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P2P Lending: The Complete Guide for Peer-to-Peer Lending

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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Peer-to-peer lending is a modern name for a practice as old as money itself — individuals loaning money among themselves. What’s modern is the scale afforded by technology. Ten years ago, an individual needing a loan to start a business, consolidate debt, or cover unexpected home improvements would have been limited to borrowing from his or her immediate friends, family, and acquaintances outside of a traditional bank loan. Today, online peer-to-peer (P2P) lending platforms connect individuals who need to borrow money with investors willing to lend. Technology now allows perfect strangers to borrow from and lend to each other.

For many people, borrowing from peers can be a great alternative to borrowing from a bank, but it’s not for everyone. We’ll take a look at how peer-to-peer lending works and what you need to know before you apply.

How P2P loans work

The Small Business Administration (SBA) defines P2P lending as, “Individual investors providing small sums to lend personal loans to individuals via internet platforms.” Some of the most popular platforms include LendingClub, Prosper, Upstart and Funding Circle, although there are several others.

Potential borrowers can apply for credit on the platform, and borrower qualifications vary by lender. For example, the interest rate a LendingClub borrower receives depends on an internal score developed by the company, which is one of the largest P2P lenders. “They will give you a grade between A (the best grade, qualifying for the highest amount at the lowest rates) and G (the lowest grade with the highest interest rate),” a LendingClub spokesperson told MagnifyMoney.

LendingClub currently caps its personal loans at $40,000. Prosper caps its loans at $35,000. Typical loan terms range between three and five years.

Who invests in P2P loans

P2P loans may be funded by an individual investor or a group of investors. According to MarketWatch, P2P loans can be a good way to diversify the portfolio of income investors who take time to understand the risks and rewards. Income investing generates a cash income in the form of dividends and interest. In other words, investors don’t buy a stock, bond, or other investment and wait for it to appreciate in value so they can sell it and earn a profit. Simply holding on to the investment generates income.

P2P loans are an income investment because once an investor opens an account and chooses to participate in a loan, principal and interest payments (less fees charged by the platform) are deposited into the investor’s account on a monthly basis.

The investors may be individuals or institutions, such as banks, pension plans, foundations, finance companies, asset managers, insurance companies, broker-dealers, and hedge funds. Individual investors can open an account with Lending Club with an initial investment of $1,000, but other platforms are available only to institutions and accredited investors (those who can demonstrate high-earned income and net worth).

Connor Murphy, a public relations and communications specialist with Funding Circle, says their platform in the U.S. is only open to accredited investors and institutional investors. “We actually use the term ‘marketplace lending’ rather than peer-to-peer lending,” Murphy said, “because investors on our platform globally include large financial institutions and even governments.”

Whether the investor is an individual with $1,000 or an institution looking to invest $250,000, they select loans to invest in and earn monthly returns on. According to Sarah Cain, head of communications at Prosper, borrowers do not know their lenders. “They simply know if their loan has been funded or not,” Cain said.

Why P2P loans?

P2P lending platforms started gaining traction more than a decade ago as a way to bypass banks and use technology to connect investors with money to the borrowers that need it. P2P lenders have claimed their online platforms help them reduce costs, and that, in conjunction with analytics and proprietary algorithms, allow them to offer borrowers lower interest rates or provide loans to individuals who have been refused loans by traditional banks.

LendingClub currently advertises APRs for personal loans from 5.99 percent to 35.89 percent. The company surveyed borrowers during the first seven months of 2017 and found that borrowers who received a loan to consolidate existing debt or pay off credit card balances reported that they saved an average of $287 per month. However, that statistic compares high-interest credit card rates with personal loan rates – not P2P personal loan rates to bank personal loan rates.

As of August 2017, the average APR on credit cards carrying a balance was 14.89 percent, but banks may offer much lower rates for personal loans. Of course, whether you choose a P2P loan or a bank loan, having a high credit score can help you get the lowest rate offers, while a lower credit score will likely stick you with higher interest rates, if you are approved for a loan at all.

Some borrowers just prefer the idea of avoiding large, traditional banks. But as with any borrowing decision, you should compare apples to apples when seeking financing for any purpose and shop around for the best rate.

Applying for a peer-to-peer loan

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To apply for a loan, a potential borrower visits a P2P lending website and fills out an application.

The platform leverages online data and technology to assess risk, determine a credit rating and assign an appropriate interest rate. Applicants may receive offers within a few minutes and can evaluate options without impacting their credit score. Once you select a loan offer, you’re required to complete an online application that gathers information about your income and employment as well as identifying information, such as address and Social Security Number.

You may also be required to provide additional documentation to verify your identity, income, and employment. That may include:

  • Tax forms such as W-2s and 1099s
  • Tax returns
  • IRS Form 4506-T, which is used to request a copy of your tax forms or returns directly from the IRS
  • Recent bank statements or pay stubs
  • Proof of income from alimony or child support, pension or annuity income, disability insurance or workers compensation benefits, if applicable
  • Copies of government-issued photo ID
  • Utility bills

Once you’ve completed the application and submitted the necessary documents, your application is reviewed and the platform matches you with investors to fund the loan. Once the loan is approved, the funds are deposited into your bank account. The process can take anywhere from seven to 45 days.

Each P2P site has its own rules and approval criteria, including minimum credit score, so an application declined by one platform doesn’t necessarily mean that you won’t be approved by the others.

The Financial Industry Regulatory Agency (FINRA) reported that P2P lenders tend to be more forgiving than banks when it comes to short credit histories, but if you’re trying to get a P2P loan with less than stellar credit, don’t expect the lowest rates.

Lending Club states that applicants who qualify for the lowest rates have:

  • An excellent credit score
  • A low percentage of total outstanding debt compared with income
  • A long history of credit with significant successful credit lines

Lending Club

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Upstart looks for borrowers with:

  • A minimum FICO score of 620 (although they do accept borrowers with insufficient credit history to produce a FICO score)
  • No bankruptcies
  • No accounts currently in collections or delinquent
  • Fewer than six inquiries on their credit report in the last six months (other than inquiries for student loans, vehicle loans, or mortgages

Prosper’s minimum criteria include:

  • A minimum FICO score of 640
  • Debt-to-income ratio below 50%
  • No bankruptcies within the last 12 months
  • Fewer than seven credit inquiries within the last six months

While the approval process isn’t without its hurdles, peer-to-peer loans give borrowers another — sometimes less expensive — option for borrowing beyond credit cards and bank loans. Because P2P lenders facilitate borrowing without a bank intermediary, there is less overhead and none of the capital reserve requirements that drive up costs for traditional banks. As a result, the cost of originating and funding loans is lower, providing more competitive rates to borrowers and a faster approval process.

