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Saturday, February 4th
If you ever considered getting an auto loan with LendingClub in the past but were less-than-thrilled with their peer-to-peer lending format, it's time to give this company another look. Since our last review, LendingClub has done a major overhaul of their business model: they now operate like a traditional bank, with no need to rely on individuals and institutions to invest in each borrower. That makes the experience of getting an auto loan much more predictable here.
Straightforward application process
To apply for a car loan with LendingClub, you'll start by entering the amount of money you want to borrow and selecting "car financing" in the dropdown box. (All loans are structured as personal loans, but putting in the appropriate answer to "What's the money for?" can help LendingClub match you with any offers that might be specific to buying a vehicle.) You can borrow up to $40,000 through this service, but minimum loan amounts are determined by state laws. You'll provide your name, address, date of birth and total annual income, so that LendingClub can verify your credit report. If they can't match your information to your credit history, you'll be asked to enter your full Social Security Number.
You'll pay origination fees and get average interest rates
If LendingClub offers you an auto loan, your rates and terms will be largely affected by your specific situation: how much you want to borrow, your credit score, how much you earn, and so on. You'll find interest rates here that are on par with most personal loan-based funding. LendingClub also charges a one-time origination fee of 3-6%, but they don't specify in advance whether that fee is rolled into your monthly payments or taken out of your loan payout. The lender discloses that their average car loan comes with an origination fee of 5% and an APR of 15.95%. All LendingClub loans have a repayment term of at least three years.
BBB re-evaluation in progress
As mentioned earlier, LendingClub experienced a major shift over the last few years. At the time of this review, their listing with the Better Business Bureau was "NR" (Not Rated): it takes time for the BBB to gather information when such big changes happen. You can be reassured by the "A+" rating and accreditation of LendingClub's funding source, WebBank, in the meanwhile.
Recent customer feedback is overwhelmingly positive
LendingClub also offers live customer feedback on their website: over 57,000 reviews and counting. While there's no way to know which ones were used for auto loans, it's easy to see that people like what they get when using this company. The vast majority of LendingClub's most recent reviews are 4 and 5 stars, and quite a few of the clients leaving comments have used the service more than once. Regardless of the "NR" from the Better Business Bureau, there's plenty of evidence that LendingClub can be trusted with your car loan.
Better than many
Many happy customers
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.
All of LendingClub's changes add up to a new-and-improved ranking among providers of auto loans. We're confident that the BBB listing will soon match the positive recommendations from customer reviews elsewhere. As with any auto loan, we encourage you to read the fine print and understand the exact interest rates, fees and repayment terms you'll be getting. On the whole, though, there shouldn't be any nasty surprises here: LendingClub offers decent auto loans for most consumers.
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.
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:
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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