Lending Club, which claims to be the world's largest online marketplace connecting borrowers and investors, this week announced the launch of an auto refinance product that is designed to give vehicle owners a simple solution to save money on their installment contracts.

The product is being launched initially to California residents, with plans to expand nationally in early 2017.

In less than a minute, consumers can check their rate online to see what they might qualify for based on their credit profile and ability to repay, as well as the make, model, mileage and current value of their vehicle. 

Once a borrower selects an offer, completes the application process and is approved, WebBank will issue a new loan ranging from $5,000 to $50,000, with terms ranging from two to six years and APRs starting at 2.49 percent and up to 19.99 percent, and Lending Club will facilitate paying off a borrower's existing contract.

Lending Club president and chief executive officer Scott Sanborn explained this auto refinance product leverages the company’s technology and expertise to help eligible consumers save money by refinancing into more affordable terms with better rates, clear terms and no hidden fees.

“Tens of millions of Americans borrow over half a trillion dollars every year to buy cars,” Sanborn said. “The practices and processes of the auto lending industry offer consumers limited options and a lack of transparency. This has created a gap between the rates consumers pay and the rates they might otherwise qualify for, unnecessarily driving up debt burdens.

“We are excited to leverage our technology and core capabilities to put thousands of dollars back in consumers' pockets,” he continued.

Lending Club has become one of the nation’s largest platform for personal loans, primarily by helping consumers gain access to lower interest rates as compared to traditional options such as high-interest credit cards. The company declared that currently there is more than $1 trillion in outstanding auto debt, with just a fraction of that figure — $40 billion — refinanced annually.

The company thinks this ratio represents huge potential for both Lending Club's platform and the millions of Americans who could save by refinancing into a more affordable product.

Lending Club estimated the average APR for borrowers on new contracts through Lending Club will be about 1 percent to 3 percent lower than their current contract, translating into an average savings of up to $1,350 over the life of the loan.

“This is Lending Club's first offering of access to a secured loan with an overall risk and return profile that's complementary to the unsecured loans available through our platform. It’s a big step in the evolution of our platform, a win for consumers, and will give our investors access to another proven asset,” Sanborn said.

Customers can find out more about their auto refinancing options through Lending Club at lendingclub.com/apply/site/auto-refinancing.