Plus, some borrowers just like the idea of borrowing outside of the traditional banking industry. Cain says although the process is online, P2P lending is not simply a different way of dealing with a faceless lender. “We do have a robust customer service team that is available to help,” Cain said.

What if your loan isn’t funded?

If your loan application is denied, you will receive an adverse action notice that provides the specific reason for the denial.

Cain says it’s hard to say exactly why a loan application would be denied, as every person’s credit profile is unique. However, some common reasons credit applications may be denied even though the borrower has a good credit score include:

  • Problems verifying employment. A stable job and stable income indicate that you’ll be able to pay your lender back. If the lender has trouble verifying your employment history, they may decline your application.
  • Not enough income. If you don’t have enough income in relation to your existing debt obligations to pay back the loan, most lenders will deny credit.
  • Bankruptcy. Lenders are often wary of approving a loan after you’ve declared bankruptcy. A bankruptcy may remain on your credit report for up to seven or 10 years, depending on the type filed.
  • Credit card utilization. If you are using a large percentage of your available credit, you may be seen as a potential risk to lenders.

If your loan application is denied, check your credit report to make sure that there are no inaccuracies that are dragging down your credit score. You can check your credit report with each of the three credit reporting agencies for free once a year at annualcreditreport.com.

Also, review your loan application to ensure you filled it out completely and accurately. If you find any errors in your credit report or application, correct them and apply again. Otherwise, take a look at the adverse action notice and see what you can do to improve your situation.

While there are no quick fixes for a bad credit score, small steps can improve your score over time.

  • Reduce the amount you owe. Stop using credit cards and make a plan to pay down existing balances.
  • Pay your bills on time. Payment history accounts for as much as 35 percent of your FICO score, so set up payment reminders to avoid missed or delinquent payments.
  • Avoid closing unused cards. Part of your credit score depends on the average length of time you’ve been using credit, so closing old accounts can actually hurt your score.
  • Don’t open new accounts too rapidly. A large number of new accounts in a short time frame can make you look risky to lenders, so apply for and open new accounts only as needed.

Shopping around

Each platform has their own lending criteria, loan limits, fees, interest rates, and areas of operation. Take a look at the FAQs and other information on the provider’s website to get an overview of the types of loans they offer, and the rates and fees they charge.

Here are a few to get started:

Lending platform

Loan amount

Terms

Who it’s best for:

Upstart


$1,000-$50,000

3 and 5 years

Borrowers who may not have an
excellent FICO score (or any score
at all) but are good loan candidates
based on other factors such as
education and job history

Prosper


$2,000-$35,000

3 and 5 years

Borrowers interested in a personal
loan to consolidate credit card debt,
fund home improvements, vehicle
purchases or other life events,
or start, or expand a small business

Lending Club


$1,000-$40,000

3 and 5 years

Borrowers interested in a personal
loan for consolidating high-interest
debt, funding home improvements,
or paying for unexpected expenses

Funding Circle


$25,000-$500,000

6 months to 5 years

Borrowers looking for funding to start
or expand their business

Keep in mind that interest rates and other terms can change, so you should compare rates and other terms from a variety of lenders every time you need to borrow.

The P2P lending market is only a little over a decade old, thus P2P platforms have not had the long history of government oversight to which banks and credit unions have been subjected.

And there is reason to be cautious about getting involved in P2P lending. In 2016, the Department of the Treasury released a report, Opportunities and Challenges in Online Marketplace Lending, looking at the opportunities and risks of P2P lending. Their concerns included:

  • The use of data-driven algorithms for making credit decisions has the potential to violate fair lending laws and doesn’t allow applicants to check and correct the data being used.
  • Interest rates may be high. The report acknowledged that the majority of loans are made to borrowers with good credit scores, but some platforms offer loans to borrowers with poor credit (FICO scores as low as 580) at interest rates as high as 36 percent.
  • Borrowers using P2P lending to refinance federal student loans lose the protections available to federal student loan borrowers, including income-driven repayment plans, loan forgiveness, and deferral or forbearance while the borrower returns to school or faces economic hardship or disability.
  • Many borrowers use P2P loans to fund small business development, but it may be difficult to enforce consumer protection laws and regulations, contract law, or fair lending laws with P2P platforms since these platforms are not subject to the same oversight as traditional banks.
  • While many marketplace lenders clearly disclose loan rates and terms, not all platforms are as transparent. The report acknowledged a need for standardized disclosures.
  • Most P2P platforms service loans only until a loan becomes delinquent, at which point collection is outsourced to a collection agency. Not all platforms have plans in place to work with borrowers who are experiencing financial distress or plans to continue servicing loans if the company goes out of business.

However, they are required to follow the same state and federal laws as other lenders. If you encounter any problems with a P2P lender, you should submit a complaint to the Consumer Financial Protection Bureau.

The CFPB began accepting complains about P2P lenders in March of 2016. We reviewed the complaints database in December of 2017 and counted more than 300 complaints about some of the largest P2P lenders. Consumers who submit complaints assign categories themselves and can opt not to have their complaint narrative published, so it’s difficult to parse the top complaints, but they include:

  • Having difficulty getting the loan
  • Problems making payments
  • Problems with the payoff process
  • Being charged interest or fees that aren’t expected
  • Inaccurate information reported to the credit bureau

These problems aren’t unique to P2P lenders, given that borrowers from traditional banks can face similar frustrations. Still, it’s important to know what other borrowers have experienced if you’re thinking of pursuing a P2P loan.

Lending Club and Prosper are the most popular platforms, but experts expect the industry to grow, so it’s worth expanding any comparison shopping beyond the biggest players. Just do your research before providing your personal information.

  • Search for the lender online. Is the platform mentioned in roundups of the best P2P platforms from reputable financial websites? Do your search results include consumer complaints?
  • Check the platform’s rating with the Better Business Bureau.
  • Make sure the platform takes steps to protect your personal data. They should have security and privacy certification from a company like TRUSTe or Symantec.

Alternatives to a P2P loan

It makes sense for anyone interested in a P2P loan to also compare alternatives before committing to a loan:

  • Community banks
  • Credit unions
  • Friends and family

Peer-to-peer lending can be a less expensive alternative to high-interest credit cards and easier to get than a bank loan. But, like all borrowing decisions, it needs to be carefully considered for your individual financial circumstances. The bottom line is that P2P is another option, and more options and increased competition are always good for borrowers.

