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      October 25, 2020

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LendingClub vs Instant Car Loan

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To help you find the Best Auto Loans, TopConsumerReviews.com provides you with an in-depth comparison of LendingClub and Instant Car Loan.

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Where can you get the best auto loans? You're right if you suspect that the answer to that question is "not necessarily at the dealership".

You might initially be lured in by a dealership's attractive 0% financing offers - but unless you've got extremely good credit, you're not going to qualify. And, in the excitement of getting your new (or new-to-you) car, you could wind up with interest rates on your car loan that are even higher than what you'd get elsewhere.

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2020

Auto Loan Reviews

3 stars
LendingClub

LENDINGCLUB

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BBB Rating:

No Rating, accredited since 2008

LendingClub takes care of financing the purchase of a car through personal loans up to $40,000 - in other words, once you get the money, you can use it however you like. This peer-to-peer lending platform has served more than three million customers, with over $50 billion borrowed since LendingClub got its start in 2007.

Browse the resources

If taking out a loan is new to you, it's a good idea to browse the Resources link on the LendingClub site. There, you'll find articles on borrowing, debt, and many other relevant subjects; calculators to help you determine your credit utilization; plus, you'll even get some guidance regarding leasing vs. buying your car.

Getting started

Let's say you decide to go for it and apply for a personal loan for your vehicle purchase. First, you'll enter the purpose of your loan and enter the amount you plan to borrow. You won't find "buy a car" on the list, so you might want to select "Buy something special". From there, you'll be asked to indicate if you're including a co-applicant, your birthdate, individual income, name, address, and phone number.

Won't impact your credit score

That information won't impact your credit score, but you'll have to enter your Social Security number if the details you gave aren't enough for LendingClub to find your credit report. Once you've finished answering these questions, you'll be able to see the loans being offered (if any). If you choose one and complete the loan acceptance process, you could have the money deposited to your bank account in as little as four days.

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Transparent fee disclosures

In the past, LendingClub had been taken to task for not openly disclosing their fees and interest rates. We were glad to see that's no longer the case: you can easily find that information on their site. At the time of this review, for example, their rates ranged from 10.68% to 35.89% APR, with one-time origination fees between 2-4% of your total loan amount. But, we did see two different ranges for those origination fees: 2-4% at the top of the site, and 1-6% further down in the FAQ. All loans through LendingClub have terms of at least 36 months, and in some states you'll have minimum/maximum loan requirements.

Refinancing requirements

If the purpose of your auto loan is to refinance your current terms, you'll find some slight differences. First, there's no origination fee charged by LendingClub. Second, unlike a personal loan used for buying a car, a refinance loan has some extra requirements; you may be asked to send in documents about your car. Finally, your current loan has to meet their eligibility requirements. These include an outstanding balance of $5,000 to $50,000 with at least 24 payments remaining, on a car that is for personal use only, 10 years old or newer and under 120,000 miles.

Pending government action

LendingClub has a "No Rating" status with the Better Business Bureau. Although this financial service has accreditation from the BBB, a pending government action (related to LendingClub's previous issues with not openly disclosing fees) keeps the company from having an actual rating there. We also weren't thrilled to read through some of the hundreds of complaints filed with the BBB, many of which had legitimate concerns about payments not being recorded properly (and the subsequent negative impact on borrowers' credit scores), inaccurate payoff information being given by LendingClub representatives, and so on.

Many happy customers

However, when we looked beyond the BBB site - since people rarely go there to leave compliments, right? - we found not just thousands but tens of thousands of reviews from very happy clients. Some of those customers have used this platform multiple times for loans and appreciate getting funding when other personal and auto loan companies have turned them down.

Caution advised

We would advise some caution when using LendingClub for your auto financing. It seems like when everything goes as expected, they're a great service - but when there are problems, customers often have a hard time getting a quick, complete resolution. There are other sources of auto loans out there that work similarly to LendingClub, so you might want to look there first before committing to this company.

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1 star
Instant Car Loan

INSTANT CAR LOAN

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BBB Rating:

D-, not accredited

Instant Car Loan promises that you can request a car loan in seconds. In operation for more than 10 years, this auto loan referral service encourages customers of all credit types to apply, having worked with thousands of people who didn't have perfect credit histories.

Not so instant

To see if you qualify for an auto loan through Instant Car Loan, you start by entering your name, zip code and email address. In step two, you'll have to provide your detailed information: SSN, employer name and gross monthly income, and so on. Your application will be shared with up to five partner lenders, and those partners might run a credit report before contacting you. Instant Car Loan isn't so "instant": they don't fund anything themselves, but rather connect you with their network of auto loan providers.

Serious concerns

However, because of some serious concerns we had with this site, you may not feel comfortable going through the whole process of applying for an auto loan. Why? Here's what we found.

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D- rating

Would you entrust your finances to a lender whose parent company is called "Internet Brands"? That's who owns Instant Car Loan - along with Cars Direct, Groove Job, and several other businesses. Sure, that in itself might not be so bad, but when you consider that Internet Brands has a "D-" rating from the Better Business Bureau, it becomes obvious that you won't want to give this auto loan provider access to your personal information.

Is anyone there?

We came across one customer comment from over a year ago, asking if anyone is actually managing this business. No one ever responded. Plus, the Instant Car Loan site proudly claims an "A+' rating with the BBB: that is definitely not the case.

Cannot recommend

With all that said, we just don't feel that Instant Car Loan is a trustworthy source of funding for your auto loan. We cannot recommend strongly enough that you work with one of the higher-ranked lenders in our review.

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Continued from above

Savvy consumers know that the best way to get truly competitive rates on auto loans is by comparison shopping with online lenders. Even if you're just starting the research process, it only takes a few minutes to find out how much you're qualified to borrow and with what loan terms. With that information in hand, perhaps with a preapproval letter too, you'll be much more confident walking into the dealership and negotiating the best possible deal on the car itself.

Some providers of auto loans specialize in helping customers with less-than-perfect credit. These lenders can work with you to get a loan that you can afford, and they take into account your whole financial picture - not just your low credit score, previous late payments, or a bankruptcy in your past. Of course, if your credit history is excellent, shopping around for your auto loan online will likely turn up dozens of offers to choose from.

It's important to carefully consider several criteria when evaluating different online lenders. These factors include the following:

  • Reputation. A seemingly-great auto loan is a bad deal if the lender isn't trustworthy. What does the Better Business Bureau say about the company? Have other car shoppers had a good experience?
  • Functionality. How easy does the auto loan site make the borrowing process, from information-gathering to funding? Can you work through the steps of securing your loan quickly and intuitively?
  • Options. To whom does the lender cater (e.g. people with good/bad credit? New/used car shoppers?)? Do you have a wide range of loans to choose from, both with respect to interest rates and length of the loan period? Are there any perks or penalties in the fine print?

TopConsumerReviews.com has reviewed and ranked the best auto loan providers available today. We hope this information helps you get the right financing for your next vehicle purchase or refinance!

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