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Earnest: Personal & Student Loans for Responsible Individuals with Limited Credit History

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Earnest - Personal & Student Loans for Responsible Individuals with Limited Credit History

Updated August 21, 2017

Earnest is anything but a traditional lender for unsecured personal loans and student loans. They offer merit-based loans instead of credit-based loans, which is good news for anyone just starting to establish credit. Their goal is to lend to borrowers who show signs of being financially responsible. Earnest is working to redefine credit-worthiness by taking into account much more than just your score.

They have a thorough application process, but it’s for good reason – they consider different variables and data points (such as employment history, education, and overall financial situation) that traditional lenders don’t.

Earnest*, unlike traditional lenders, says their underwriting team looks to the future to predict what your finances will look like, based upon the previously mentioned variables. They don’t place as much emphasis on your past, which is why a minimal credit history is okay.

Additionally, as their underwriting process is so thorough, Earnest doesn’t take on as much risk as traditional lenders do. With their focus on the financial responsibility level of the borrower, they have less defaults and fraud, which allows them to offer some of the lowest APRs on unsecured personal loans.

Personal Loan (Scroll Down for Student Loan Refinance)

Earnest offers up to $50,000 for as long as three years, and their APR starts at a fixed-rate of 5.25% and goes up to 12.99%. They claim that’s lower than any other lender of their type out there, and if you receive a better quote elsewhere; they encourage you to contact them.

Typical loan structure

How does this look on paper? If you needed to borrow $20,000, your estimated monthly payment would be $599-$638 on a three- year loan, $873-$911 on a two- year loan, and $1,705-$1,744 on a one-year loan. According to their website, the best available APR is on a one-year loan.

Not available everywhere

Earnest is available in the following 36 states (they are increasing the number of states regularly, and we keep this updated): Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., West Virginia, Wisconsin and Wyoming.

Get on LinkedIn

Earnest no longer requires that you have a LinkedIn profile. However, if you do have a LinkedIn profile, the application process becomes a lot faster. When you fill out the application, your education and employment history will automatically be filled in from your LinkedIn profile.

What Earnest Looks for in a Borrower

Earnest AppEarnest wants to lend to those who know how to manage and control their finances. They want borrowers to know the importance of saving, living below their means, using credit wisely, making timely payments, and avoiding fees.

They look at salary, savings, debt to income ratio, and cash flow. They want borrowers with low credit utilization – not those maxing out their credit cards and experiencing difficulty in paying.

Borrowers must be over 18 years old and have a solid education background. Ideally, they attended college or graduate school, have a degree, and have a history of consistent employment, or at least a job offer that gives them the opportunity to grow.

Overall, Earnest wants to make sure borrowers are taking their future as seriously as they are. After all, they’re investing in it! The team at Earnest knows that money often holds people back when it comes to being able to achieve their dreams and goals, and they’re all about helping borrowers get there.

For that reason, Earnest seeks to learn more about those that apply for loans with them. They review every line of your application, and they want to develop a lifelong relationship with their borrowers. They genuinely want to help and see their borrowers succeed.

The Fine Print – Are There Any Fees?

Earnest actually doesn’t charge any fees. There are no late fees, no origination fees, and no hidden fees.

There’s also no penalty for prepaying loans with Earnest – they encourage borrowers to prepay to reduce the amount of interest they’ll pay over the life of the loan.

Earnest states that one of its values is transparency (and of course, here at MagnifyMoney, that’s one of ours as well!), and they are willing to work with borrowers who are struggling to make payments.

Hala Baig, a member of Earnest’s Client Happiness team, says, “We would work with the client to make accommodations that are appropriate to help them through their situation.”

She also notes that if borrowers are late on payments, they do report the status of loans on a monthly basis.

What You Can Do With the Money

The $30,000 loan limit is enough to pay off debt such as an undergraduate student loan, medical debt, or consumer debt, relocate for a job, improve your home or rental property, help you fund a down payment, or further invest in your education.

Earnest’s APR is much, much better than you’ll receive on many credit cards, and it could be a viable way to decrease the burden of debt you’re currently experiencing.

The Personal Loan Application Process

Earnest does a hard inquiry upon completion of the application. They’re very open about this on their website, stating that hard inquiries remain on credit reports for two years, and may slightly lower your credit score for a short period of time.

Compared to Upstart, their application process is more involved, but that’s to the benefit of the borrower. They aim to underwrite files and make a decision within 7 business days – it’s not instantaneous.

However, once you accept a loan from Earnest and input your bank information, they’ll transfer the money the next day via ACH, so the money will be in your account within 3 days.

Student Loan Refinance

When refinancing with Earnest, you can refinance both private and federal student loans.

The minimum amount to refinance is $5,000 – there’s no specific cap on the maximum you can refinance.

We encourage you to shop around. Earnest is one of the best options, but there are others. You can see the best options to refinance your student loans here.

Earnest offers loans up to 20 years. Unlike other lenders,Earnest allows borrowers to create their own term based on the minimum monthly payment you’re comfortable making. Yes, you can actually choose your monthly payment, which means the loan can be customized to your needs. Loan terms start at 5 months, and you can change that term later if needed.

You can also switch between variable and fixed rates freely – there’s no charge. (Note that variable rates are not offered in IL, MI, MN, OR, and TN. Earnest isn’t in all 50 states yet, either.)

Earnest Fixed APRs range from 3.35% to 6.39%, and variable APRs range from 2.57% to 6.19% (this is with a .25% autopay discount).

If you refinance $25,000 on a 10 year term with an APR of 5.75%, your monthly payment will be $274.42.

The Pros and Cons of Earnest’s Student Loan Refinance Program

Similar to SoFi, Earnest offers unemployment protection should you lose your job. That means you can defer payments for three months at a time, up to a total of twelve months over the life of your loan. Interest still accrues, though.

The flexibility offered from being able to switch between fixed and variable rates is a great benefit to have should you experience a change in your financial situation.

As you can see from above, variable rates are much lower than fixed rates. Of course, the only problem is those rates change over time, and they can grow to become unmanageable if you take a while to pay off your loan.

Having the option to switch makes your student loan payments easier to manage. If you can afford to pay off your loans quickly, you’ll benefit from the low variable rate. If you have to take it slow and need stability because you lost a source of income, you can switch to a fixed rate. Note that switching can only take place once every 6 months.

Earnest also lets borrowers skip one payment every 12 months (after making on-time payments for 6 months). Just note this does raise your monthly payment to adjust for the skipped payment.

Beyond that,Earnest encourages borrowers to contact a representative if they’re experiencing financial hardship.Earnest is committed to working with borrowers to make their loans as manageable as possible, even if that means temporary forbearance or restructuring the loan.

Lastly, if you need to lower your monthly payment, you can apply to refinance again. This entails Earnest taking another look at your terms and seeing if it can give you a better quote.

Who Qualifies to Refinance Student Loans With Earnest?

Earnest doesn’t have a laundry list of eligibility requirements. Simply put, it’s looking to lend to financially responsible people that have a reasonable ability to pay their loans back.

Earnest describes its ideal candidate as someone who:

  • Is employed, or at least has a job offer
  • Is at least 18 years old
  • Has a positive bank balance consistently
  • Has enough in savings to cover a month or more of regular expenses
  • Lives in AR, AZ, CA, CO, CT, FL, GA, HI, IL, IN, KS, MA, MD, MI, MN, NC, NE, NH, NJ, NY, OH, OR, PA, TN, TX, UT, VA, WA, Washington D.C., and WI
  • Has a history of making timely payments on loans
  • Has an income that can support their debt and routine living expenses
  • Has graduated from a Title IV accredited school

If you think you need a little help to qualify, Earnest does accept co-signers – you just have to contact a representative via email first.

Application Process and Documents Needed to Refinance

Earnest has a straightforward application process. You can start by receiving the rates you’re eligible for in just 2 minutes. This won’t affect your credit, either. However, this initial soft pull is used to estimate your rates – if you choose to move forward with the terms offered to you, you’ll be subject to a hard credit inquiry, and your rates may change.

Filling out the entire application takes about 15 minutes. You’ll be asked to provide personal information, education history, employment history, and financial history. Earnest takes all of this into account when making the decision to lend to you.

The Fine Print for Student Loan Refinance

There aren’t any hidden fees – no origination, prepayment, or hidden fees exist. Earnest makes it clear its profits come from interest.

There are also no late fees, but if you get behind in payments, the status of your loan will be reported to the credit bureaus.

Who Benefits the Most from Earnest

Those in their 20s and 30s who have a good grip on their finances and are just getting started with their careers will make great borrowers. If you’re dedicated to experiencing financial success once you earn enough money to actually achieve it, you should look into a loan with Earnest.

If you have a history of late payments, being disorganized with your money, or letting things slip through the cracks, then you’re going to have a more difficult time getting a loan.

Amazing credit score not required

You don’t necessarily need to have the most amazing credit score, but your track record with money thus far will speak volumes about how you’re going to handle the money loaned from Earnest. That’s what they will be the most concerned about.