Janet Berry-Johnson
Janet Berry-Johnson |

Janet Berry-Johnson is a writer at MagnifyMoney. You can email Janet here

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Personal Loans

No Credit? Personal Loans and Other 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.

no credit loans

What is credit and why does it matter?

A good credit score can have a positive impact on your life in many areas, such as purchasing a house, car or even getting a lease on a new apartment. Your credit score is a number that helps businesses make decisions about whether or not to grant you a loan — and, if so, how much risk they are taking on in the process.

Your score can also impact the terms of the loan, such as how long you have to pay back the balance and what interest rate you’ll have to pay.

The standard FICO score, which is the most widely used among lenders, can range anywhere from 300 to 850. The higher that number, the higher the likelihood that you’ll get better terms. A higher score indicates to lenders that you’re perceived as less of a risk, so companies are more willing to give you more favorable terms for loans. If you’re considered a high risk to a lender, you may find it difficult to get loans and may find yourself stuck with the worst rates.

Experian breaks down score bands by score range well in this graphic:

A credit score of 700 or higher is usually considered a good credit score and a score 800 or above is considered excellent. People who have fair or poor credit may start to find it hard to get competitive rates on loans.

What if you have no credit or a thin credit file?

People who have thin credit files or no credit history at all might find it difficult to qualify for loans, credit cards or a mortgage, among other things. Because credit reports are used by lenders often to tell whether or not an individual is a responsible borrower, if that report is empty or nearly empty, it’s difficult for them to make a call one way or another.

That’s because without a credit history, lenders won’t be able to give you a credit score. Yes, there’s a big difference between your credit score and your credit report.

To think of it a different way, imagine that you’re a college student. Each of your exams is one part of your credit report and your credit score is based on how your perform on all of your exams so far. If it’s your first day on campus and you haven’t taken any exams yet, it would be very difficult for someone to determine whether you’re a good student or not.

“The problem is if a person hasn’t borrowed money, he or she can't get a credit score,” Jennifer Hemphill, AFC® says. “It’s hard because you’ll end up either getting denied outright or pay absorbent interest rates even if you can get a loan.”

The more often you use credit, the richer your credit report will be. The information recorded in your report includes the types of loans you have, how much you owe and whether or not you make timely payments. With that information at hand, lenders then can calculate your credit score and grant you access to loans.

The key measures lenders use to calculate your credit score are as follows:

  • Are you making on-time payments? (35% of your score)
  • How much credit debt are you using compared to the credit that’s available to you? (35% of your score)
  • How long you’ve been using credit (15% of your score)
  • How many different types of credit you have used (10% of your score)
  • How many times you apply for new credit (10% of your score)

If you’re more of a visual person, here’s how it breaks down in a chart, courtesy of MyFICO:

Jennifer suggests that to build up your credit, you need to understand factors that determine your credit score and make sure to follow them.

“Your payment history, number of loans, how many inquires you’ve had and the length of credit history all play a part in determining your credit score,” she says. “If you make sure you pay your loans on time and not take out too many loans, you’ll be able to get a good score much faster.”

Keep in mind that there are different credit rating bureau, meaning that your score could be different depending on the bureau lenders look at. This is because credit bureaus don’t necessary share information with each other. Furthermore, your lender is required to report accurate information to any one of the three major credit bureaus (Experian, Equifax, TransUnion) but they don’t need to report it to all three credit bureaus. If this happens, there may be a delay in the types of information shared which could affect your credit score.

Loan options for people with no credit score

If you have a thin credit file, don’t worry. Everyone starts from somewhere.

To start building a good credit history, you’ll need to apply for credit. There are lenders who are willing to approve loans for people with no credit, but your options will be more limited. Here are some options on how to get a loan with no credit:

Secured credit cards

A secured credit card requires a deposit upfront. Then, you’ll make monthly payments for a certain period of time. Those payments will be reported to a credit bureau and your score should improve so long as you make all your payments on time and keep your utilization low. Just be careful to pay the card off each month, because you don’t want to get stuck paying high interest fees on top of it. Some secured card lenders will upgrade you to a regular credit card after you’ve proven you can manage a secured card. This option is best for those who want a credit card and have exhausted all options for unsecured credit cards.

Student credit cards

Many lenders offer students credit cards despite their thin credit files in the hopes they’ll become lifelong customers. All you need to is to show you have some income to make the monthly minimum payments. However, you may only get a low credit limit and high interest rates. Check out our list of the best student credit cards here.

Retail credit cards

Retail cards are generally fairly easy to get approved for, because retailers know that the harder it is for people to apply for credit, the less money they stand to earn from credit card users. It’s no secret that retail credit cards often come with scarily high interest rates. So we’ll offer a word of caution: If you do apply and get approved, be sure you’re only using it a credit building tool. That means you’re spending only what you can afford to spend and you pay it off in full each month. The downside of retail cards is that you may not be able to use them anywhere except for the retailer itself, but you may find co-branded cards out there that have wider acceptance.

Joint credit cards

Those who want to build their credit scores could benefit from a joint credit card. For example, two spouses could apply for one card but both hold responsibility for payments. If the two people are responsible, great. But there’s a risk, too. It also means if one or both of you aren’t making on-time payments, both of your scores could suffer.

Becoming an authorized user on a credit card

If your partner or family member has good credit, you might want to be added on as an authorized user on their card to build up your credit. The primary cardholder holds liability for making on-time payments, while your score will benefit from their good behavior. However, the primary cardholder can remove you from the account at any time.

Personal loans for those with poor credit

Getting a personal loan is another way to build up your credit score. The following lenders works with those who are applying for loans with no credit:

  • OppLoans - This is an online lender who works with people who don’t have robust enough credit histories to have a credit score yet. Their online application process takes minutes and you can find out if you’re approved for a loan up to $5,000 without impacting your credit score. Keep in mind that their loans aren’t available in all states. Depending on location, their rates start at 36% with terms from 9 to 24 months.
  • Upstart - This lender will consider applicants who don’t have a score. You may be able to borrow from $1,000 to $50,000 with three or five year terms. Their APRs range from 9.56% to 29.99% as of Dec. 15, 2017. Most applicants are able to get funds after one business day once they accept their terms.

