[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.
- 22Shares
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.
In 2018 Tesla will introduce solar Panels on the Model SC, in which your CAR will charge your HOUSE.
How come I can’t find anything about this partnership online? Is this an april fool’s prank? 🙂
Yes, this story is a complete fabrication – there is no partnership between Lending Club and Tesla. This is an April Fools joke.
well done sir
Didn’t last year’s post foreshadow the future a bit?
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.
WOW….I completely bought into the idea….. Got me good…
Thanks Chris. I worked hard to make it as believable as possible.
My first thought upon seeing the headline was you’ve gotta be kidding.
You were! Nice job.
Thanks Rob. I had a lot of fun putting that story together. Nice when you don’t have to actually fact check anything…
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 🙂
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….
Hahaha, I love it. You fooled a manager.
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)?
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.