What makes you looks responsible?

Baig gives a better picture, stating, “We are focused on offering better loan alternatives to financially responsible people. We believe the vast majority of people are financially responsible and that reviewing applications based strictly on credit history never shows the full picture. One example would be saving money in a 401k or IRA. That would not appear on your credit history, but is a great signal to us that someone is financially responsible.”

Conclusion

Overall, it’s very clear that Earnest wants to help their borrowers as much as possible. Throughout their website, they take time to explain everything involved with the loan process. Their priority is educating their borrowers.

While Earnest does have a nice starting APR at 3.20%, remember to take advantage of the other lenders out there and shop around. You are never obligated to take a loan once you receive a quote, and it’s important to do your due diligence and make sure you’re getting the best rates out there. If you do find better rates, be sure to notify Earnest. Otherwise, compare rates with as many lenders as possible.

Shopping around within the span of 45 days isn’t going to make a huge dent in your credit; the bureaus understand you’re doing what you need to do to secure the best loan possible. Just make sure you’re not applying to different lenders once a month, and your credit will be okay.

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Erin Millard
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Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Can I Get a Holiday Loan?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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If you’re stressed over the possibility of racking up holiday debt this year, you may be right to worry. In our 2016 holiday debt survey, 65.2 percent of respondents who added debt during the holidays said they did so unexpectedly and didn’t budget for the extra expenses.

This just goes to show what can happen if you take on debt without a plan. If you charge holiday purchases and don’t have a plan to pay them off, you can wind up making monthly payments for longer than you think — and fork over lots of interest payments along the way.

While most people said credit cards were the main source of their debt, nearly 9 percent said they used personal loans to finance their holiday spending, making it the third most popular borrowing option overall.

If you’re considering using a personal loan to fund your holiday shopping this year, it’s important to know the pros and cons first.

First up … what’s a holiday loan?

A holiday loan is simply a personal loan issued by a financial institution, like an online lender, bank or credit union. While these loans are intended to cover holiday expenses, they are not the same as other short-term loans such as payday or cash advance loans.

Since holiday loans are unsecured, you can borrow money without putting up anything as collateral. But because the lender is assuming more risk this way, these loans can carry very high interest rates. That being said, if you have good credit, relatively low levels of debt and sufficient income, you might qualify for lower rates.

Generally speaking, you can get a holiday loan (or other unsecured personal loan) in amounts up to $35,000 with several lenders. However, some may let you borrow quite a bit more. Your interest rate can vary depending on your creditworthiness, and the amount of time you have to repay your loan depends on how much you borrow and the loan terms you select. Personal loans are issued with a fixed repayment period, which can last up to 84 months.

Why get a loan for the holidays?

While some people budget throughout the year, setting aside money for the holiday season, there are plenty of ways to get off track. It’s possible that other expenses will pop up and cause your savings plan to go awry, or that you’ll need to pay for holiday travel or to get your home ready for guests.

Applying for a personal loan may be a good way to bridge the gap between the money you have and the money you need, says Jeff Rose, a certified financial planner and Discover Personal Loans partner. “Borrowing a set amount of money with a fixed repayment term and fixed rate can help you meet your financial obligations over the holidays while having a set budget with a clear payoff schedule, resisting the temptation to rely on revolving debt.”

Rose says he has seen situations where a holiday loan made sense. In one situation, an acquaintance of his was desperate to return home for the holidays to see his dying father on what could be his last Christmas. In that case, taking out a personal loan to travel home was “one of the best investments they’ve ever made,” Rose tells MagnifyMoney.

But, holiday travel isn’t the only reason to take out a holiday loan.

For example, the holidays are a popular time to propose, and “engagement rings can get expensive,” says Rose. You might even find the perfect ring that costs more than you have saved, but the time is ripe for asking.

“That’s where a personal loan can be a financially responsible tool to help you make this purchase,” he adds.

Or, perhaps you want to borrow money to cover the costs of holiday gifts, replace the appliances in your home or make a special purchase for your family.

What it takes to qualify

Getting a personal loan to cover expenses during the holidays is no different than getting a personal loan any other time of year, notes Rose. “Different lenders have different qualifications for loan approval and offer different rates, so my advice would be to research and find what fits your financial situation,” he says.

Generally speaking, however, some typical minimum requirements for a personal loan include being a U.S. citizen or permanent resident, being at least 18 years of age, and having a low debt-to-income ratio.

Your credit score may also impact your ability to get a personal loan. While it’s possible to get a personal loan with a FICO score of 500 or above, the best loan rates and terms go to those with good or excellent credit.

In addition to your credit score, another important requirement for getting a personal or holiday loan is that DTI — debt-to-income ratio — says San Diego financial adviser Taylor Schulte. To calculate your debt-to-income ratio, add up your monthly debt obligations (i.e. mortgage, auto loan) and divide that by your monthly gross income.

“Some experts say a debt-to-income ratio higher than 36 percent can dramatically reduce your chances of getting a loan or increase the interest rate to an unreasonable number,” he says. To improve your debt-to-income ratio, try paying down your existing debts,, picking up extra work to bring in additional income or putting on your game face and asking for a raise.

Schulte also notes that, if all else fails, you could ask a family friend or family member to cosign for your loan. While this can help you get a lower interest rate and better terms, this also means your cosigner is jointly responsible for repayment.

Holiday loans versus credit cards

While a holiday loan can be a good option for consumers who need cash to cover end-of-year or holiday expenses, some consumers also turn to credit cards to meet their needs. This strategy can be advantageous since some credit cards may offer a 0 percent intro APR on purchases for 12 months or longer. But, before you decide between a holiday loan and a 0 percent intro APR credit card, it’s important to note how each one works — and the reasons one option might work better for you than the other.

If you’re considering a personal loan, know that these financial products typically have a fixed interest rate and are structured with equal payments made over a specified time period. In that respect, a personal loan may be easier to pay off in a timely manner since you know exactly when your last payment will come due.

With a credit card, on the other hand, you’ll get access to a line of credit you can use to charge purchases. Because the amount you borrow may vary, you may not know your exact monthly payment. Plus, your monthly payment will increase as you use your card to charge more purchases.

While many cards offer 0 percent intro APR on purchases for more than 12 months, your APR, or interest rate, also resets after the introductory offer is over. If you don’t pay off your balance before that happens, you could wind up paying a hefty interest rate on your balance that is higher than what you would pay on a personal loan.

Things to watch out for

While borrowing money for the holidays can make sense, that doesn’t mean this option is foolproof. There are plenty of risks that come with borrowing.

Risk #1: Borrowing without a plan

Whether you decide to take out a holiday loan or charge your holiday purchases on a credit card, Rose recommends making sure you have a clear plan for the funds you borrow and a true need, along with the ability to repay the loan.

“Also, consider the repayment timeline and total cost of the loan, including any fees, from the start to ensure you can afford the monthly payments,” he adds

Any time you borrow money, you should also make sure you’re not borrowing to buy things you can’t truly afford — or just being wasteful in general. “Around the holiday season, it can be easy to spend more than you planned,” says Rose.

If you rack up too much debt and don’t have a clear plan to pay it back, you could wind up spiraling into more and more debt or taking years to pay it all off. And obviously, more debt inevitably leads to more interest charges layered on top.

Risk #2: Too many fees

Look for personal loans that do not charge additional fees — examples of these would be origination fees and prepayment penalties.

And understand other potential traps, such as with personal loan companies that precompute interest or ask you to pay for unnecessary insurance. In a precomputed loan, the total amount of interest that you would pay during the entire term of the loan is calculated and added to the balance up front.

Risk #3: Not shopping around

Another major risk of personal loans is that you won’t take the time to shop around, Schulte says. Through his personal experience, Schulte has seen how many people wrongly assume their primary bank is the best place to get a loan — even when that’s not even close to being accurate.

“It doesn’t hurt to start with your primary bank to see what they can offer,” says Schulte. “But, failing to shop around could literally cost you thousands.”

Schulte suggests shopping around with at least three to five lenders before making a decision. Fortunately, it’s fairly easy to get multiple loan quotes online.

We recommend you shop online to find lenders without those tricks and traps. A good place to start the search is with LendingTree, MagnifyMoney’s parent company. With a short online form LendingTree will perform a soft credit pull (with no impact to your score) and match you with multiple loan offers.

Because dozens of lenders participate in LendingTree’s program, you may also find lenders willing to accept borrowers with less-than-perfect credit.