Before you apply for credit, you should request a free annual credit report from all three credit reporting agencies. Even though you may not have enough information to generate a credit score, you never know if there is an error in your credit report. Things like a lender reporting incorrect transactions, mixing up identities or someone trying to steal your identity could happen, so dispute any errors if you see any.

To get your free credit report, visit AnnualCreditReport.com or call 1-877-322-8228

Get prequalified. You should also check to see if a lender offers a pre-approval form, which only requires a soft credit pull and won’t harm your credit. A positive pre-approval doesn’t 100% guarantee you’ll ultimately be approved, you can at least take a calculated risk before you apply for credit full-stop, since that will trigger a hard pull on your credit report and could hurt your score.

If you’d rather get a personal loan than a credit card, here are more options to check out:

  • LendingTree. Lending Tree, which is the parent company of MagnifyMoney, partners with many different lenders. By filling out a short online form on the personal loan page, you may receive quotes from several lenders, including lenders who may be willing to work with people with poor credit or very little credit history. Pick and choose ones with better rates or terms.
  • LendingClub. This is a peer-to-peer marketplace lender. Borrow up to $40,000 and receive your money in as little as seven days. Fixed APRs range from 5.99% to 35.89%, however, if your poor credit you likely will be stuck with the highest rates. You can choose between a three or five year term with no prepayment penalties. LendingClub does charge an origination fee, however, which will be charged as a one-time fee of 1-6%. And since it’s charged when you receive your loan, it’s deducted from your loan balance, which means you’ll get the amount you applied for, less the origination fee.
  • Avant. Borrow from $2,000 to $35,000 with fixed APRs ranging from 9.95% – 35.99% and loan terms of 24 to 60 months. Not available for Colorado, Iowa, West Virginia, and Vermont residents.
  • Prosper - Prosper is similar to LendingClub and is also a peer to peer lender. Borrow anywhere from $2,000 to $35,000. Fixed APRs range from on 5.32% to 35.97% on 3 and 5 year terms.
  • Credit unions and local banks. Don’t forget to check credit unions to see what they could offer you. Theses institutions may have competitive rates and offer smaller loan amounts for its members. Loan officers may even more be willing to work with you on getting a loan compared to bigger companies.

How to build your credit score

Building your credit score doesn’t have to be hard. It will not be a quick process, but as long as you are consistent and exhibit all the signs of a trustworthy borrower, you’ll be able to build a good credit score.

Make payments on time. First and foremost, making payments on time will significantly impact your credit score. You want to show lenders that you can make at least the minimum payments every month. Any late payments will most likely show negatively on your report.

Keep your balances low. You should strive to pay as much of your balance off each month as possible. You can get away with making minimum payments, but you won’t help your utilization rate that way, and utilization rate is also a large component of your credit score, as we discussed in beginning of this post. The closer your balances are to your credit limit, the more negatively it’ll impact your score.

Don’t open too many new accounts in close succession. You’ll also want to consider how often you apply for credit. Every time you apply for a loan, you’ll get what’s called a hard inquiry on your report. One or two credit inquiries may not affect your score significantly, but if you apply for multiple loans or credit within a short period of time, your credit score may fall.

If you follow these steps consistently, over time you’ll be able to build your credit score.

Things to watch out for

Just because there are many products and services to help you build your credit, doesn’t mean they’re all equal. No check or instant approval credit loans such as payday, title or no check credit loans may seem like a good idea as they offer access to cash quickly. However, they often come at a steep price.

Payday loan companies have you write a check for however much you want to borrow in addition to a set fee. You’ll borrow that amount and hold onto the check until your loan’s due date which is usually your next payday. The problem is that they come with high rates and you could find it hard to pay back the loan. If this happens, you’ll pay more fees to extend the loan and pay even more in interest.

Title loans are often no better. Instead of using your paycheck as collateral, you put up your car’s title as collateral for a loan. The loan amount is usually the equivalent of your vehicle’s appraised value. The term is typically around 30 days and also come with high APRs. If you can’t pay back to loan, you’ll end up paying more fees or run the risk of having your car repossessed.

These options aren’t a good idea if you want to build a good credit score. All of these loan options are extremely expensive for borrowers and have severe consequences for delinquent payments. If you don’t have credit, you can use options that are much cheaper and with more favorable terms.

Sarah Li Cain
Sarah Li Cain |

Sarah Li Cain is a writer at MagnifyMoney. You can email Sarah Li here

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Best of, Life Events, Personal Loans

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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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, 4, 5, 6 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.

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*referral link

Marcus by Goldman Sachs®

Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA that offers no-fee, fixed-rate personal loans. Marcus offers unsecured loans up to $40,000 for terms ranging between 36 and 72 months. Their personal loans have fixed APR ranges of 6.99% to 23.99% APR.

One of the best perks of Marcus is that they offer payment deferment for those that have made on time payments for a full year. This allows someone to push back one of their payments for a full month without accruing additional interest or possibly harming their credit. Marcus also offers customers the ability to change their payment date to a date that is most convenient for them every month.

Marcus by Goldman Sachs® Personal Loan Fees

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

Getting Approved for a Personal Loan by Marcus by Goldman Sachs®

  • There is no strict credit score requirement, though, Marcus targets customers with “prime” credit, which is usually a score of 660 on the FICO scale
  • Missed payments or other negative marks on your credit report will greatly decrease your chances of being approved
  • Must have a valid U.S. bank account
  • Possess a Social Security or Individual Tax I.D. Number
  • Applicants must be over 18 (19 in Alabama and Nebraska, 21 in Mississippi and Puerto Rico)
  • Loans not offered in Maryland

Marcus by Goldman Sachs®

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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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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 5.21% to 11.67%. You can refinance $5,000 up to $100,000 on 3, 4, 5, 6 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 14.24%, 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 16.44%, 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 9.56% 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 35.99%. 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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Personal Loans, Reviews

CircleBack Lending Review: Borrowing Option for Good to Excellent Credit Scores

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.

CircleBack Lending Review

Updated November 03, 2017
UPDATE: CircleBack lending is no longer accepting new loan applications. If you would like to shop for a personal loan, consider these two options:

  • LendingClub: Its APR ranges from 5.99% - 35.89%. Its origination fee is 1% - 6%. You can borrow up to $40,000. LendingClub is not available in Iowa or West Virginia.Upstart*: Its APR range starts off at 9.56% APR and goes up to 29.99%. The origination fee varies from 3.655% to 8%. You can borrow from $1,000 up to $50,000.

