Key takeaways
- Upstart may be better for borrowers with poor credit looking to refinance their auto loans since it has a low minimum credit score requirement.
- By comparison, Caribou may be a better choice if you need to refinance a high loan amount — the maximum amount you can refinance is $125,000.
- The key to securing the right auto loans for your needs is comparing multiple lenders and looking past just the advertised APR.
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 | Caribou | |
|---|---|---|
| Bankrate score | 4.0 | 4.4 |
| Better for |
• Borrowers who want educational attainment and/or work history factored into their eligibility • People with lower credit scores |
• Applicants with a co-borrower • Borrowers looking to bundle their loan refinance and add-ons |
| Loans offered | Auto loan refinancing | Auto loan refinancing |
| Loan amounts | $3,000–$60,000 | $10,000–$125,000 |
| APRs | 6.89%-29.99% | 5.48%-28.55% |
| Loan term lengths | 24–84 months | 24–84 months |
| Fees | Up to $999 origination fee | Possible $499 processing fee |
| Minimum credit score | 510 | 640 |
| State footprint | 46 states and Washington, D.C. | 45 states and Washington, D.C. |
| Time to funding | 15 to 20 days | Varies depending on lender |
| Autopay discount? | No | No |
| Refinancing requirements |
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Upstart auto loans
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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.
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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 20 days for Upstart to process your application, find a lender and fund your refinance.
Caribou auto loans
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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 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.
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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 minimum and maximum APR than Upstart. Rates fall between 5.48 and 28.55 percent versus 6.89 and 29.99 percent for Caribou and Upstart, respectively. 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
Both Upstart and Caribou work with lenders that may charge origination fees. However, Upstart’s maximum origination fee is almost $500 higher than Caribou’s.
While it is a hefty processing fee, both lenders are fully upfront about the steep price tag. 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.
The 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.
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