LendingClub auto loan review: Ability to prequalify for auto loan refinancing

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In a Nutshell

LendingClub offers auto loan refinancing, giving applicants the ability to apply for prequalification. The lender offers competitive interest rates to borrowers with what the company considers to be excellent credit.

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Pros Cons
Prequalification available Must have a current loan open for at least one month, with at least 24 months of remaining payments
No origination fee or prepayment penalty Vehicle age, use and mileage restrictions apply
Not available in all 50 states

What you need to know about LendingClub auto refinancing

If you’re looking to reduce your current monthly car payment or lower the interest rate on your auto loan, LendingClub auto refinancing could be worth considering. LendingClub is an online marketplace that can connect you with investors who back loans. This lender offers a range of lending options that include auto refinancing, personal loans, small-business loans and K-12 education loans.

But if you’re shopping for a new or used car and want to take out a loan, you’ll need to look for financing elsewhere. Though LendingClub does offer personal loans and auto refinancing loans, it doesn’t offer traditional car loans.

Here are some key features of a LendingClub auto refinancing loan that you’ll want to consider.

No origination fee or prepayment penalty

Some lenders charge an origination fee that covers the cost of processing your loan application and paying out the funds, but LendingClub doesn’t charge this fee.

LendingClub doesn’t charge a prepayment penalty either — this means you can repay all or part of your loan early without being charged to do so. And paying off your loan sooner can mean saving money on interest.

When shopping for auto refinancing, make sure to asses all fees that could make your loan more expensive overall.

Vehicle age and mileage restrictions

To qualify for auto refinancing with LendingClub, you must have a current auto loan with a balance between $5,000 and $55,000. You also need to have at least 24 months of remaining payments on your car loan, and your loan must have been initiated at least one month ago.

LendingClub will only consider refinancing of vehicles that are younger than 10 years old and that have fewer than 120,000 miles. You also won’t be able to refinance any ATVs, RVs, motorcycles, commercial vehicles or salvaged vehicles.

And the following makes/models don’t qualify: Chevrolet Express G-Series vans, Cross Lander, Daewoo, Hummer, Isuzu, Mercury, Nissan Leaf, Oldsmobile, Pontiac, Saab, Saturn, Suzuki and Volkswagen diesels.

Offer within minutes if you qualify

LendingClub offers applicants the ability to apply for prequalification, which won’t affect your credit scores. Once you provide some basic personal information, you can receive multiple auto refinancing offers within minutes — if you’re eligible. Although getting prequalified doesn’t mean you’re approved for a loan, it does help you understand whether you’re likely to be approved and the loan terms you might qualify for.

If you formally apply for a loan after selecting an offer, the entire application process can take up to 15 business days to complete. That said, even if you’re approved for a loan from LendingClub, continue to make payments on your existing loan until your original lender confirms that your auto loan has been repaid, or else you might face late penalties.

A closer look at LendingClub auto refinancing

If you’re considering applying for LendingClub auto refinancing, here are some other details to know.

  • Co-borrowers are allowed — LendingClub allows you to add a co-borrower to an application. In some cases, a co-borrower could help you qualify for better terms.
  • State restrictions — Auto refinancing isn’t available to borrowers in every state. Make sure to check if it’s available in your state before taking the time to apply.
  • Loan amount — The payoff amount on your current auto loan needs to be between $5,000 and $55,000.
  • Existing loan — For your current auto loan to qualify for refinancing, it must have at least 24 months of remaining payments. Your car must be registered in the state you live in, and all payments on your current loan must have been made on time. Additionally, all loans must have been initiated at least one month earlier. Also, registration must be current and not due to expire within 30 days from the date you applied (90 days or fewer for California residents).
  • Competitive interest rates — While LendingClub doesn’t provide specific lending requirements, the lender says it offers the most favorable rates to applicants with what it determines are high credit scores; a long, successful credit history; and a low debt-to-income ratio.

Is LendingClub auto refinancing right for you?

If you have an eligible auto loan and are looking for a lower interest rate or a lower monthly payment, LendingClub auto refinancing could be a good fit. But to qualify for the best terms, LendingClub says applicants must have excellent credit, which the company says includes healthy credit scores, a low percentage of outstanding debt relative to income, and a strong credit history.

Even if you’re not ready to make a final decision on refinancing, you can apply for prequalification to check your estimated rate and terms beforehand to see if it makes sense to move forward. LendingClub’s simple process to apply for prequalification could allow you to explore its auto refinancing offers without affecting your credit scores.

But if you need more lending options, like a lease buyout loan or new car financing, you’ll have to find another lender.

How to apply for LendingClub auto refinancing

You can complete a LendingClub refinancing application online within a few minutes. Here are the steps to apply.

  1. Select the state you live in and then click the “Check Your Rate” button on the auto refinancing page. To begin, you’ll choose your reason for refinancing, which can include lowering your monthly payment, getting a lower interest rate or inquiring out of curiosity.
  2. Enter some basic information, including your name, address, date of birth and annual income. You can also specify whether you have a co-borrower. You can then check a box if you agree with the terms of use. You’ll need to provide a password to create a login for future use.
  3. Once you’ve entered your personal information, select the car loan you wish to refinance and click “Refinance This Loan.”
  4. Here you can provide details about your car. This information will help LendingClub determine the value of your vehicle.

LendingClub only offers refinancing on auto loans that appear on your credit reports and that have a remaining balance between $5,000 and $55,000. If your auto loan doesn’t appear on your credit reports, it may be too new or not meet LendingClub’s other refinancing requirements.

If your auto loan does appear on your credit reports, you can submit an application for a refinancing offer. If you qualify, the company says you’ll receive one or two loan offers. If you want to proceed, you can then select the offer that works best for you and complete the final application.

Not sure if LendingClub auto refinancing is right for you? Consider these alternatives.

If you’re looking to refinance your auto loan, LendingClub auto refinancing offers competitive interest rates and a simple process to apply for prequalification. But if your vehicle or auto loan doesn’t meet LendingClub’s refinancing requirements or you want to explore other options, here are a couple of alternatives to consider.

  • OpenRoad Lending auto refinancing: This lender could be a good option for someone who can capitalize on the customer referral program and earn a $100 Mastercard gift card.