Upstart vs. Caribou: Which offers better auto loans?

Both Upstart and Caribou are appealing if you want to refinance your auto loan entirely online. Upstart is best if you don’t have the best credit, while Caribou is better if you want to apply with a co-borrower.

Upstart vs. Caribou at a glance

Upstart auto loans

Best for nontraditional eligibility criteria

• Bankrate’s view

  Launched in 2012 by a former Google executive, Upstart is not a direct lender. Instead, it partners with more than 90 banks and credit unions to offer auto loan refinancing and personal loan products.

  It considers factors like your education and work history in addition to your credit score. This may open doors for applicants who may not qualify for a refinance through traditional lenders and other marketplaces like Caribou.

  However, Upstart does not permit co-borrowers, which may be prohibitive for some people.

• Pros and cons

  

  Pros

  • Flexible eligibility requirements: Upstart looks at your background and employment to determine if you qualify.
  • Range of repayment terms: You can take as little as 24 months to as long as 84 months to repay your loan — though Caribou offers the same options.
  • Generous mileage limit: Upstart considers vehicles as old as 13 years and with up to 140,000 miles.

  

  Cons

  • No co-borrowers: Co-borrowers and cosigners are not allowed. You can submit paperwork to include a co-owner, but the co-owner will not share responsibility for making payments.
  • High potential APR: The lenders in Upstart’s network have a maximum APR of 29.99 percent.
  • Long funding timeline: It may take up to 9 days for Upstart to process your application, find a lender and fund your refinance.

Caribou auto loans

Best for bundling additional products

• Bankrate’s view

  Established in 2016, Caribou is a much smaller company with a narrower scope. Despite its much smaller size and more specific focus, Caribou may be a better fit for some borrowers. The potential to include a co-borrower on the application may make Caribou a more accessible option for some.

  Caribou also has the option to add various asset protection products, like GAP and cosmetic protection. And it offers prequalification before processing applicants’ loan applications. If you want to compare rate eligibility before committing, this soft credit check helps you avoid a hard inquiry.

• Pros and cons

  

  Pros

  • Bundle with insurance: In addition to refinancing, you can also add additional products like an extended warranty and gap insurance.
  • Co-borrowers allowed: You can add a co-borrower, which may help you qualify for lower rates.
  • Low starting APR: The lenders in Caribou’s network offer a competitive starting APR of 5.48 percent — and the maximum APR of 28.55 percent is still lower than Upstart’s maximum.

  

  Cons

  • Processing fee: While it may not be added to the cost of your refinance, you could face a processing fee of $499.
  • High minimum refinance: You must be able to borrow at least $10,000 to refinance through Caribou. If you owe less on your current loan, Upstart will be a better option.
  • Fair credit score needed: Unlike Upstart, you need a fair credit score of at least 640 to qualify for an auto loan with Caribou.

How to choose between Upstart and Caribou

Caribou is the obvious choice if you want to include a co-borrower, but you may want to opt for Upstart anyway if you only need to refinance a small amount.

APR range

Caribou boasts a slightly lower maximum APR than Upstart, while Upstart has a slightly lower minimum. However, keep in mind that the lowest rate advertised is not always the one that you are offered.

Minimum credit score

Upstart is especially good if you have little remaining on your current car loan or if you have bad credit. The lenders in its network accept scores as low as 510. So, while you can’t apply with a cosigner like with Caribou, you may not need one to qualify.

Caribou, on the other hand, has a credit score minimum of 640, which falls in the fair credit range. However, the option to add cosigners may increase your odds of approval. It may also be able to help you lower your interest rate more than Upstart.

Loan amount

If you have a large amount left on your auto loan, Caribou is the better option since you can refinance up to $125,000. By comparison, Upstart may be better suited for borrowers looking to refinance smaller loan amounts from $3,000.

Fees

Caribou works with lenders that may charge origination fees. Upstart, however, doesn’t charge an origination fee.

While it is a hefty processing fee, Caribou is upfront about the steep price tag — and it’s not directly charged to you. Instead, Caribou charges the lender, which may pass it along to you. Other lenders charging a similar fee may not disclose it so clearly before you apply. Most importantly, you may not be charged for it at all. Check to see if it will be added to your bill before signing.

Bottom line: Which lender is better?

Both Upstart and Caribou offer different opportunities and benefits for drivers looking to refinance their auto loan. Upstart is a solid choice for borrowers who want to prioritize qualifying independently for a refinance, while Caribou offers a customer focus that hesitant borrowers may especially appreciate.

And if you are matched with a lender through Upstart or Caribou, double-check that it has good ratings and meets your needs. You are never obligated to apply with a lender just because you are matched, and you may be able to find better rates elsewhere.

Compare more lenders before applying

Before you refinance an auto loan with Upstart or Caribou, get quotes from at least three to five other lenders to compare rates and repayment terms. That way, you can increase your chances of getting the best deal for your financial situation. 

RateGenius

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LendingClub

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