LendingClub Auto Loan Review

LendingClub offers just one loan product for vehicles: auto refinancing. Applicants can quickly get quotes online, and rates start low — even when compared to other lenders. But lots of restrictions apply.

For those who qualify, refinancing through LendingClub could mean saving money. This online lender offers APRs as low as 2.99% on auto refinancing, with low minimum credit score requirements, no origination fee and no prepayment penalty.

But residents of eight U.S. states and the District of Columbia aren’t eligible, and borrowers may experience wait times as long as 15 days between loan approval and loan funding.

LendingClub loans at a glance

LendingClub auto loans pros and cons

There’s a lot to like about LendingClub’s refinancing options, but there are also a few details you’ll want to keep in mind before submitting an application.

A closer look at LendingClub auto loans

LendingClub is a San Francisco-based company that formerly offered peer-to-peer lending. As of December 2020, the company no longer allows individuals to invest in LendingClub loans, but they currently offer personal loans, business loans and auto refinancing.

If you refinance your auto loan through LendingClub, you can borrow up to $55,000 and extend your car loan repayment by as much as seven years. Borrowers should be aware, however, that while extending can lower your monthly car payment, it will also significantly increase the amount of money you pay toward interest.

Here are the other main features to consider before refinancing through LendingClub:

Fees

Unlike some other lenders, LendingClub doesn’t charge an origination fee or an application fee. Additionally, there’s no prepayment penalty.

Borrowers will be charged fees for late payments, but LendingClub offers a 15-day grace period, and payment plans may be available to borrowers who fall behind.

Restrictions

One of the biggest drawbacks to LendingClub’s refinancing product is that residents in many areas are restricted from borrowing. LendingClub auto refinancing is not available for residents of the following areas: Alaska, District of Columbia, Hawaii, Maine, New Hampshire, North Dakota, Vermont, West Virginia and Wyoming.

Like most lenders, LendingClub also has restrictions on which vehicles and loans can qualify for their refinance loan. Refinancing is not available for Hummers, Pontiacs, Saturns and a handful of other makes and models.

Additionally, your current vehicle and loan must meet the following requirements:

• Vehicle is no more than 10 years old and has fewer than 120,000 miles
• Minimum of 24 months left on your current loan
• Remaining loan balance is between $5,000 and $55,000
• The vehicle is registered and titled in the state where you live

In order to qualify, you’ll also have to show that all of your loan payments have been made on time for your current loan.

Other benefits

While they do have a fair number of restrictions, there are plenty of positive aspects to refinancing an auto loan with LendingClub.

• Applicants with a FICO Auto Score as low as 510 can be approved
• Rate quotes don’t impact your credit score
• You’ll receive multiple loans offers to choose from
• Borrowers can change their payment due dates

How to apply for a LendingClub auto loan

Applicants can start the process by checking their rates online, which involves answering a few questions about yourself and the loan you want, and agreeing to the lender’s terms and conditions. This process only takes a few minutes.

Then, you’ll have to take additional steps to complete a full loan application. Here’s an overview of the process, from start to finish:

Provide your information 

Enter your state of residence and hit the “Check Your Rate” button. Then you’ll need to enter some information:

• Your contact information, email address and income
• Details about your car, including year, make, model and mileage
• If you purchased your car with someone else, you’ll need to apply with that person by choosing “Joint” in the Application Type menu

Select your offer

You’ll be presented with multiple loan offers to choose from. Be sure to review the overall loan amount, monthly payment, fees and interest rate before making your choice.

Complete an application

Review and complete your “To-Do List,” which may include uploading images of the following documents:

• Driver’s license
• Proof of registration and insurance
• Paystubs

If you’re approved, LendingClub will send the funds directly to your auto lender.

Borrowers can set up automatic payments for their new refinance loan or make payments online, by phone or with a check.

How LendingClub auto loans compare

LendingClub stands out when it comes to low APR and flexible credit requirements, but it may not be the best lender for every borrower’s needs.

Like Upstart, LendingClub offers auto refinancing online, but neither lender offers loans throughout the entire United States. On the other hand, LightStream is available in every state, and the lender can pay off your existing loan in as little as one day after approval. By comparison, you might have to wait as long as 15 days with LendingClub.

 (*Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.)

Is a LendingClub loan right for you?

Finding the best refinance loan depends on what you’re looking for. While LendingClub offers an exceptionally low starting APR and minimal fees, their restrictions are rather prohibitive.

LendingClub refinancing is not available in all U.S. states, and mileage limitations are low in comparison to other lenders. For example, Upstart refinances vehicles with up to 140,000 miles, and LightStream has no mileage restrictions at all.

When shopping around, it’s important to take all of these factors into consideration. But if you do meet the requirements for a LendingClub auto loan refinance, this lender could help you reduce your interest rate and save money on your car loan repayment.