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Tips for financial success during the holidays

There are a number of things you can do throughout the year to help yourself financially when the holidays roll around, Rose says. If you’re eager to make the most of this holiday season, or at least escape the holidays with minimal financial damage, consider these suggestions:

  • Save for the holidays all year long.“If each month you put a portion of your income in a separate account designated for holiday spending, you should have a nice amount of money set aside when the season arrives,” says Rose. While it may be too late to start saving for this year’s holiday season, it’s never too early to start saving for next year.
  • Set appropriate expectations for your family.Whether you’re worried you’ll have a skimpier array of gifts under the tree or not, Rose says it’s important to have an upfront conversation with your family (spouse and children) about how many gifts they are going to receive and how much you’re going to spend. “It’s easy to get caught up in the season and start adding more and more to the pile and buying stuff you don’t need,” he says.
  • Stock up on gifts all year long.“You can also take advantage of buying gifts when retailers are having big sales,” says Rose. On Cyber Monday, you can typically get huge savings on everything from clothes to electronics. Buying in advance on these type of sales is huge, and right after this year’s holiday season can be a great time to stock up on next year’s gifts.
  • Opt out of gift exchanges.If you’re involved in multiple gift exchanges or “Secret Santa” arrangements, opting out for the year can help you save some cash. By not participating in these holiday “extras,” you can save money for the gifts that are most important.
Holly Johnson
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Holly Johnson is a writer at MagnifyMoney. You can email Holly here

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PNC Personal Loan Review

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Updated November 08, 2017
With about 2,800 branches in 19 states and the District of Columbia, PNCis the fifth largest bank in the United States. It’s primarily located in the eastern half of the US, with most of its branches and its headquarters being in the northeast.

If you’re looking for a personal loan from a trustworthy, familiar source, PNC might be your answer. It offers an unsecured personal loan on par with most lenders, as well as a secured loan that allows up to $100,000 to be borrowed.

Most traditional banks haven’t been able to compete with online-only lenders in the personal loan space, so let’s see how PNC compares.

Personal Loan Details

PNC has three personal loan options – secured and unsecured installment loans, and a line of credit. For the purpose of this review, we’ll be focusing on the installment loans.

Most online lenders only offer unsecured loans. In case you’re not sure of the difference:

  • Secured loans require an agreement to let your creditor use your assets as collateral in the event you default on your loan. This protects the creditor as it can sell your assets and recoup the cost of the loan.
  • Unsecured loans are the exact opposite – there’s no collateral involved. There’s less risk for the borrower and more for the creditor.

While secured loans seem to take the creditor’s side, the bonus is they often have more favorable terms because creditors are taking on less risk. You may have access to better interest rates or more money.

A simple example of a secured loan is a mortgage loan. Your home (property) is used as collateral. If you don’t pay your mortgage, your mortgage lender can seize the property and sell it.

Now that you know what it means to have a secured or unsecured loan, we’ll take a look at the differences between the details.

PNC’s unsecured personal loan allows you to borrow between $1,000 and $25,000 on a variety of terms: 6 months, and 1, 2, 3, 4, and 5-year options are available.

PNC’s secured loan allows you to borrow much more – between $2,000 and $100,000. The collateral required for this loan is non-real estate (a vehicle, for example).

Both the unsecured and secured loans have fixed interest rates.

Unfortunately, you can’t check APRs or sample payments for secured loans online, and when we called, we were told they vary based on your credit. They were unable to give any APR range.

The APR for unsecured loans varies by the loan amount:

  • For a $5,000 loan, the APR ranges from 9.49% – 21.99%
  • For a $10,000 loan, the APR ranges from 6.74% – 19.24%
  • For a $15,000 loan and up, the APR ranges from 5.99% – 18.49%

A payment example: if you borrow $20,000 on a 5-year term with an APR of 7.74%, your monthly payment will be $403.04.

The Pros and Cons

Applying for a personal loan with a bank is typically a bit more time consuming than applying with an online-only lender. This is because banks are thorough with the documentation they request.

However, PNC states the application should take no longer than 15 minutes online.

Unfortunately, if you’re looking at the secured loan option, you can’t apply online. You can only apply by phone, or in person at a branch. You can apply online with the unsecured loan option.

PNC’s APRs are also quite high, especially for the loan amounts. Many online-only lenders are offering better rates starting in the 5% range.

An additional negative might be that PNC only offers fixed rates. While variable rates aren’t stable, they’re usually lower than fixed rates. If you’ll have the ability to pay the loan off soon after it’s disbursed, having the lower variable rate can be beneficial.

If you fall on hard times, there’s a possibility that PNC will allow you to defer your payments, but this is reviewed on a case-by-case basis.

PNC urges borrowers to contact the bank at the first sign of trouble – before their payment is due.

Application Process and Documents Needed to Apply

If you’re applying for an unsecured loan, you can easily apply online and be done within 15 minutes. PNC recommends having the following information ready:

  • Your photo ID
  • Annual income, plus any other sources of income you have
  • Employer information (if you’ve been working there for less than 2 years, have your previous employer information as well)
  • Address/proof of residence (if you’ve been living there for less than 2 years, have your previous address ready)
  • If you’re applying with a co-applicant, you’ll need the same information for them
  • If you’re applying for a personal loan to consolidate debt, you’ll need account statements as PNC needs to know your account number, monthly payment, and outstanding balance

PNC’s application is straightforward, and it also has a checklist available for you on the application in case you need to reference it.

PNC will use a hard credit inquiry when applying for a loan with them.

Who Qualifies for a Personal Loan With PNC?

To have the best chances of being approved for a loan with PNC, you need very good and established credit, along with a reasonable debt-to-income ratio. Your loan terms greatly depend on these two factors. Being a customer with PNC doesn’t increase your chances of getting approved.

Just a note – if you choose the secured loan and want to use your vehicle as collateral, it must be less than 8 years old and have less than 80,000 miles on it.

Who Benefits the Most from a Personal Loan With PNC?

Borrowers looking for a larger loan amount would benefit from the secured personal loan with PNC.

SoFi is the only other personal loan lender offering that much money, and while the loan is unsecured, it doesn’t have any physical locations. If you feel more secure applying in-person and receiving assistance from a trusted bank, you might prefer to go with PNC.

However, most borrowers will benefit from going elsewhere to get an unsecured personal loan.

The Fine Print

There is no prepayment penalty for either loan, so you can pay your loan in full at any time.

There’s no origination nor annual fee for the unsecured personal loan.

When called, a PNC representative wouldn’t disclose any other fees associated with the loan (late fees, returned payment fees, etc.).

Transparency

Since there is so little information on its website about the secured loan, it was important to find out as many details as we could from a call.

Unfortunately, the PNC representative that answered the call wasn’t very helpful. The most she could offer was that the loan rates and terms were dependent upon credit, and that the credit score and debt-to-income ratio of an applicant was extremely important.

When asked about late fees for the loan, she said “another department” handles that, and was unable to transfer the call to the appropriate personnel, as you need to have a loan with PNC before fees can be discussed.

This was rather disappointing. Most lenders are open to discussing these details with potential borrowers – fees can make a huge difference when considering loan options. To be one of the few lenders unwilling to discuss fees and rates beforehand kicks PNC’s transparency down a notch.

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Alternative Personal Loan Solutions

As mentioned, SoFi* is the closest competitor as it allows borrowers a maximum of $100,000 as well. The minimum you can borrow is $5,000. Most personal loan lenders have limits of around $25,000 – $35,000.

SoFi offers fixed rates and variable rates, while PNC only offers fixed rates for its installment loans. SoFi’s fixed APR ranges from 5.49% – 14.24%, and its variable APR ranges from 5.19% – 11.34%, if you’re enrolled in autopay (with a cap of 14.95%).

There are no fees associated with SoFi’s personal loan except for a late fee, which is 4% of the amount due or $5 – whichever is less.

You can borrow funds on 3, 5, or 7-year terms, and personal loans are available in 46 states, including the District of Columbia.

SoFi also offers unemployment protection. If you lose your job through no fault of your own, you can apply for payment assistance.

SoFi uses a soft credit inquiry when you first apply to get your rates, which means your credit score won’t be affected. If you choose to move forward with the loan, a hard credit inquiry will be used.

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If you’re looking for good alternatives to PNC’s unsecured loan, take a look at Earnest. You can borrow between $2,000 and $50,000 on a 1, 2, or 3-year term.

There are no hidden fees associated with Earnest’s personal loan, and it’s offered in 23 states plus the District of Columbia.

You’ll need a minimum credit score of 720 to be eligible for approval with Earnest, and a minimum of 700 to be approved with SoFi, but both lenders take other factors into account, unlike PNC. Your employment history, education, and salary matter as well.

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It Pays to Shop Around

While it would be convenient to have the first lender you apply with be the best solution, that’s not always the case, even with a trusted lender like PNC. Personal loans from bigger banks are falling by the wayside as online-lenders are offering much better rates and terms. Do yourself a favor and shop around to get the best rates, even if you have a prior relationship with the bigger names out there. If you shop around within a 30-day window, your credit won’t take a big hit.

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Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Top 4 Personal Loans for an Engagement Ring

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Engagement ring

Updated November 08, 2017
Getting engaged is an exciting yet nerve-wracking milestone. You’re eager for your partner to say “yes” and hoping she’s impressed by what she sees when you open the box.

The best way to afford the ring of her dreams is planning early and saving up. Financing an engagement ring should be your absolute last resort. After all, there are other larger expenses that come after marriage including moving, buying a home or starting a family that you could spend that money on instead.

