Are You Paying Too Much for Your Auto Loan?
How refinancing your auto loan with a better rate could lower your monthly car payment
Buying a car is the second-largest purchase most Americans make – a source of fun and leisure for some, and an essential way of getting to work and getting things done for others. Most people spend hours researching the perfect car to purchase, and 80% of consumers take out a loan to make their purchase. However, many car buyers don’t negotiate their rates and end up paying more than they should.
For example, based on data from the Center for Responsible Lending, consumers pay as much as $25 billion in interest payments every year due to “dealer markup” of their interest rate.
Here at LendingClub, we pioneered a better consumer borrowing experience powered by our marketplace model, and now we are bringing a much-needed innovative and more transparent solution to traditional auto loans. The new Auto Refinance product on our platform offers consumers who qualify access to more affordable monthly payments and interest rates.
By lowering their APR by just 2.5%, car owners can save approximately $1,350 on the total cost of their car loans. People who have a car loan have the opportunity to check their rate in minutes with no impact on their credit score and see if we can unlock access to savings.
The process to apply is fast, secure and completely online. Fill out a short application, and LendingClub will present multiple auto refinancing offers, comparing the terms of your offer against the terms of your existing auto loan, so you’ll see in minutes how much you could save. Rates are based on an applicant’s credit history, income and ability to make payments, as well as the term of the current loan, the amount financed and current value of the vehicle.
We’re launching access to the product in California first, and plan to expand nationally in early next year. The opportunity – for borrowers and for the Lending Club platform – is huge. In the U.S. there are $1 trillion dollars in auto loans outstanding.
By leveraging technology and transparency, LendingClub is able to pass savings on to borrowers. Since 2007, the personal loan product offered through our platform has helped more than one million customers save $1.4 billion in interest payments. Now, we’re changing the game again with Auto Refinance.