2023 LendingClub Auto Loan Review
LendingClub auto loans at a glance
|New auto loans||Used auto loans||Refinance auto loans|
|Starting annual percentage rate (APR)||N/A||N/A||5.99%|
|Loan terms||N/A||N/A||24 - 84 months|
|Loan amounts||N/A||N/A||$4,000 - $55,000|
|See Auto Loan Rates||See Auto Loan Rates||See Refinance Rates|
If you want to know whether an auto loan refinance can help you save money without harming your credit score, LendingClub might be the place for you. Its prequalification process enables you to check rates using only a soft credit inquiry, which won’t affect your score. Plus, these loans don’t come with an origination fee, allowing you to save money in the process. Keep reading for the rest of our LendingClub auto loan review.
- Soft credit inquiry: LendingClub allows you to check your rate with them without impacting your credit score.
- Low fees: The company doesn’t charge origination fees or prepayment penalties.
- Easy application process: LendingClub offers a fully online application process, including document upload.
- Same-day loan approval: Borrowers can be approved for a loan on the same day they apply. Funding is usually disbursed two days after loan approval.
- Best for borrowers who want to shop around: LendingClub allows you to check your rate before applying and presents you with multiple loan offers. It’s likely a good choice for those who want to get a feel for their options before signing on the dotted line.
LendingClub pros and cons
When choosing a lender, it’s important to weigh the pros and cons in order to verify that you’re making the best choice for you. Here are some important factors to consider with LendingClub:
Easy online application
Flexible loan amounts and terms
Same-day loan approval
Only offers refinance loans
Not available in all states
Imposes vehicle restrictions
High minimum credit score
LendingClub makes it easy to use their service. Although it’s not the same as guaranteed loan approval, the company lets borrowers check their rates before applying and streamlines the application process by having it entirely online. With loan amounts ranging from $4,000 to $55,000, and loan terms ranging from two to seven years, LendingClub offers more flexibility than some other lenders.
That said, according to LendingClub representatives, the company’s average borrower has a credit score in the high 600s. (However, they also were clear that there is “a chance” of being accepted with a score in the low 600s.) Overall, this means that LendingClub may not be the best fit for borrowers who have lower credit scores.
If you have bad credit and do get approved, you could end up paying up to 24.99% APR on your loan. In addition, LendingClub isn’t available in all states and it imposes restrictions on which vehicles it will agree to refinance. (More on that below.)
A closer look at LendingClub auto loans
Launched in 2007, LendingClub originally began with a focus on peer-to-peer lending. However, since 2020, the company has moved away from the peer-to-peer model. It now offers a selection of personal loans, business loans and auto loan refinancing options.
According to LendingClub, borrowers who refinance with one of their car loans save an average of $78 per month on their monthly car payments. However, if you’re considering going this route, you need to know that while refinancing can lower your payment amount, it will also increase the amount of time it takes to pay back the loan and the amount of interest charges you pay over time.
In addition, here’s a closer look at some other features to be aware of if you’re considering refinancing with LendingClub:
LendingClub is very upfront about the fact that it doesn’t charge origination fees or prepayment penalties.
However, if you submit a payment after its due date, you could be subject to a late fee. Luckily, LendingClub offers a 15-day grace period and the opportunity to ask for a payment plan or move your due date if you start to fall behind.
Unfortunately, not everyone will be able to refinance their auto loans through LendingClub. For one thing, this lender only operates in certain states. It currently does not accept applications from residents of Alaska, Hawaii, Maine, New Hampshire, North Dakota, Vermont, West Virginia, Wyoming, Washington, D.C. or any U.S. territories.
For another, it limits the makes and models of the vehicles it will agree to refinance. At this time, you can’t submit any of the following models and makes: Hummer, Pontiac, Saab, Saturn, Daewoo, Isuzu, Suzuki, Oldsmobile and Nissan Leaf.
LendingClub also doesn’t refinance ATVs, RVs, motorcycles, commercial vehicles or salvaged vehicles.
Further, your car must meet the following requirements in order to qualify:
- Your car must be for personal use only and less than 10 years old, with fewer than 120,000 miles on it.
- Your existing car loan must have at least 24 months left.
- All your auto loan payments must be made on time.
- Your car loan’s remaining balance must be between $5,000 and $55,000.
- Your car must be registered and titled in the state where you live.
How to get a loan with LendingClub
The steps for refinancing a car loan through LendingClub are relatively simple. All you have to do is provide some information about yourself and your vehicle, choose from any applicable loan offers, upload some documentation and agree to the lender’s terms. The company boasts that you can apply for a LendingClub auto loan in a matter of minutes.
Here’s a step-by-step look at what to expect:
- Provide your information: On the Check Your Rate page, there’s a place for you to enter your contact information and some details about your income. You’ll also be asked to provide details about your car, including the make, model and mileage. You’ll also be asked to specify if you purchased the car with someone else by filling out a joint application.
- Choose your offer: If you qualify, you’ll be given up to two loan offers to choose from. Be sure to read the terms and conditions carefully, especially the interest rates and fees, so that you can confidently choose the best fit for you. An auto loan calculator can also help estimate your payments.
- Upload your documentation: LendingClub asks you to submit photos of your driver’s license, vehicle registration and proof of insurance. In certain situations, they may also ask for additional documentation, such as proof of income.
- Accept the terms of the loan: After all your documentation has been submitted, all that’s left to do is sign on the dotted line. Once you accept the terms of the loan, LendingClub will pay off your previous lender and your auto loan refinance will be complete.
How LendingClub auto loans compare
When compared to some of its competitors, LendingClub’s auto refinancing tends to have a lower minimum APR. However, it also comes with lower borrowing limits and shorter loan terms.
Here’s how it stacks up:
|Starting APR||5.99%||Varies by state||9.24% (with autopay)|
|Loan terms||24 - 84 months||24 - 84 months||24 - 84 months|
|Loan amounts||$4,000 - $55,000||$9,000 - $60,000||$5,000 - $100,000|
|Minimum credit score||Low 600s||Not disclosed||Not disclosed|
Is a LendingClub loan right for you?
With its easy prequalification process and multiple loan offers, LendingClub is a good choice for those who want to get a feel for their options before committing to a car loan. Plus, with its lower minimum APR, it may be a particularly good choice if you have excellent credit.
On the other hand, if you need to borrow more money than LendingClub allows or you want a loan term that’s shorter than two years or longer than seven, you may be served elsewhere. Upstart, for example, lets borrowers take out up to $100,000 and pay it off over 12 years. However, since rates start at 9.24% APR, you may pay significantly more for the privilege of borrowing, even if your credit is in good shape.
In either case, it’s important to shop around for a lender. Shopping around will help you see what rates you qualify for with your current credit score and give you a chance to select the loan terms that work best for you.