Free Updates

Exclusive content to your inbox for FREE!

Lending Club Partners With Tesla And Introduces Auto Loans

by Peter Renton on April 1, 2014

Tesla partnering with Lending Club

[Update: The article below is not true. There is no Lending Club partnership with Tesla. So, if you have just stumbled upon this story you should know that it was published on April 1st as an April Fools joke.]

In a joint press release today, Lending Club and Tesla have announced a brand new loan program. In an industry first Lending Club will be providing auto loans to buyers of new Tesla vehicles in this brand new program.

“Tesla has been a leading force for innovation and disruption in the auto industry,” said Lending Club CEO Renaud Laplanche in a statement today. “Lending Club is having a similar impact on financial services so it made sense for us to partner with Tesla in this new service.”

Details of this new partnership have yet to be revealed but sources tell me that these will be five year loans of up to $50,000. Interest rates will depend on the creditworthiness of the borrower but given that a Tesla Model S starts at a retail price of $69,900 these will be very much prime borrowers. So, I expect these loans will be rated A-grade and have interest rates in the mid to high single digits.

Sources have also told me that these loans will actually be secured with a lien on the vehicle. This is very significant news. Not only will this be Lending Club’s first foray into auto loans it will also mark Lending Club’s first offering of asset backed loans.

When I asked about whether these loans would be available for individual investors, not surprisingly Lending Club said they will be offered initially as whole loans to select institutional investors only. But just as with their small business loans Lending Club expects to eventually make these loans available to all investors.

My Take On This New Partnership

I have to think that these loans will be very popular with investors. Despite the high maximum loan size and relatively low interest rates, the fact that these are the first asset-backed loans offering by Lending Club means there will likely be high demand from investors.

If Lending Club was partnering with Ford or General Motors I would probably be a little more skeptical of this move. But given that these will be loans to high-end borrowers and a partnership with a successful and innovative automaker I can only see this as a successful move for both companies.

I have reached out to Elon Musk’s office at Tesla for comment but have not heard back yet as of this writing.

{ 16 comments… read them below or add one }

Andrew N April 1, 2014 at 11:11 am

Tesla isn’t the only Elon Musk company that Lending Club is partnering with. I heard that Solar City customers will be able to take out Lending Club loans to buy solar panels, and then repay those loans by selling the electricity they generate.

Reply

Frankie April 1, 2014 at 2:45 pm

In 2018 Tesla will introduce solar Panels on the Model SC, in which your CAR will charge your HOUSE.

Reply

Sean Murray April 1, 2014 at 11:22 am

How come I can’t find anything about this partnership online? Is this an april fool’s prank? :-)

Reply

Peter Renton April 1, 2014 at 12:13 pm

Yes, this story is a complete fabrication – there is no partnership between Lending Club and Tesla. This is an April Fools joke.

Reply

Sean Murray April 1, 2014 at 12:57 pm

well done sir

Reply

Frankie April 1, 2014 at 2:45 pm

Didn’t last year’s post foreshadow the future a bit?

Reply

Peter Renton April 1, 2014 at 4:05 pm

Last year was about Warren Buffett investing in LC, which didn’t come to pass. But there has certainly been a lot of investor interest in LC since then – just not from the Oracle of Omaha – at least to my knowledge.

Reply

Chris April 1, 2014 at 3:59 pm

WOW….I completely bought into the idea….. Got me good…

Reply

Peter Renton April 1, 2014 at 4:06 pm

Thanks Chris. I worked hard to make it as believable as possible.

Reply

Rob L April 1, 2014 at 5:22 pm

My first thought upon seeing the headline was you’ve gotta be kidding.
You were! Nice job.

Reply

Peter Renton April 1, 2014 at 8:47 pm

Thanks Rob. I had a lot of fun putting that story together. Nice when you don’t have to actually fact check anything…

Reply

Kristin April 1, 2014 at 5:28 pm

I went as far as sending the link to all the guys in my office that drool over Tesla! Only prank that got me today!!! Thanks for the laugh :)

Reply

Peter Renton April 1, 2014 at 8:51 pm

Thanks Kristin. You are not alone. Hundreds of people were fooled today. I know of at least one hedge fund manager who called Lending Club today to inquire about investing in auto loans….

Reply

B. Mason April 2, 2014 at 9:01 am

Hahaha, I love it. You fooled a manager.

Reply

Yonathan April 2, 2014 at 1:07 am

Wow..I can’t believe the Warren Buffett prank is already a year old. How long do you think before LC launches auto loans (especially after the SantanderUSA deal)?

Reply

Peter Renton April 2, 2014 at 7:01 am

I do think we will see auto loans from Lending Club in the near future but I don’t think it will happen until at least 2016.

Reply

Leave a Comment

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Previous post:

Next post:

Real Time Analytics