Still, if you decide financing is right for you, here are a few personal loans that provide funds for engagement rings:

Earnest

Rates from 5.25% APR

Earnest has the lowest interest rate of the loans on our list and no origination fee. Loan terms are 1, 2 and 3 years. Earnest will lend you $2,000 to $50,000. Other than your credit score, Earnest will look at your income, education, earning potential and other factors to decide if you’re eligible for the loan. There’s no origination fee and no prepayment penalty. There is, however, a hard pull of your credit report.

Earnest could be a good option if you have limited credit history, but an offer letter or current position that pays you more than enough money to cover loan payments. After submitting an application, you’ll get a response within 2 business days.

LendingClub

Rates from 5.99% APR

LendingClub is a peer-to-peer loan marketplace where people who need to borrow money are matched up with investors. You can get a loan for up to 5 years. You can borrow up to $40,000. The origination fee is 1% to 6%. Your origination fee is assigned based on your credit profile. The higher your credit score the less you’ll pay for origination. You can check to see if you’re approved and your rate without harming your credit score.

After applying for LendingClub, peer investors will see your profile in the marketplace and hopefully fund your loan. Once your loan is funded by investors and your application documents check out, you’ll get the money wired to your account.

To get the very best rates through LendingClub you’ll need an excellent credit history, low debt-to-income ratio and a high credit score among other factors.

LendingClub loans are not available in Iowa or West Virginia.

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Karrot

Karrot is not currently offering new loans. Should you have an outstanding loan, Karrot states they are still servicing those loans.

Karrot gives out personal loans from $5,000 to $35,000. Loan terms range from 3 to 5 years. The loan has an origination fee of 1.05% to 4.75% that’s non-refundable and deducted from the loan upfront. Karrot doesn’t charge prepayment penalties. Other than origination, fees will only come into play if you skip out on a payment, have a check returned or request copies of your loan documents.

Shopping for loan rates on the site won’t ding your credit score. Karrot doesn’t go into specifics about the credit score you need to qualify, but you do need to at least have a credit history and a bank account to verify your income.

Prosper

Rates from 5.99% APR

You can borrow as little as $2,000 and up to $35,000 from Prosper, another peer-to-peer lending marketplace. Loan terms are 3 and 5 years. Prosper loans have a 1% to 5% origination fee, but no prepayment penalties.

At a minimum, you must have a 640 FICO score to qualify for Prosper. You also need to have a debt-to-income ratio less than 50%. Shopping for rates with Prosper won’t impact your credit score either.

Honorable Mention – LendingKarma

LendingKarma isn’t a lender. Instead, it’s a site that manages loans between people who know each other. As a rule of thumb, you should avoid borrowing or lending money to friends and family since involving money in relationships tends to cause drama.

But, if someone you know agrees to help out and you’re both on the same page, LendingKarma can make your life easier. LendingKarma takes care of the logistics of borrowing including the contract, payment schedule and friendly reminders. The fee for contract administration is paid one time and $50 to $100 per loan.

Final Thought

Financing an engagement ring is not something we recommend. It’s just not worth going into debt over. Explore all of your options instead. Here are a few:

  • Get what you can afford in cash now and upgrade when you have more money.
  • Try unclaimed diamond and discount jewelry stores to get a deal.
  • Skip the diamond altogether for gems that are a little more affordable like amethyst or sapphire. These gems are popular now anyway.
  • Buy a stone similar to a diamond like moissanite or a replica until you can get a real one. If you choose a “fake” starter ring, make the decision as a couple. You don’t want her to find out from another source that her ring isn’t a true diamond.

At the end of the day, an engagement ring is supposed to symbolize commitment. Sadly in some ways it’s morphed into a symbol of status. That doesn’t mean you should feel pressured to get a ring (or ask for a ring) you can’t afford. Do what’s best for you.

Taylor Gordon
Taylor Gordon |

Taylor Gordon is a writer at MagnifyMoney. You can email Taylor at taylor@magnifymoney.com

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Marcus Personal Loan Review: Goldman Sachs Takes on Online Lenders with Exclusive New Loan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

woman working on laptop

Updated November 06, 2017

Goldman Sachs officially made its debut in the personal lending market this week with Marcus, its long-awaited online lending platform. With Marcus, the 147-year-old investment bank will offer consolidation loans up to $30,000 to credit-worthy consumers.

Goldman Sachs began to expand its audience from the super-wealthy to the average consumer earlier this year when it launched an online savings account with a super low $1 deposit. Named for founder Marcus Goldman, Marcus will offer the average American a way to “save money over high-interest credit cards,” the company says. If this works for the megabank, it could lead to similar changes in the industry, challenging the dominance of credit card issuers.

Another reason this is a big deal: Goldman has a big advantage over Silicon Valley competitors when it comes to funding. As a deposit-gathering bank, Goldman can raise FDIC-insured deposits. But Goldman also has deep relationships with institutional investors who might want to purchase consumer loans. Companies like Prosper use Goldman to help them fund their loans: now Goldman will be competing with its own customers. Plus it has the power of a well-established brand behind it. Marcus could be a major disrupter for developing online personal loan businesses.

In this Marcus by Goldman Sachs review, we will explain:

  • Who’s eligible for a Marcus loan
  • How to see if you’re prequalified
  • How to apply, how long it will take, and what documents you will need
  • The terms of the loan offers
  • Pros and cons

Who’s Eligible for a Marcus Loan

First you need the “secret” code

Marcus is super exclusive right now. You can only apply if you got a special code in the mail from the firm inviting you to use it. The bank says it’s doing that to get feedback on the service for now, but will offer Marcus to a broader audience in a few months. If you don’t have a code, you can sign up to be the first to know when Marcus expands its service. Also, you can’t apply just yet if you live in Maryland, but the bank says they are working on it.

So, if you received a code in the mail, and you live in one of the qualifying 49 states, you can go to Marcus.com and apply to see your offers for loan amounts and interest rates. The rate you get (6.99% – 23.99%) will depend on your creditworthiness and the length of the term of the loan. The fintech firm bases the amount of your loan offer on your creditworthiness, information in your application, and the company’s review of your ability to pay back the loan.

Healthy credit

Goldman says they are looking to service consumers with “prime” credit scores. That distinction usually lands someone at about 660 or higher on the FICO scale. The higher your credit score, the better your chance of being approved.

Having too many recent credit inquiries on your credit report could raise a red flag to their underwriters. Note: A soft pull, like the one used by Marcus to prequalify, will not count as a hard inquiry on your credit report. Although not reported, we expect that Marcus will have credit policy requirements on top of the credit score minimum. For example, people who have missed payments recently will likely be rejected, regardless of their credit score. Marcus will be a way for people with good credit scores to get a lower interest rate.

Debt-to-income ratio under 40%

You can get denied if your debt-to-income ratio is too high. For example, if your total monthly payments (including rent/mortgage and all items on your credit bureau) are more than 40% of your income, you would likely be denied.

If it’s above 50%, you might have a hard time getting approved for credit by most lenders. The ratio is calculated with the monthly payments that show up on your credit report, and other debt that shows up on your bureau. If your total monthly bills are $500, and your total monthly income is $2,500, you would have a 20% debt-to-income ratio.

A job

You must be employed and be able to verify your income to get approved for a Marcus loan.

Marcus will also consider other factors in your loan application, such as your intended use of the loan, to determine how much you’ll be offered. The bank will likely have its own combination of rules and scoring to determine your final offer.

How to See if You’re Prequalified

If you want to avoid a hard pull on your credit report, see if you prequalify for a Marcus Loan here. It is considered a soft pull on your credit and won’t harm your score. Later on in the process — if you decide to get the loan — you’ll get a hard pull on your credit score.

How to Apply

The Marcus site’s layout makes it super easy to apply for a personal loan. Of course, the first step would be inputting that special code you got in the mail. After that, it’s similar to other loan applications.

Step 1: The basics

First up, fill out the basic information in the online application. You’ll be prompted to fill out basic personal and financial information such as your name, address, income, etc. to determine if you qualify. You’ll also be asked for information about how much you’d like to borrow, what you’ll use the money for, among other questions about the loan. The soft pull occurs after you submit that information.

online application for personal loan

Step 2: Choose from your offers

If you qualify for a Marcus loan based on the information you submitted, you’ll be presented with a list of options for loans, rates, and terms.

Step 3: Submit

If you decide to proceed with the loan, you then have to complete a few more steps. At that point, you’ll add information to verify your identity such as your full Social Security or tax I.D. number or be asked for government-issued photo identification and additional information as necessary. Marcus might also ask for documents to verify your income such as recent pay stubs, bank statements, or a W2. This is when the hard pull happens, which will impact your credit score.

screen-shot-2016-10-14-at-3-06-06-pm

Terms

Marcus offers debt consolidation and credit consolidation loans up to $30,000 with an annual percentage rate (APR) that can be low as 6.99% and as high as 23.99%.

You can borrow the money for 2 to 6 years.

There are no fees, and your rate will be fixed for the life of the loan.

You can use a debt consolidation loan to pay off credit card debt, medical bills, or financed purchases such as rings, cars, or furniture. You cannot use a Marcus loan to refinance an existing student loan.

