in personal information, including their name, date of birth and yearly income. Lending Club then provides a preapproved offer or explains why the applicant doesn’t qualify. Lending Club requires only a soft credit pull to offer a rate.
Depending on their credit profile and vehicle details, Edelman says, “qualified applicants” will see a term-match offer, a term-extension offer or both.
Lending Club performs a hard credit pull before funding borrowers who accept an offer. Borrowers also need to provide additional documentation, including their license and registration. Some states also require a power of attorney, which transfers the title from the previous lender to Lending Club. All documents can be uploaded online. Once each application is processed, Lending Club handles the transition with the previous lender.
Lending Club assesses late payment fees, but doesn’t charge application, origination or prepayment fees.
It’s smart to comparison shop when you want to get an auto loan of any kind. That can, however, lead to being contacted by lenders and even dealers. If you’re concerned about your data, review Lending Club’s privacy settings before submitting an application to see if there’s anything you want to opt out of.
However, Lending Club’s Edelman stresses that the company is paid when borrowers get new loans, not when it generates leads for other companies. “In our business model, we’re paid if you think think the value we are giving you in savings is good and you like the experience,” she says.
You can also create a new email account and get a Google Voice phone number that you can use specifically for loan applications. Both options are free and you can use them for other shopping needs as well.
Before you refinance
If you qualify for a lower rate, refinancing your auto loan can save you a sizable chunk of money. Get an idea of how much you can save by using our auto loan refinance calculator.
And thanks to the internet and competition in the marketplace, many auto loan refinance opportunities are available. But just because you qualify for a new loan doesn’t mean you have to take it. When shopping for a refinance loan, select the one that fits into your budget and helps you achieve your long-term financial goals.
Updated Feb. 22, 2018
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