Otherwise, you can read about the best personal loans here.

Below we keep the original text of our review:

CircleBack Lending is an Internet-based consumer-lending platform for both borrowers and investors. Its goal is to provide consumers with good to excellent credit with a quick way to borrow money.

Circleback personal loan The entire process of applying for a personal loan with CircleBack Lending* is done online. It aims to have a fast application and approval process, and next day funding is available when you submit all required documents by 10AM ET.

CircleBack Lending is positioned to be a better alternative for consumers with high interest credit card debt, but your debt doesn’t have to be linked to credit cards in order to receive a loan. It offers fixed rates as opposed to variable rates, so you don’t need to worry about the interest on your loan becoming unbearable.

Let’s take a look at what CircleBack Lending has to offer, and how it compares against other peer-to-peer lenders.

Personal Loan Details

CircleBack Lending offers consumers loans ranging from $3,001 - $35,000 and you can borrow for up to 60 months.

The APR ranges from 6.43% - 34.93%.

When you apply for a loan with CircleBack Lending, you receive a credit grade after its loan analysts have gone through your profile. This is so investors know the level of risk associated with your loan. Your APR will vary depending on this credit grade.

CircleBack Lending received an "A" transparency score from MagnifyMoney for allowing potential borrowers to see rates with a soft pull and disclosing fees.

Credit Grade

36 Month
Interest Rate

36 Month
APR

60 Month
Interest Rate

60 Month
APR

A - B

5.96% - 11.42%

6.63% - 12.82%

12.44% - 19.82%

12.88% - 20.78%

C - D

11.70% - 14.69%

13.82% - 17.60%

16.73% - 26.20%

18.14% - 28.29%

E - F

14.88% - 18.58%

18.54% - 22.00%

20.13% - 32.37%

22.60% - 35.18%

G - H

20.28% - 32.32%

24.06% - 36.00%

23.11% - 35.07%

25.65% - 36.00%

Pros to Borrowing from CircleBack Lending

If you have high interest credit card debt with a variable interest rate, CircleBack Lending may provide a better solution. You can apply to consolidate or refinance your existing debt, and you can often do so at a lower rate than you had before.

CircleBack Lending also claims it has a quick application and funding process, so if you need the funds within a week, you’ll be covered.

Cons to Borrowing from CircleBack Lending

The most obvious con is the APR cap. 36% is extremely high when compared to other peer-to-peer lenders. The starting APR of 12.88% for a 60 month loan is also very high – and that’s the APR for borrowers who receive the best credit grade.

Credit card debt often starts with a 15 percent APR and 12.88% isn’t too far off, and even though it’s a fixed rate, you might be able to get better rates from other lenders.

Qualifications for a Loan

CircleBack Lending requires that applicants be 18 years or older, and loans are only available to those in the following states: Alabama, Alaska, California, Connecticut, Delaware, District of Columbia, Florida, Georgia, Indiana, Kansas, Kentucky, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, or Virginia.

Additionally, since CircleBack Lending aims to provide loans to those with better credit scores, you should have, at minimum, a 660 FICO score. Research indicates CircleBack Lending has a rigorous underwriting process, so the better your credit report looks, the better your chances will be when it comes to getting approved.

Who Can Benefit the Most from a CircleBack Lending Loan?

If your interest rate on debt is much higher than 12.88%, and you have excellent credit, you stand to benefit the most from a personal loan with CircleBack Lending. Its interest rates are unfortunately not very competitive, so you need to make sure you’ll be able to get a low enough APR to make applying worthwhile.

Fees and Gotchas

CircleBack Lending’s fees are standard when compared with other peer-to-peer lenders.

Depending on the credit grade you’re given, your loan origination fee will be anywhere from 0.99% to 4.99%.

If your payment is rejected or fails for any reason, you’ll be charged a $15 fee. CircleBack Lending specifies this fee will be incurred each time a payment fails (other lenders limit this to once per billing cycle).

If you’re late making a payment, on the 16th late date, you’ll be charged $15 or 5.00% of your monthly payment amount – whichever is greater.

Paying by check? CircleBack Lending will charge you a $15 check processing fee.

Transparency Notes

CircleBack Lending has a minimalist website, especially compared to other personal loan providers. There isn’t much information on it at all. The company “About” page isn’t very helpful, there’s not much information on how the loan application works, and there’s little to nothing provided for investors interested in investing in its consumer loans. Its “Help” section is “coming soon,” and upon calling, no one was available to answer.

Shop Around for the Best Rates

With that said, it’s worth it to you as the borrower to shop around for the best rates. Applying with CircleBack Lending will not affect your credit – it’s a soft pull – so feel free to check other personal loan options including non-peer-to-peer lenders like SoFi*. See who can offer you the best rates. You shouldn’t feel obligated to take the first offer.

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*We’ll receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

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

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Top 6 Personal Loans & Student Loans for Career Development

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 & Student Loans

Updated November 03, 2017
A few years after graduating college you may find yourself in a weird spot. You don’t want to go back to school for another degree in the traditional sense, but you want to pursue certification in an area like coding or UX design to give your resume a boost. Or maybe you want to get formal training in an entirely new field through intensive boot camp programs.

Fortunately, there are options outside of “going back to school” that give us the opportunity to continue learning without committing to an entirely new degree. You can also find funding to help ease the burden of paying completely out-of-pocket for career development.

Check out a few of these loan options:

1. SoFi

Fixed rates starting from 5.49% APR

When considering loans for career development, SoFi should be a loan at the top of your list because of its customer service and loan perks. The application is completely online and once approved funds are wired to your account. It also doesn’t hurt your credit score to see if you’re pre-approved and your rate.

SoFi offers fixed and variable interest loans. You can borrow $5,000 to $100,000. Loan terms are 3 - 7 years. There are no origination fees or prepayment penalties.

One feature of a SoFi loan that makes it stand apart from other loans is the unemployment protection. If you lose your job, there are resources like career coaching to help you find another position. You can also get payments postponed temporarily during your job search.

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2. Earnest

Fixed rates starting from 5.25% APR

Earnest offers personal loans for multiple uses including career development. You can borrow from $2,000 to $50,000. Loan terms are 1, 2 and 3 years long with no hidden fees or prepayment penalties. Earnest does a hard pull to determine if you’re approved, so your credit score will be affected.

The loan application process is online as well and you’ll receive a response about your loan application within 2 to 3 business days. Earnest reviews many variables outside of just your credit score to qualify you for a loan. So, if your credit score is impacting the rate you get with other lenders, Earnest is worth checking out.