Pros & Cons of Marcus

Pros:

No origination fee. Because Marcus forgoes an origination fee — a fee you’d pay to receive the loan— the APR is your interest rate, even if you pay it off before the full term has expired. That’s unlike competitors like Lending Club and others that charge origination fees. If you pay an origination fee and end up paying off the loan ahead of time, your actual APR will be higher than stated.

No late fees. If you miss a payment, you won’t be charged a fee, but you will add on to the life of the loan and add more interest, and your final payment will be larger. This doesn’t save you from hurting your credit score, however. Your late payments will be reported to a credit agency, and will negatively impact your score. Eventually, after missed, partial, or late payments, your loan may default, and that will also impact your credit score.

Defer payments after a year of good behavior. If you’ve made payments on time for a full year, Marcus gives you the option to defer one payment. Marcus will also waive your interest payment for that month. The payment will extend your loan by one month, at which point you’ll pay the interest on it. If you miss a payment or make one late payment, you will lose access to the payment deferral feature for the life of your loan.

Cons:

Marcus is exclusive. At this point, Marcus is extremely exclusive, so you need to be invited to use it to try it out and see if you qualify. You also can’t sign up for it if you live in Maryland.

Lower APR with a balance transfer card. If your goal is to pay down credit card debt, you might be able to find a low or 0% APR balance transfer card and pay less overall. If you don’t have much debt, a balance transfer may be a better option.

Lower APR with SoFi and LightStream. If you want a personal loan without an origination fee, there are other options. SoFi and LightStream do not charge origination fees. They also offer APRs as low as 5.49% and 2.49%, respectively, and both top out around 15% on the high end compared to 22.9% with Marcus. With SoFi, you can check your rate without hurting your credit score. Just be warned: LightStream (which is a division of SunTrust Bank) does not offer soft pull functionality.

Make sure to compare your offer from Marcus with offers from SoFi and LightStream, as you could possibly end up with a lower APR overall. The downsides here would be that LightStream requires a minimum 680 FICO score, so it could be a bit more difficult to qualify for a loan. They also use a hard pull to determine your eligibility. Also, SoFi might take longer than the speedy 1-2 business days that Marcus promises to get your money to you since they have to connect you with other individuals.

Don’t get distracted by “no fees.” It’s easy to get pulled in by the promise of “no fees, ever,” but you should definitely still shop around because you might find a lower rate or better terms.

Several alternatives to Marcus exist to apply for a personal loan. We have compiled a list of the best personal loan companies here.

Every personal loan company has its own pricing model, which means you could get very different interest rates from different companies. It is in your best interest to shop around for the best rate before making a decision.

Some of the best alternatives today include SoFi and LightStream because of the many reasons mentioned above. Competitors such as Santander, Discover, and Best Egg or credit unions like SAFE Credit Union and Affinity, may give you a better offer as well depending on the information you provide. Some may have an origination fee, but use a lower credit score threshold to qualify applicants, or they might offer you a better APR.

Final verdict:

We believe that the growth of personal loans is great news for consumers. For people drowning in high-interest credit card debt, a low rate on a structured personal loan could offer significant savings. Marcus is good news for consumers. Goldman Sachs is using its access to low-cost funding as a way to challenge the big credit card companies. Their no-fee, low-interest rate loan could be a great way for consumers to consolidate debt. Unfortunately, it’s pretty difficult to gain access to the platform right now since it’s so exclusive, but we expect that to expand over time.

You can learn more about us and how we make money here.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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Personal Loans

Getting Loans from Someone Other than a Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Getting Loans from Other Bank

Updated November 06, 2017

Personal loans allow borrowers to have access to a fixed amount of money at a fixed interest rate, with a fixed monthly payment and you know when you’ll have completely paid off the loan. They are a great resource for someone looking to refinance debt and can’t use a balance transfer. If you need cash, personal loans are usually the best way to borrow. Personal loans tend to be much cheaper and simpler than a credit card.

How to get a personal loan?

Step 1: Check and see if you can get a loan with an Internet-only lender.

Ideally, you should start your shopping with a site like LendingTree, which lets you shop at dozens of lenders with just one simple online form (described below). LendingTree is the parent company of MagnifyMoney.

Step 2: Go to your local credit union and see if they can match or beat your P2P loan

Step 3: Take the loan with the lower interest rate

If you aren’t eligible for a P2P loan from an Internet-only lender then try your local credit union.

Internet-only lenders

The rise of technology allowed a new wave of lenders to offer an alternative to traditional bank loans. Peer-to-Peer lending (or P2P for short) allows borrowers to receive loans from “peers” often in the form of individual investors or hedge funds, endowments and pension funds.

Peer-to-peer loans are interesting because they were developed specifically for the digital environment. This makes them accessible with a few clicks on a computer and a relatively simple application process. Companies like Prosper, LendingClub and Upstart facilitate matching borrowers with investors. There is no need to visit a bank branch. The aim of P2P lending is to give a borrower lower interest rates while giving investors higher returns.

Interestingly, some big banks have acquired or built their own online lenders which are offering consumers even better rates. SunTrust has done that with the acquisition of LightStream, and Goldman Sachs has recently invested in building Marcus.

Step 1: Shop Online for a Personal Loan (without hurting your score)

[Disclosure: LendingTree is the parent company of MagnifyMoney.] At LendingTreee, you can shop for a loan at dozens of lenders with just one online form (that takes less than 5 minutes to complete). LendingTree will perform a soft credit pull (with no impact to your score), and you can get real offers – including how much you can borrow and the interest rate. We think this is one of the best places to start your personal loan shopping journey.

LEARN MORE

LightStream*

Pro:

  • If you have excellent credit, LightStream offers some of the lowest interest rates in the market. Rates start as low as 2.49% (to finance an auto) and 5.49% (to refinance credit card debt).
  • You can get the money by the next business day. This is a remarkably fast process.
  • LightStream has a rate match promise: if you find a lower interest rate somewhere else, they will match it.
  • There is no pre-payment penalty and no origination fee.

Con:

  • You must have excellent credit to qualify.
  • LightStream does not have “soft pull” functionality. If you apply for a loan, there will be a hard inquiry on your credit report.

LendingClub*

Pro

  • Their interest rates are most likely lower than other loans with an APR range of 5.99% to 35.89%.
  • You can find out your interest rate without a hard inquiry on your credit score. Prosper uses a “soft pull” so there will be no point reductions on your credit score, nor an inquiry left on your report for finding out the interest rate.
  • There is no pre-payment penalty(fine if you pay off the loan early), but they won’t refund your loan fee.

Con:

  • You must have a high credit score (600 or higher) to be eligible to get a personal loan from LendingClub.
  • You probably won’t be accepted if you have a history of missed payments.
  • There is an upfront fee, but your APR will include the fee. Be sure to compare the APR and not just the interest rate when you’re shopping around.

Upstart*

People with minimal credit history can turn to Upstart for an opportunity to be eligible for a personal loan.

Upstart evaluates where you went to school, your area of study, your grades and employment history to determine your eligibility for a loan and your interest rate.

Step 2: Credit Unions

Credit unions are not-for-profit organizations that offer alternatives to traditional banks. They have more of an emphasis on serving their community than worrying about a corporation’s bottom line. Unlike banks, credit union members own the credit unions.

Credit unions do offer loans, but first you must become a member of the credit union. Some credit unions are closed. But others (like PenFed) will let you join if you make a $15 donation to a charity.

Pros

  • Loans from a credit union usually have lower interest rates than a bank, and possibly the lowest you can find.

Cons

  • You will need to join a credit union, and may not qualify for a loan so you could be out the cost to join.

PenFed offers a 9.99%-14.99% interest rate with no upfront fee for a term of five years. However, you will need to have a 700+ credit score to be competitive for this personal loan.

Non-bank lenders

OneMain is a non-bank lender owned by Citigroup. You will have to physically visit a branch to get approved. But, the process usually takes less than 30 minutes. Borrowers with high credit scores should first explore the P2P space and credit unions before turning to OneMain, because it will be a more expensive form of borrowing.

Pros:

  • If having face-to-face contact is important to you, then you can visit physical branches.
  • OneMain will approve people with credit scores as low as 550, so it is possible to get a loan when other reject you. Although expensive, OneMain will be much less expensive than payday loans or title loans.

Cons:

  • You have to visit a branch, even if you’re preapproved online. If you don’t have a branch near you, this could be a serious hassle.
  • There will be a hard inquiry on your credit report
  • Likely higher interests rates (APRs) than a loan from P2P lenders like Prosper or LendingClub
  • A few complex terms and conditions

Warning:

  • Don’t bother with the insurance products they’ll try to sell you.

Step 3: Take the Lowest Interest Rate

Personal loans can be valuable tools to help pay down debt, reduce interest rates and save you hundreds to thousands of dollars. But remember; don’t rush into a personal loan just because it seems like a good deal. Take the time to do your research, shop around and ensure your getting the absolute best interest rate you can. Even the difference of .01 can make a difference in the long run.

