Refinancing your car loan with LendingClub could save you money
If your car payment seems too high and you’ve improved your credit score since taking out your car loan, refinancing may be a smart option for you.
LendingClub offers auto loan refinance with no origination fees or prepayment penalties to qualified borrowers and has a simple application process.
LendingClub has been around since 2007 and is a major player in the peer-to-peer lending market; it pairs borrowers with investors for a mutually beneficial relationship. Borrowers can get the capital they need and investors can earn money on their loan.
According to the company’s website, LendingClub is committed to leveling the playing field so that everyone can access a better financial future. The company aims to achieve this by keeping costs low and providing access to credit through easy-to-use technology.
LendingClub, while best known for its personal loans, also offers business loans, car refinancing, and options for financing medical care. The company has served over 3 million customers with over $50 billion borrowed.
Refinance a car loan with LendingClub
Using LendingClub, you can refinance an auto loan up to $55,000. Your car must be 10 years old or less, have less than 120,000 miles and be a personal use automobile. Your existing loan must be at least one month old with a remaining balance between $5,000 and $55,000, and you must have at least 24 months remaining in your loan period.
If you qualify, you will pay a fixed monthly rate for the duration of your loan. However, LendingClub does not charge any prepayment penalties, so you can pay off your loan early without worry.
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The annual percentage rate (APR) on auto loans refinanced with LendingClub is between 3.99% and 24.99% as of December 2019. The APR you’ll be approved for will depend on your credit as well as the amount you want borrow and your current debts. .
To apply, you need to fill out a form that includes your name, address, phone number, and annual income. If you applied for your original loan with someone else, you will need to share that person’s information as well.
From there, LendingClub will do a light draw on your credit to find any outstanding car loans. If you have a qualifying loan, LendingClub will ask you for more information about your car and provide you with one or more loan offers.
Once you’ve accepted an offer, LendingClub will ask you for documents, including proof of insurance, registration, and a copy of your driver’s license. You will also need to provide two personal contacts and complete a title transfer.
You will upload these documents to the LendingClub website within 30 days, sign your loan documents online, and then start making your payments directly to LendingClub.
LendingClub does not charge any application or origination fees for auto loans, but you may have to pay a title transfer fee to your state DMV. LendingClub will charge late fees if you miss a payment, so refer to your loan documents for the exact cost of late fees.
Refinance is not available for Hummer, Pontiac, Saturn, Daewoo, Isuzu, Suzuki or Oldsmobile vehicles, nor for Volkswagen, Dodge Neon diesel vehicles or any other utility vehicles.
The bottom line
LendingClub is a reputable lender with over a decade in business and overall positive customer feedback.
Although its auto loan refinance rates are reasonable, other lenders may offer lower rates. LendingTree, for example, offers auto loan refinance rates starting at 2.89%, which is lower than LendingClub’s floor rate of 3.99%. But you might not get the lowest rate from either lender, so always compare quotes to get the best deal.
Interested in refinancing your car loan? Find out how much LendingClub can save you each month »