Earnest will take into account your savings, earning potential, education and your history of on-time payments to find you the best rate. Currently, this loan is not offered in Nevada, Idaho, Louisiana, Mississippi, Alabama, Kentucky, Iowa, Vermont, Montana, North Dakota or South Dakota. Although, plans are in motion to open up lending to these states.

3. Upstart

Rates starting from 9.56% APR

Upstart offers $1,000 to $50,000 in personal loans for courses or boot camps to further your career. Loan terms of 3 and 5 years are available. One negative of Upstart is it does have an origination fee of 3.655% to 8%. Similar to SoFi, Upstart does a soft pull of your credit report to determine if you’re pre-approved.

Upstart will accept borrowers with a credit score of 640 and above. If you have a limited credit history you may still be able to qualify. Similar to Earnest, Upstart reviews your credit score among other factors like your education, area of study and job history to determine if you're eligible for a loan.

Once approved for an Upstart loan, you can agree to terms and get your money within a few days.

4. LightStream

Fixed rates starting from 5.99% APR

LightStream has loans from $5,000 to $100,000. Loan terms range from 2 to 7 years. There are no fees or prepayment penalties, but it will be a hard pull on your credit report to see if you’re pre-approved. One positive of LightStream is it’s very clear with how it determines interest rates.

You’ll get the most competitive rates with excellent credit. Since the term “excellent” can be subjective, LightStream outlines what’s considered excellent credit based on a profile of past excellent borrowers. These borrowers tend to have:

  • 5 or more years of credit history
  • A mix of credit accounts like various credit cards, auto loans and mortgages
  • Excellent payment history with no delinquencies
  • Proven ability to save
  • Stable income

Now, one important thing to mention, you can’t use a LightStream loan for college or postsecondary education. If you want to take out this loan for career development, contact customer service to double check that whatever course you plan to take is eligible for the loan.

5. Wells Fargo

Variable rates starting from 4.49% APR

Wells Fargo has a unique opportunity for students pursuing career training or non-traditional school education. This could be a good option if you’re looking to further your career in the form of certificates and licensing from a university.

There are no application, origination or repayment fees. Wells Fargo offers variable and fixed interest options. Rates include somes discount. You can get a 0.25% discount if you have a previous Wells Fargo student loan or another qualifying account. There's another 0.25% discount if you set up automatic payment.

You can take out up to $20,000 depending on the type of training you’re getting and from what school you’re getting it from. No payment on the loan is required until 6 months after you leave school, but interest will accrue during any deferment.

Wells Fargo does allow cosigners and cosigner release. Cosigners can be removed from the loan after 24 consecutive, on-time payments are made and you meet other credit requirements.

6.Sallie Mae

Variable rates starting from 3.25% APR

Sallie Mae has a program relatively similar to the Wells Fargo career-training program. Sallie Mae will fund up to 100% of the cost to attend school for training.

Both fixed and variable rate loans are available. There are no prepayment penalty or disbursement fees. You can apply with a cosigner and your cosigner can be released after you make 12 on-time payments, pass a credit review and meet other criteria.

Prepayment begins 6 months after you’re finished with classes. One perk of the Sallie Mae loan is while taking classes you have the option to pay interest or you can pay a fixed $25 per month to reduce your repayment schedule in the future.

How to decide

The world we live in today is constantly evolving, so naturally our skills will have to evolve as we move forward in our careers. Before choosing a personal loan or student loan for career development, get a good sense of your end goal.

Do you want to simply learn a new skill or do you want to gain a new credential (i.e. certification) from a university for your resume? Deciding your end game will help you choose the loan product that’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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Personal Loans

5 Personal Loans for Fertility Treatments

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.

stephanie pregnant_lg

Updated November 03, 2017
The excitement of starting a family can turn into despair if you face difficulty getting pregnant. Thankfully treatments including medications and surgery can make parenthood a possibility for couples having trouble conceiving on their own. But, these treatments may not be covered by medical insurance.

In vitro fertilization or IVF is one procedure in particular that insurance may not cover. According to the American Society for Reproductive Medicine, a cycle of IVF can cost $12,400 on average. Because success with IVF may require more than one cycle, the entire process can get quite expensive.

Instead of paying for fertility treatments out-of-pocket, a low-interest personal loan may be a solution for financing medical care. Here are a few personal loans to consider:

SoFi – Fixed rates starting at 5.49% APR

SoFi offers personal loans from $5,000 to $100,000 to cover medical costs. Loan terms are 3 - 7 years. Both fixed and variable interest loans are available. A variable interest loan means your interest will fluctuate based on an index. SoFi does have a variable interest cap for personal loans. Generally, you should stick with a fixed-interest personal loan because your rate will stay the same throughout the entire term.

A variable interest loan is only worth considering if you can pay off the loan quickly. In this scenario, you take advantage of very low interest for a short time and then pay off the loan before interest changes. SoFi has no prepayment penalty, so you can do this without incurring a fee.

SoFi doesn’t charge for origination either. If you lose your job, SoFi has a unique borrower benefit as well. You may be able to pause payments until you find another position.

Earnest – Fixed rates starting at 5.25% APR

Earnest offers loans from $2,000 to $50,000. Loans have competitive interest and a streamlined online application process. Terms are 1, 2 and 3 years. There are no application or origination fees. If you pay off the loan early there are no pre-payment penalties either.

Earnest takes a look at your entire financial profile including your savings habits and earning potential to qualify you for a loan. Most approved Earnest applicants are employed or have an offer letter, have at least a month worth of expenses in savings and enough monthly income to support their regular expenses and loan payments. Earnest will do a hard pull of your credit report upon applying.

Lending Club – Fixed rates starting at 5.99% APR

Lending Club is a peer-to-peer lender that offers fixed-rate loans. You can borrow $1,000 to $40,000. Loan terms range from 2 to 5 years. Once approved for a Lending Club loan you get a credit rating and loan options to choose from. After accepting your loan terms, the loan appears in the marketplace where investors select loans to invest in.

Lending Club does charge an origination fee of 1% to 6%. How much you’ll pay for origination depends on the credit rating that Lending Club assigns you. The credit rating is determined using factors including your credit history and credit score. Lending Club has no prepayment penalties.