Read where to find the best personal loan rates online here.

Erin Lowry
Erin Lowry |

Erin Lowry is a writer at MagnifyMoney. You can email Erin at erin@magnifymoney.com

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Best Options for a No Fee Personal Loan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Best Options for a No Fee Personal Loan

Updated November 06, 2017

Interest isn’t the only cost to consider when shopping for loans. Fees can also eat away at your money. Many lenders increase profits by charging all sorts of fees – application fees, origination fees and even prepayment fees! So it’s important you do your homework and find a no fee personal loan.

Below, we help get your research started by rounding up personal loan providers that respect their customers enough not to charge insane fees. This post also lists other lending companies you may already be familiar with, which offer no origination fees and no prepayment fees but do include steeper late fees.

LightStream

LightStream may be an unfamiliar name, however it’s operated by one of the largest banks in America. LightStream is the online lending division of SunTrust Bank, the 12th largest bank (in terms of total assets) in the United States. LightStream offers up to $100,000 in personal loans for a maximum term of 84 months with 2.49% to 17.49%. It is so confident in its application experience, that any dissatisfied customer will receive a $100 credit towards their personal loan. LightStream also offers a very competitive home improvement loan.

LightStream Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • No late fee

What LightStream Wants to See in Its Personal Loan Applicants

  • A 720+ credit score
  • 5 years or more of significant credit history is preferred
  • No delinquencies
  • Money saved in a bank
  • Some variation of credit lines
  • Proof of stable and sufficient income

*referral link

SoFi

SoFi offers personal loans ranging from $5,000 to $100,000. Terms are 3, 5, or 7 years with fixed APR ranges of 5.49% – 14.24% if enrolled in autopay. Borrowers can use SoFi personal loans for reaching nearly any goal: home renovation, credit card payoff, and more.

Something that makes SoFi stand apart from other lenders is that the company offers unemployment insurance. That means an eligible borrowers who have lost their jobs person can go 3 months in a row (12 months total) without making a loan payment. SoFi also offers job placement services.

SoFi Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • A late fee applies if a payment is more than 15 days late. The late fee is the lesser of 4% of the payment due or $5.

Getting Approved for a Personal Loan by SoFi

  • You must be age of majority in your state (18, 19, or 21 – depending on your state)
  • You must be a US citizen or permanent resident
  • You must have graduated from a SoFi approved school
  • SoFi does not use FICO, but the product is for prime and super-prime consumers. You must be current on all of your accounts and have no previous bankruptcies.
SoFi

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Earnest

Besides being a no-fee lender, Earnest is appealing because the company is far from a traditional lender. Instead of focusing on credit scores, Earnest uses a merit-based lending system. Earnest aims to analyze a person’s trustworthiness instead of relying on a credit score. This is good for people with a ‘thin’ credit file – young college students, for instance. However, the application process isn’t nearly as brief as with other lenders.

Earnest Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • No late fee – customers are directed to call into support if they are having trouble paying. They can get their payment amounts readjusted.

Getting Approved for a Personal Loan by Earnest

Firstly, it’s only available in 36 states: Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., West Virginia, Wisconsin and Wyoming.

As mentioned earlier, it’s not a quick process. Potential borrowers must be at least 18 years of age and have a good education. Ideally, applicants will have a college degree and a steady job. An applicant’s debt to income ratio will also be analyzed. With this lender, it’s not just a matter of checking off boxes as one goes through the application process. Earnest really likes to get to know its potential borrowers.

*referral link

Other No Origination Fee/No Prepayment Penalty Loans

The following are also lenders that don’t have origination fees or a prepayment fee. However, it’s important to be aware of the high late fees associated with these lenders. If paying the loan is already hard, late fees with just add to the pain. But still keep these other lenders in mind when shopping for a loan.

Discover

The most unique aspect of the Discover (yes, like the credit card) is that the loan comes with a 30-day money-back guarantee. If a borrower discovers a better loan within 30 days, they can just send Discover back the money with no interest charged.

Discover offers loans up to $35,000 with APR ranging from 6.99% to 24.99%. Loan duration is anywhere from 36 to 84 months. That’s much longer than most lenders offer.

For a Discover personal loan, applicants must be at least 18 years of age and a credit score of at least 660.

Santander

Santander is only available in certain states: NH, CT, DE, DC, RI, MA, ME, NY, NJ, PA, MD, or VT. The Santander personal loan boasts no origination fee and no prepayment penalty. The late payment fee is an even $20. A personal loan can range anywhere from $5,000 to $25,000. A successful applicant will have at least a 680 credit score.

PenFed

PenFed is another possibility if late fees aren’t a concern. PenFed is short for Pentagon Federal Credit Union. As intimidating as that may seem, military service is not required. In fact, anyone can join PenFed by making a one-time charitable contribution to one of its military-based charities. Tax-deductible donations can be as low as $14. That would more than pay for itself if a great personal loan is secured. A PenFed personal loan has no origination fee, no prepayment penalty but it does have a late fee of up to $25. You need a minimum 700 credit scores.The APR is as low as 9.99% on a maximum loan of $25,000.

USAA

USAA boasts no origination fee and no prepayment fee. But USAA personal loans come with a late fee of 5% of the remaining balance of the loan. No wonder that fee isn’t advertised anywhere online. That’s the highest late fee (by far!) of any of the loans on this page.

The application process is very similar to that of PenFed. Successful applicants will have a credit score of at least 700. The maximum $20,000 loan can be set for a term as high as 72-months at 8.99% to 10.99%. One neat aspect of applying with USAA is most applications result in instant approval.

Next Steps Towards a No Fee or Low Fee Loan

It’s important to assess all aspects of a loan before signing and avoiding fees is an excellent start. You also need to shop around for the best option. If you do all your shopping within a 30-day window it will minimize the impact on your credit score. There are many personal loans available; it’s just a matter of finding one to fit your wants and needs.

* We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Pay Down My Debt, Personal Loans

No Credit, or Poor Credit? Here Are Your Loan Options

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Mixed Race Young Female Agonizing Over Financial Calculations in Her Kitchen.

Updated November 03, 2017
Don’t have a credit history established, or have a low credit score? It can be challenging to find lenders that will approve you if you have a thin credit file or poor credit, but it’s not impossible.

You still have options when it comes to personal loans, and these options come from reputable lenders.

What’s even better is that these lenders will only conduct a soft credit inquiry when you apply to find out what rates they can offer you. This means your credit score won’t be negatively affected, so you don’t have to worry about damaging it further.

In this article we’ll review how to find reputable lenders, why you should stay away from two popular options people turn to when they’re in a poor credit situation: payday and title loans. And what you can do to increase your credit score.

Check for approval without a credit hit

It’s worth noting low scores aren’t always indicative of how responsible you are with credit. A low score, or thin file, could just be a result of a short credit history. If you have a clean history (no late payments, low credit utilization, etc.), you’ll have an easier time obtaining a loan over someone who has had delinquencies on their record, but might have a higher score.

If you have bad (or no) credit, you should apply to as many lenders as possible that use a soft pull to ensure you don’t hurt your credit score. We recommend starting with LendingTree, where you can use one short application form to get rates from multiple lenders at one.

LendingTree: Dozens of lenders partner with Lending Tree – and many of them may approve people with poor or no credit. You can fill out a simple form and compare multiple offers in minutes. We highly recommend starting your shopping experience here first to have a good chance of getting a loan. (Note: MagnifyMoney is owned by LendingTree)

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Here are 5 personal loan lenders for people who have less than ideal credit (meaning under 700) that will let you check your rate without impacting your credit score:

OppLoans: If you have no or bad credit, OppLoans is an online lender that could help. If your credit score is below 630 (or if you have no credit score at all), OppLoans will work with you. You can check to see if you are approved without impacting your score. And – unlike payday lenders – OppLoans offers much more affordable borrowing options. They also have great reviews – with a customer service rating of 4.9/5 stars.

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LendingClub: People with credit scores below 600 can get approved. You can borrow $1,000 – $40,000 and get the money deposited into your account within a few days. Fixed APRs range from 5.99%-35.89% on terms up to 5 years. LendingClub has an origination fee of 1%-6% on its loans. LendingClub is not available in Iowa or West Virginia.

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Upstart: Borrow between $3,000 and $50,000 for up to 5 years with APRs ranging from around 9.45% to 29.99%. While the minimum credit score needed to qualify is 640 (Upstart will also consider applicants who don’t have a score), you must have a clean credit history. You could also be eligible for next day funding.

Avant: You could borrow anywhere from $2,000 to $35,000 through Avant, and you could receive your funds as soon as the next business day. APRs range from 9.95% – 35.99%. Although the minimum credit score varies, you have a much better chance if your score is above 580. Avant is available in all states except Colorado, Iowa, West Virginia, and Vermont.

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Prosper: Another peer-to-peer marketplace lender, Prosper’s loans are similar to LendingClub’s. You can borrow $2,000 to $40,000 with APRs ranging from 5.99%-36.00% on 3 and 5 year terms. There’s an origination fee of 1%-5%, and its minimum credit score is 640.

