You could stand to lower your car payments by refinancing with LendingClub.
You’re not alone if you’re concerned about your car payments. Americans are in a ton of car debt — now over $1 trillion and growing. And in June 2017, the average monthly car loan payment was more than $500.
Refinancing is one way to make paying off your debt more manageable — if done right, it could land you with stronger rates, lower fees and a more realistic loan term.
We take a look at LendingClub’s auto refinancing loans designed with the current auto debt crisis in mind.
|Product Name||LendingClub Auto Refinancing|
|Min Loan Amount||$5,000|
|Max. Loan Amount||$55,000|
|Min APR||From 2.24%|
|Minimum Loan Term||2 years|
- Car must be 10 years old or less
- Be under 120,000 miles
- Be covered by comprehensive insurance coverage
- Be up-to-date on registration in the state where you live, and due to expire in the next 30 days
- Your loans must have an outstanding balance of $5,000—$55,000
- Have been initiated at least 3 months ago
- Have at least 24 months of remaining payments
First, am I eligible?
To apply with LendingClub, it’s not just you that must meet its criteria: Your car and your current loan also come with eligibility requirements.
To qualify you must be:
- At least 18 years old.
- A US citizen, permanent resident or living in the US on a long-term visa.
- A resident of one of the 25 states where it offers car refinancing.
To qualify your car must:
- Be at most 10 years old.
- Be your personal car.
- Be under 120,000 miles.
- Be covered by comprehensive insurance coverage.
- Have up-to-date registration in your state, that isn’t due to expire in the next 30 days.
Your previous loan must:
- Have a balance between $5,000 and $55,000.
- Be at least three months old.
- Have 24 months or more left in its term.
LendingClub auto refinancing is available to residents of:
- New Mexico
- New Jersey
- New York
- North Carolina
- South Carolina
- South Dakota
What makes LendingClub auto refinancing unique?
Auto refinancing is one of LendingClub’s newer services — this financing product has only been around since 2016. It’s intended to help Americans deal with the auto debt crisis by offering interest rates from 1% to 3% lower than what they’re paying on current auto loans. Of course, savings aren’t guaranteed — it determines your rate using your credit score and other factors.
It’s currently restricted to half of the country and specific vehicles. But that won’t always be the case. LendingClub intends to eventually make auto refinancing available to many more borrowers in the near future.
Does LendingClub offer other types of car loans?
Sort of. You can only use LendingClub auto refinancing to, well, refinance your existing car loan. If you’re looking for a loan to cover the cost of a new car, you can use a LendingClub personal loan for car financing, although you may want to look at specific car loans instead.
Compare providers for car loans and auto refinancing
What are the benefits of LendingClub auto refinancing?
- No application, origination or prepayment fees. The only fees you could pay are a DMV fee transfer a loan title and late fees, which are outlined in your loan agreement.
- Easy-to-use website. Access to information can be the sign of a reliable lender. LendingClub makes it clear that terms and rates vary depending on the borrower, but it also gives you a ballpark range.
What to watch out for
- Available in 25 states only. LendingClub has rolled out car refinancing to half the country for now with plans to expand very soon.
- Restrictions on vehicles you can refinance. Eligibility depends on brands, commercial vehicles and accident history.
- Applying could affect your gap insurance. Whether your gap insurance is affected by refinancing depends on your provider. Consider talking with them before refinancing your car with LendingClub.
- It takes a while to get your money. It could take as long as 14 days to refinance your car. This is because there’s a lot of paperwork involved, some of which may even involve a notary.
- It’s hard to contact them if you don’t already have a loan. Most information is available online, but you’ll need to compete an annoying online form and wait for an email if you have even a quick question.
How do I apply?
The whole process of refinancing an auto loan with LendingClub can take up to 14 days.
- Go to the site, select your state and click Check Your Rate.
- Follow the steps to complete the forms with your personal information. This shouldn’t take more than a few minutes and won’t affect your credit score.
- If you qualify, LendingClub will contact you with two offers. Select the best offer for you and continue with the application.
- Get together and submit the requested documents. Most of these can be uploaded to your application, but some require snail mail.
- Sign the paperwork.
- Go to the site, select your state and click Check Your Rate.
What documents do I need to apply?
You’ll need at least:
- A driver’s license. Make sure it’s current and valid in your state — for instance, LendingClub won’t accept a Mississippi license if you’re living in Montana.
- Proof of registration. Your car’s registration also must be current.
- Proof of insurance. Provide your full-coverage insurance card for the car you want to refinance.
You may also need:
- Title transfer documents. You’ll sign a limited power of attorney form to transfer the title to LendingClub. Some states also require you to have the form notarized.
- Personal references. LendingClub sometimes requests personal references from friends, family and coworkers, including contact information.
I got the LendingClub auto refinancing loan. Now what?
Set up autopay. That way you won’t have to worry about making payments every month. Just make sure you set it up with an account that won’t be short on funds around the time your payments are due.
Get in touch — and stay in touch. Keeping your lender up to date with your financial situation can help you avoid paying unnecessary fees over misunderstandings and even navigate rough patches.
LendingClub auto refinancing loans are limited, but they won’t be for long. Even if you don’t qualify today, keep it in mind as a future possibility.
But before you make any decision, compare your options and read the fine print to make sure you’re getting the best deal.