LightStream – Fixed rates starting at 5.99% APR (with auto pay)

You can borrow $5,000 to $100,000 from LightStream for family planning including fertility treatments and adoption. Loan terms are 2 to 7 years. To qualify for the lowest rates with LightStream you need to have at least 5 or more years of positive credit history, no delinquencies, a stable income and money in savings.

The LightStream loan is transparent with fees. There are no fees for origination or early payment of the loan. LightStream also has a “rate beat” program. If you get approved for a personal loan by another lender with a lower interest rate, LightStream will try to beat that rate. The competitor loan must meet certain requirements to qualify for the program. LightStream doesn’t offer pre-approvals at this time and will do a hard pull on your credit history at application.

Upstart – Starting at 9.56% APR

Upstart has personal loans from $1,000 to $50,000 that can cover various life expenses including medical bills. Loans are available for 3 and 5-year terms. Upstart takes into account more than your credit history to decide whether or not you qualify. Your education and job history will also be considered.

At a minimum, you need a 640 credit score to qualify for this loan. You must also have no more than 6 inquiries on your report in the last 6 months. Like Lending Club, Upstart charges an origination fee. You’ll have to pay 3.655% to 8% for loan processing. Depending upon your risk profile, interest rates can be as high as 29.99% APR.

Final Word

While all of these loans have competitive interest, the loans without an origination fee are ones you may want to consider first because of the savings. Remember, you need to have an excellent credit score and a positive credit history to qualify for the very lowest interest rates with any of these companies.

Upstart and Lending Club could be good fall back options if you have trouble getting approved elsewhere. Both may qualify you with a credit score below 650.

Each lender on this list allows you to prequalify for a loan without a hard pull on your credit history, except LightStream and Earnest. Take this into consideration while shopping for loans. A recent hard pull could negatively impact your chances of getting approved by other lenders, however, shopping around within a 30-day window will ultimately count as one hard pull and impact your credit score as such.

Taylor Gordon
Taylor Gordon |

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

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Personal Loans, Reviews

Springleaf Personal Loan Review

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 loan_lg

Updated October 26, 2017
OneMain Financial was recently acquired by Springleaf, and offers personal loans to borrowers via its branch network. (Note: Springleaf has changed its name to OneMain).

Springleaf has been in business for over 90 years and has lent over $10 billion in personal loans to more than 3.5 million people in that time. Its typically known for doing business with borrowers who have less than ideal credit, so if you’ve been turned away by other lenders, you may want to consider giving Springleaf a chance.

However, before taking a loan withSpringleaf, you should shop around. In particular, we recommend shopping for a loan with online lending platform Avant. Checking your Loan Options will not affect your credit score, and you can get the funds as soon as the next business day. (More details are available later in the post).

Personal Loan Details

You can borrow $1,500 up to $25,000 with a personal loan from Springleaf. In a note at the bottom of its website, Springleaf says loans over $25,000 are possible, but only offered for highly qualified individuals. In addition, some states may have higher limits (for example, it can lend up to $25,000 in North Carolina).

Before we go on, we want to note there are barely any actual details of the loan on its website aside from the amounts it lends. When calling the loan office, the representative was unable to give a general range of terms and APRs because they vary from borrower to borrower as they depend on the loan amount and state you reside in. To get specific details, we suggest calling your local branch.

We’ve found APRs range from 25.10% to 36% with terms of up to 60 months. Generally, the rate adjusts around $5,000. For loans under $5,000, you could be looking at an APR of closer to 30%, whereas loans over $5,000 are closer to the mid-20% range. The APR largely depends on the size of the loan requested and your credit history.

Secured and unsecured loans are offered. After you submit your application, Springleaf will evaluate the one for which one you qualify. Secured loans (with collateral) have better rates because there’s less risk involved for Springleaf. Higher loan amounts are likely to be secured along with loans that are being used to buy an asset.

Springleaf is currently only available in 41 states. It doesn’t lend in Alaska, Arkansas, Connecticut, Hawaii, Massachusetts, Minnesota, Nebraska, New York, Rhode Island, Virginia, Vermont, or DC.

Application Process and Documents Needed

The application for a personal loan can be done online, over the phone, or at a branch location. The application is easy to fill out – you’ll be asked how much you’re requesting and what the purpose of the loan is.

Then you need to enter in personal information, such as your date of birth, current address, and contact information. You’ll also be required to fill in your employment status and financial information.

If you fill out the application over the phone or at a branch, it should only take about five minutes. A hard inquiry on your credit will be used when applying for the loan. You can also apply with a cosigner if needed.

Once your application is processed and approved, a representative from a branch will follow up with you. All communication will be with that loan officer.

In general, Springleaf recommends having the following things on hand when applying for a loan:

  • Driver’s license/Photo ID
  • Social Security Card (possibly)
  • Past pay stubs to verify income, or tax return if self-employed
  • Proof of residence (a driver’s license will work; if your address is different than what’s on your license, a utility bill can be provided)

Springleaf may also contact your HR department to check that you’re an active employee.

New customers will be required to go to a local branch office to sign for the paperwork.

Who Qualifies for a Personal Loan With Springleaf?

The representative we spoke with said Springleaf tends to focus more on credit history than credit score, but we’ve found you should have a minimum score of 550 for the best chances of approval.

Springleaf will also check your income and budget to make sure you can afford the additional monthly payment.

Who Benefits the Most From a Personal Loan With Springleaf?

Those with lower credit scores will benefit the most from a personal loan with Springleaf. Since new customers must go to a branch to sign for the paperwork, existing customers may have an easier time applying for a loan.

The loan can be used for a number of reasons, including consolidating debt, home improvement, major purchases (such as furniture or appliances), and emergencies.

The Fine Print

There is an origination fee associated with this loan, though the exact amount depends on the size of your loan. The range is around $25 to $40, with $40 being on loans around $4,000 - $5,000.

There’s no prepayment penalty associated with the loan.

A late fee of $15 will apply if you payment is more than 10 days past due. For loans over $15,000, the late fee will likely be higher.

Difficult to Get in Contact With

As we mentioned before, Springleaf’s website offers next to no information on its personal loan. All this information was obtained through speaking with a loan representative. It doesn’t have the terms it offers, APRs, or fees listed on the site.

There’s a “click to call” link on the application page, but that only tells you to fill in your phone number so a representative can get back to you about the question you have.

It does have a contact form you can fill out on the “contact us” page. We sent a message using the “Website Feedback” choice and a response was given within a few hours. Unfortunately, because our phone number is listed in a state it doesn’t service, help wasn’t offered. A phone number to call was given, but the number is typically used to apply for a loan, not to get more concrete details.