There are several other personal loan lenders that will do a soft credit check. You can find them on our personal loan table here. While many of these lenders have minimum credit score requirements, you’ll find they take other factors into account aside from your FICO score.

Additionally, since these lenders only do a soft credit pull, you’re free to shop around for the best rates without fear of damaging your credit score.

Why You need to Stay Away from Payday Loans and Title Loans

Not eligible for personal loans? Don’t turn to payday loans or title loans.

If you’re not familiar with either, you might be wondering what’s so bad about them. After all, they seem convenient – most offer “fast cash,” and if you live in a populated area, you’ll probably find a payday loan or title loan shop nearby.

However, both require you to give something in exchange for funds, and neither require any sort of stringent approval process to ensure borrowers can afford the loans.

Payday Loans

Payday loan companies require you to write a check for the amount you wish to borrow, plus a set fee. The lender holds onto the check until the loan becomes due (typically on the borrower’s next payday, hence the name), and gives the borrower the money they need in the meantime.

The problem? If you can’t pay when the loan balance becomes due, you can choose to extend the term of the loan. When you do, you get hit with more fees. The APR on payday loans is extremely high, so you’ll pay more each time you extend your loan term.

Payday loans are on the smaller side – anywhere from $100 to $1,000. According to PayDayLoanInfo.org, the average term is two weeks, with 400%+ APRs. When you factor in fees, the APR can go up to 780%.

[Stuck in a Payday Loan Trap? Here are the ways out.]

Title Loans

Title loans require you to give your car’s title to the title loan company in exchange for an amount equal to the appraised value of your car. You usually have to own your car outright to be eligible for a title loan, and the term is around 30 days.

Like payday loans, if you can’t pay on time, you may choose to roll the loan over to the next month, incurring more fees. If you can’t pay back the loan at all, you run the risk of the lender repossessing your car.

As you can tell, both of these options are bad ideas if you want to stay clear of getting into a horrible debt cycle. These loans are purposely too expensive for borrowers to afford. If people are looking for quick cash because they don’t have any, it stands to reason they’ll be in the same situation a week or two from the time they borrow.

Non-Profit Credit Counseling to Rebuild Credit Score

You want to make every effort to improve your credit score, even after you’re approved for a loan, because having a good credit score will benefit you in other areas of life. For that reason, you might want to consider teaming up with a non-profit credit counseling service.

These companies can provide you with personalized advice on your specific situation so you can work on rebuilding your credit score. They can also work with your creditors and negotiate on your behalf to possibly lower interest rates or get better terms on your existing debt.

It can be tricky to find a reputable credit counseling agency – even with a non-profit organization. If you’re interested in a credit counseling service, USA.gov lists a few considerations and questions you should ask before committing. You want to make sure the credit counseling agency is actually going to help you get your credit and financial situation under control.

Alternative to Ways to Build Your Credit Score

If you don’t qualify for a personal loan, and don’t want to turn to payday or title loans, there are a few steps you can take to increase your credit score. This post has 6 tips to help get you started. These methods won’t boost your score immediately, but over time, you’ll see an improvement.

The Federal Trade Commission also has 6 alternatives to payday loans on its website, which might apply to your situation. For example, if you’re a member of a credit union, you could inquire about a loan through them as you have an established relationship already.

Also, if you haven’t started budgeting and tracking your spending, you should – doing so can help you spot problem areas with your money.

Read the Fine Print and Shop Around

Regardless of which loan you decide to apply for, always consider the cost. You want to make sure you’re getting the best possible terms, which means getting the lowest APR offered. Typically, cash advances and credit cards are going to have higher APRs than personal loans but lower than payday lenders.

Remember to always read the fine print. Loans of any type have plenty of fees associated with them that you should avoid. Shop around for the best deals and work on improving your credit score so better options become available to you.

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Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Should You Finance or Lease Solar Panels for Your Home?

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Finance or Lease Solar Panels

Updated November 03, 2017

Who doesn’t want to save the planet and maybe save a little money along the way? One way to chip in and do your part is by changing where you get your electricity on a day-to-day basis. Instead of using traditional electricity to power your home, you can look into greener alternatives like solar panels.

These systems used to be very expensive, however, as more people have moved into the market, the pricing on these sun-gathering energy collectors has come down rapidly.

On top of decreased costs at the time of purchase, solar panel systems can actually have a profitable return on investment. Here are some of the costs and benefits you should take under consideration before making the plunge.

Cost of solar panels

When figuring out upfront costs, you’ll want to account not just for the panels, but also for their installation. The national average cost to purchase and install a solar panel system is $3.50 per watt, with the average American home requiring a 5,000 watt system. That means that the average upfront investment is $17,500.

The price for your power system may vary your particular home in your state. You should, of course, do local research, but we’ll go with the national average for the purposes of our calculations.

The Federal government offers a 30% tax credit for the installation of solar or wind systems at residential properties, so this will effectively bring the average cost down to $12,250. On top of federal tax credits, also do some research for state and local tax credits or programs that can further bring down costs.

Over the life of your solar panels, which will likely be between 25 and 40 years, you will have to perform regular maintenance. National averages for this cost come out to a little over $20 per year.

You will also want to call your insurance provider to see what will happen to your homeowner’s premiums. In many cases the costs stay the same or even go down as those who are eco-conscious enough to install solar panels are currently viewed as more responsible than the general populace. The rate cut is even more likely if you have the panels set up in your yard rather than on your roof. Some insurers will raise rates, though, because of the added load to the structure when panels are installed on the roof.

Benefits of using solar panels

If you’re going to spend about $12,500 on a solar panel system and then pay at least $500 in maintenance over the term of its life, warm and fuzzies about saving the planet may not be doing it for you. You’ll want to know there’s a return on investment.

Producing solar power is not inherently cheaper than using regular electricity at this point in time. When you purchase your solar panels, you are essentially paying for your electricity for the next 25 to 40 years up front. Depending on where you live, this may or may not be cheaper than actual costs of electricity.

However, one beauty in making this investment is that you can actually sell off any excess energy you generate. Those that deliver electricity have to meet certain quotas of green energy per month. They do this less often by generating green energy themselves, and more often by buying green electricity from others.

That green energy is bought and sold via Renewable Energy Certificates, or RECs. When you generate 1 megawatt-hour in excess of what you actually use, you will be issued a certificate that you can then sell to your local utility company. How much you get for each of these certificates will vary both by geographic location and current market value, but to give you an idea, last year you could get about $200 per certificate in the state of New Jersey.

Financing Your Solar Panels

Don’t have $17,500 up front to invest? Because of the potential savings on energy, depending on your area, and the added bonus of RECs, it may be worth it to finance. (You’ll have to wait until tax season to see that 30% credit from the IRS.)

The government offers Energy Efficient Mortgages to fund these types of improvements. In order to obtain one, you will need to get your home assessed so the government can calculate how much savings the solar panels would provide to you. That way, they know the loan is a good investment.

You can also take out a Home Equity Line of Credit (HELOC) where your home serves as collateral if you are unable to repay your loan. Taking out a HELOC means you have the potential to lose your home if you fall behind.

Another option is personal loans. Here are some of the most competitive lenders in the personal loan industry, all of them providing unsecured lending, so you won’t have to hand over any collateral.

SoFi

SoFi provides unsecured personal loans, currently at a fixed rate of 5.49%-14.24% APR and variable rate of 5.19%-11.34% APR depending on your cash flow and credit history. Loans can be for either 3-, 5- or 7-year periods with no origination fees, and if you lose your job during that time, SoFi may temporarily pause your payments and help you find new employment through its Career Services resources.

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LightStream

LightStream actually provides loans specifically for the purchase of solar panels. Shorter terms of 2-3 years based on our average loan come at a fixed rate of 4.99% with AutoPay for those with excellent credit, and rates increase with your term up to 7.99% on 7-year loans for those with excellent credit. It charges no origination fees.

Earnest

If you have a credit score of 720 or over, you may want to look into Earnest. It provides personal loans in 1-, 2- and 3-year increments at starting fixed interest rates of 5.25%, 5.35% and 5.49% APR respectively, based on our $17,500 number. These loans also have no origination fees.

Upstart

Upstart loans do come with an origination fee of 3.655%-8%, but they are more likely to accept a wider range of applicants than the above lenders. Its interest rates are competitive starting at 9.45% APR, though those with lesser credit scores can end up paying up to 29.99% APR if approved. Upstart’s loans come in three-year terms.

When to Lease

If you can’t qualify for a personal loan, or simply don’t want to go through the hassle of installation and maintenance, there is hope yet. You don’t necessarily have to purchase your own solar panels in order to turn your house into a green machine.

Many companies now allow you to lease panels. Typically you lease panels for 20 years, with most companies installing and maintaining your panels for free. You pay them a flat monthly fee that will generally increase somewhere between 1.5% and 3% per year depending on your contract. In some years, that will be less than your electric company increase its prices, and in other years it will be more. The national average for annual energy cost increases to consumers between the years of 2003 and 2015 was 3.19%.