Most communication will go through your local branch office, as they can answer more specific questions. Unfortunately, upon trying to call a local branch several times, there was no answer. We tried another branch nearby and got through on the first call.

Pros and Cons of a Personal Loan With Springleaf

Con: The interest rates are obviously extremely high, but given that Springleaf is oriented toward lending to individuals with lower credit, it’s not surprising.

Pro: Springleaf focuses more on credit history than credit score, and seems to take other factors, like income and budget, into consideration.

Con: Springleaf’s transparency is incredibly low. You can typically find much more information about a loan on a lender’s website. We weren’t fans of spending 20+ minutes trying to contact someone from the company for details.

Con: New customers will be required to go to a branch location to finalize the loan paperwork. The process isn’t entirely online.

 

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Alternative Personal Loan Solutions

Springleaf isn’t the only lender that can help borrowers with low credit.

Avant can help those with a minimum score of 580. The APR range is 9.95% to 35.99% through the Avant platform. The maximum amount it will loan is $35,000 and you may be able to get those funds as soon as the next business day. There is no prepayment fee. It is available in all states except Colorado, Iowa, West Virginia, and Vermont.

Avant

APPLY NOW Secured

on Avant’s secure website

Avant branded credit products are issued by WebBank, member FDIC.

*Referral link

Peerform offers personal loans to borrowers with a minimum credit score of 600. Peerform’s APR range is 5.99% to 29.99%, its maximum loan size is $25,000, it offers terms up to 3 years, and it has a 1% to 5% origination fee.

Peerform

Do yourself a favor and don’t be afraid to shop around with these lenders. You want to get the best rates and terms offered, and shopping around the only way to do that. All credit inquiries that occur within 30 days are counted as one single inquiry, so your credit won’t be penalized for it. Explore your options and don’t get discouraged if lenders don’t approve you. Try and work on improving your credit score as much as possible over the next few months so you can be eligible for better approvals, and be sure to stay away from payday loans.

*We receive a referral fee if you click on offers with this symbol. This does not impact our rankings or recommendations. You can learn more about how our site is financed here.

Erin Millard
Erin Millard |

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

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Best of, Personal Loans

Top 5 Best Personal Loans for Moving Expenses

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.

Top 5 Best Personal Loans

When moving expenses are not reimbursed by an employer, the cost of relocating can swiftly empty your bank account. Take it from someone who has just moved.

At the end of last year, my husband and I made the transition from Maryland to Atlanta. I work from home, so switching locations was easy for me. My husband was fortunate to get a job transfer, but expenses were not reimbursed. Even though we had enough time before the move to save up for out-of-pocket costs, we still felt the pinch.

Personal loans are an option if you need some extra cash to move, especially if you have to pick up and move quickly. Here are a few of the best loans for moving expenses:

Earnest
Earnest

Starting from 5.25% fixed APR

Earnest loans have low interest and a quick online loan application process. You can borrow from $2,000 up to $50,000 for 1, 2 or 3 year terms. To qualify for an Earnest loan, you must be employed or at least have an offer letter. You'll also need to prove your income can support your regular monthly expenses and the loan payment.

Earnest is light on fees; there's no origination fees or penalties for prepayment. Once you're approved for the loan and you accept the loan terms, the cash can be in your account as soon as the next day. You can set your monthly payment or pay biweekly to pay less interest. The downside is that Earnest doesn’t so a soft pull to let you know you’re pre-approved or what you’re rate would be before applying.

SoFi
SoFi

Starting from 5.21% APR Variable

SoFi is known for refinancing student loans, but it’s also a provider of personal loans. There are no origination or prepayment fees at SoFi. SoFi offers fixed and variable interest rate personal loans. Variable interest ranges from start at 5.21% APR. All rates include a discount for using autopay. You can borrow from $5,000 to $100,000. Loan terms are 3 - 7 years.

You can check if you’re pre-approved and your rate without harming your credit score because SoFi does a soft pull.

SoFi loans have unemployment protection, which is a plus. If you get laid off from your job while repaying a loan, your payments may be postponed for a short time while you look for another one.

LightStream
LightStream

Starting from 5.99% fixed APR

LightStream offers personal loans for home improvement, family events, recreation and more. Moving expenses fall into the LightStream loan “other” category. You can borrow from $5,000 to $100,000 for 2 to 7 years.

This personal loan doesn't have origination or prepayment fees. The application process is online. Once you fill out the online application, a representative from LightStream will contact you. After you accept loan terms, funds will be transferred to your account. Like Earnest, there is a hard pull when you apply.

Prosper
Prosper

Starting from 5.99% fixed APR

Prosper is a peer-to-peer lender that offers personal loans from $2,000 to $35,000. In order to qualify for a Prosper loan, your FICO score must be 640 or above. Your debt-to-income ratio needs to also be less than 50%.

Loan terms are 3 and 5 years. One negative of the Prosper loan compared to the others on this list so far is the origination fee. Prosper charges 1% to 5% to process your loan. But, there's no prepayment penalty fees. Once your application is approved, you may get funds within a week. You can check if you’re pre-approved without harming your credit score.

Lending Club
LendingClub

Rates from 5.99% to 35.89% fixed APR

Another peer-to-peer lender offering loans for moving expenses is LendingClub (not available in Iowa and West Virginia). You can borrow from $1,000 to $40,000 for up to 5 years. Similar to Prosper, LendingClub personal loans have an origination fee of 1% to 6%.

The LendingClub loan process is simple. You apply to check rates for free, then choose a loan offer and sign off on the terms. The loan is transferred to your account and fixed payments automatically withdraw until it's repaid. Like Prosper and SoFi, LendingClub also offers the ability to see if you’re pre-approved without harming your credit score.

Advice on how to reduce costs

There are a few ways to cut back on your moving costs even if you decide to take out a personal loan. One thing I learned during my last move is making tedious preparations well in advance can save big time. Several weeks prior to moving, I called around to compare a bunch of different ways to move long-distance.

Having enough time to search for deals, hunt for coupons and weigh each moving option helped me arrive at the most affordable one. We also saved on boxes by gathering free ones over time from supermarkets and retail stores where our friends work.

If you’re in need of a personal loan for moving, shop around with each of the lenders above to search for a competitive rate. Then, do your homework to find the most affordable way to move and tap into your resources for moving supplies to cut costs.

Taylor Gordon
Taylor Gordon |

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

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