The reason companies are able to install and maintain your panels free of charge is that they will be taking all of those tax credits; you don’t get to claim them come April. They will also be benefiting from the sale of any RECs your household generates.

You are likely to save a little money long-term when you lease, and you’ll be making a decision that will help the planet for future generations. Doing so costs very little up front, and you won’t have to deal with any stress related to maintenance over the years.

If you’re looking for an investment that will net you cash long-term, though, buying is the way to go if you can afford it or get your hands on a personal loan with a competitive interest rate. Be sure to do research relative to your local community as far as costs and energy generation goes, as solar panels will be far more financially advantageous in some regions of the country over others.

Brynne Conroy
Brynne Conroy |

Brynne Conroy is a writer at MagnifyMoney. You can email Brynne at brynne@magnifymoney.com

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Top 6 Personal Loans for Handling Medical Debt

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Personal Loans for Handling Medical Debt

Updated November 03, 2017
With medical debt plaguing 26% of adults, it’s no wonder people are looking for an easier way to pay it back. According to a study by The Henry J. Kaiser Family Foundation, this problem isn’t exclusive to the uninsured, either. Those who have health insurance are struggling to afford crippling bills as well.

While there isn’t always an “easy” or quick solution, refinancing your medical debt with a personal loan that has lower interest rates and more favorable terms may help. However, before you consider refinancing, you should exhaust your options with your hospital first.

If you’re looking for help with affording medical debt, we’re covering how you can try to lower the amount of medical debt you owe, and which personal loan lenders are the best for refinancing medical debt.

Negotiating Medical Debt With a Hospital

Are you struggling to pay back any medical debt you owe? Your first stop should be the hospital at which you received treatment. You may be able to negotiate with the billing department or settle on a lower amount owed. The worst thing you can do is ignore your medical bills only to have them sent to collections. You want to do everything in your power to avoid that.

Plus, some hospitals, particularly non-profits, offer something called charity care for low-income families or those who are uninsured. You never know what financial aid programs your hospital has unless you ask.

Have you tried negotiating with the hospital to no avail? Then you might want to consider trying a professional service, such as copatient.com. Besides negotiating your medical bills on your behalf, Copatient also reviews your bills for any errors.

Hospitals aren’t exempt from making billing errors, and it’s important to ensure you’re on the hook for the correct services received, especially if you have insurance coverage. In fact, on its website, Copatient states that 80% of the billing statements it reviews contain errors. Unfortunately, medical bills can be hard to understand, which is why having a second pair of trained eyes to review it may help.

As Copatient doesn’t require you to pay for its services unless it’s successful at negotiating your bill, it could be worth a try. It charges you 35% of what it saves you, so if you were able to save $8,000, the fee would be $2,800.

Maybe you’ve tried negotiating your medical debt and either weren’t successful, or still can’t afford to pay. In that case, refinancing your medical debt is a solution you should look into, especially if your interest rates are high. Here are our top six choices for personal loan lenders for those with excellent and good credit.

1. SoFi

We recommend refinancing with SoFi for a variety of reasons, and medical debt is no exception. While it doesn’t have a specific program for medical debt, most personal loan lenders will allow you to use a personal loan for just about anything, medical expenses typically included.

SoFi has some of the lowest APRs of any lender, with fixed rates ranging from 5.49% to 14.24%, and variable rates ranging from 5.19% to 11.34%. You can refinance $5,000 up to $100,000 on 3, 5, or 7 year terms as well.

There’s no minimum FICO score you need to qualify, though higher is better, as is not having any negative marks. Having a stable employment and education history will help you qualify for a better rate, too. You must be employed to be approved for a loan, and SoFi’s personal loan isn’t available to residents of Mississippi or Nevada.

SoFi uses a soft credit pull to provide you with estimated rates, and if you want to move forward with the loan, then it will use a hard credit pull. That means you can see if the loan is workable for you before committing and before having the inquiry impact your credit.

There are also no hidden fees with SoFi, so what you see is what you get in terms of the loan amount as there is no origination fee and no pre-payment penalty.

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2. Earnest

Earnest is similar to SoFi in terms of its low APRs. Fixed APRs range from 5.25% to 12.99%, but terms are 1, 2, and 3 years. This makes Earnest a good option for those with less debt, though you can refinance $2,000 up to $50,000.

The only downside to Earnest is that it isn’t available in many states. You must be a resident of the following states to be approved: AK, AR, AZ, CA, CO, CT, FL, GA, HI, IL, IN, KS, MA, MD, ME, MI, MN, MO, NC, NE, NH, NJ, NM, NY, OH, OK, OR, PA, SC, TN, TX, UT, VA, WA, Washington DC, WI, WV, and WY.

If you don’t reside in a state on this list, check back often as Earnest has been adding several states to its roster over the last year.

You should have a minimum credit score of 720 to be approved for a loan with Earnest, though it also takes into account your savings, employment history, education history, and income. You can apply for a loan using your LinkedIn account (which pre-fills some fields for you), but it isn’t necessary.

Earnest doesn’t have origination fees or pre-payment penalty fees, though it does use a hard credit inquiry when you complete the application. According to its FAQ, it is working on building a tool that will give you preliminary rates and terms on a personal loan without a hard pull.

3. LightStream

LightStream is an online division of SunTrust and offers great deals on personal loans. You can refinance $5,000 up to $100,000 on terms ranging from 2 to 7 years. Fixed APRs range from 5.99% to 16.19%, and there are no origination fees. Rates do vary based on the term you select, so be sure to look at all your options here.

LightStream has one of the faster application processes – if you get all the necessary documents in by 2:30pm ET, you may be eligible for same-day funding. Additionally, if you’re unhappy with the services provided by LightStream, its customer service is backed by a $100 guarantee.

LightStream requires a hard credit inquiry, which makes it a slightly less attractive option. You might want to check with the personal loan lenders that use a soft credit pull first.

4. Upstart

Upstart and the following two lenders are better options for those with less-than-ideal credit, or those that haven’t been getting approvals elsewhere.

You can refinance $1,000 up to $50,000 with Upstart (be aware it says $35,000 on its FAQ page and $50,000 when you check your estimated rates). Fixed APRs range from 9.45% to 29.99% on its 3 and 5 year terms.

You need a minimum FICO score of 640 to qualify for a loan with Upstart, but that’s just one part of the equation. You should still have a clean credit report – no delinquencies, no collections, less than six inquiries on your credit report within the last six months, and you’ll also be required to verify your income.

Upstart has origination fees ranging from 3.655% to 8% of the loan amount, so take this into consideration when applying.

The good news is that Upstart uses a soft credit pull to give you estimated rates. A hard credit inquiry will happen should you choose to move forward with the loan.

5. Prosper

Prosper, like LendingClub below, is a peer-to-peer marketplace. That means investors (individual and corporate) can fund your loan request, giving you a slightly better chance of approval.

You can refinance between $2,000 and $35,000 on terms of 3 and 5 years, and fixed APRs range from 5.99% to 36%. That’s a high cap, and as with any loan, you should run the numbers to make sure consolidating your medical debt this way will save you money.

Prosper isn’t available to residents of Maine, North Dakota, or Iowa. You need a minimum FICO score of 640 to qualify, and Experian is used to run credit. A soft pull is used at first, and a hard pull will not be used unless your loan gets funded.

There are no fees at all to post a listing to the marketplace, but if you want to fund your loan through Prosper, you will face “closing fees” ranging from 0.50% to 4.95%, depending on the “Prosper Rating” your loan is given. This rating is Prosper’s proprietary grading system, mostly for the benefit of investors, so they can evaluate how risky your loan is.

6. LendingClub

LendingClub is another peer-to-peer marketplace and its loan offerings are similar to those of Prosper. You can refinance $1,000 up to $40,000 on terms of up to 5 years. Fixed APRs range from 5.99% to 35.89%, and there are origination fees ranging from 1% to 6% of the loan amount.

LendingClub will loan to those with lower credit scores – as low as 600 – depending on the situation. You should still have a good track record with limited missed payments in the mast. LendingClub does not make loans in Iowa or West Virginia.

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Shop Around for the Best Rates and Negotiate

If you’re one of the many people in the United States struggling to afford medical bills, then start working on a solution to overcome it. Try negotiating with your hospital’s billing department, review your statements for any errors, call your insurance company to see if anything can be done, and check to see if a personal loan will make things easier on you.

Depending on the interest rate your medical debt is at, a personal loan may or may not be the right fit for you. It’s important to get all the details so you can run the numbers to see if you’ll come out ahead with savings. That’s why it’s a good idea to shop different lenders, especially with the ones that don’t use a hard credit inquiry right off the bat. This allows you to get a preview of the types of rates and terms that are available to you.

Whichever route you decide to take, make sure you stay on top of your financial obligations. Don’t ruin your credit and your financial situation because you can’t afford to pay; this will only make things harder for you in the future. Take all the actions listed here instead of ignoring your bills, and you’ll come out ahead.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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