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Personal Loans

Peerform Personal Loan Review

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Peerform
APR

5.99%
To
29.99%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 5.00%

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on Peerform’s secure website

Even with a credit score of 600, you still might be able to secure a loan through Peerform. ... Read More

Peerform personal loan details
 

Fees and penalties

  • Terms: 36 or 60 months.
  • APR range: Loan APRs range from 5.99% to 29.99%.
  • Loan amounts: You can borrow anywhere from $4,000 to $25,000.
  • Time to funding: Up to 14 days
  • Origination fee: 1.00% - 5.00%, depending on the “grade” Peerform gives your application. The fee is subtracted from the loan total. Example: If you request a loan of $2,000 and are charged a 5% origination fee, you’ll get $1,900.
  • Prepayment fee: None
  • Late payment fee: After 15 days, you’ll be charged 5% of the monthly installment or $15, whichever is greater.
  • Other fees: If you pay by check, Peerform charges a $15 fee per payment. A returned payment also incurs a fee of up to $15, depending on state laws.

Many people like the idea of bypassing the traditional banks in favor of a P2P lender like Peerform. Borrowers use the money for things like debt consolidation, unexpected home or personal expenses or to fund small businesses. But these loans are not for everyone — and a Peerform loan can’t be used for certain items.

For example, Peerform prohibits borrowers from using personal loans to pay college tuition or other postsecondary expenses, or for “illegal activity.”

Eligibility requirements

Even though Peerform lends to borrowers with poor credit, applicants will still need to show that their debt-to-income ratio is below 40% and proof of having (or having had) at least one revolving account such as a credit card. Your credit history must not contain any current delinquencies or a recent bankruptcy, court judgments, tax liens or non-medical-based collections opened in the past 12 months.

Applicants must be at least 18 years old (19 if you’re a resident of Nebraska or Alabama), and a U.S. citizen or permanent resident. You’ll also need a Social Security number, a valid email address and a bank account.

Applying for a personal loan from Peerform

The online-only process is straightforward: Register at Peerform with your name, contact information and salary. To verify your identity, you’ll need to upload or e-mail some form of photo identification: driver’s license, passport or state or federal ID. In some cases, additional paperwork – Social Security card, utility bills, credit cards or bank statements – may be requested.

You also have to show proof of employment by uploading or e-mailing two pay stubs. Those who are self-employed will need to show a recent tax return plus two recent bank statements.

The Loan Analyzer then determines whether you’re eligible for a loan, and at which rates and terms. Once you select the best loan match, potential investors have up to 14 days to review it.

Peerform cannot guarantee that your loan will be completely funded by the end of the two-week period. If investors provide less than 60% but at least $4,000 of your requested amount within that time frame, you can decline this partially-funded loan. However, if at least $4,000 and more than 60% of your request is approved, then the loan is considered funded.

Once the request is funded and the loan completed with the lender, Cross River Bank, the money will arrive in your bank account via direct deposit.

Pros and cons of a Peerform personal loan

Pros:

Cons:

  • The 600 minimum credit score means borrowers with less-than-stellar credit may still qualify for a loan.
  • Peerform offers some flexibility regarding repayment. If cash flow is a problem, you can delay a payment for up to 14 days without paying a late fee.
  • You can opt to accept or decline a partially-funded loan.
  • There’s no prepayment penalty.
  • Those with lower Peerform Loan Analyzer scores face higher APRs up to 29.99% and origination fees up to 5%.
  • The only available term is 36 or 60.
  • No joint applications or cosigners are allowed.
  • It could take up to two weeks to find out whether you get the money, which is a problem if you need the cash right away.

Who’s the best fit for a Peerform personal loan?

Those with lower credit scores who have been rejected elsewhere may still qualify at Peerform. Those with good credit scores can qualify for decent interest rates, with an APR as low as 5.99%.

Borrowers who are able to pay off their loans relatively quickly should find the three-year term manageable, but the cash-strapped may prefer competitors’ longer five-year terms.

Alternative personal loan options

Peerform is just one of several peer-to-peer lenders, including those who offer loans to subprime borrowers. Here are a few alternatives to consider:

LendingClub

APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

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on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More

LendingClub offers loans between $1,000 and $40,000 with 36 or 60 month terms. Like Peerform, it accepts applicants with credit scores as low as 600. The APR range is 6.95% to 35.89%. LendingClub is not available in West Virginia or Iowa.

OneMain Financial

APR

16.05%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

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on LendingTree’s secure website

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If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.... Read More


All loans subject to OneMain’s normal credit policies. Loan approval and actual loan terms depend on your ability to meet OneMain’s standard credit criteria (including credit history, income and debts) and the availability of collateral. Collateral requirements would include a first lien on a motor vehicle that meets our value requirements, titled in your name with valid insurance. Collateral offered must meet our criteria. The lowest annual percentage rate (APR) shown represents APRs for top 10% of loans closed. Maximum APR is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.Residents in the following states are subject to the following loan size restrictions: Alabama residents: $2,100 minimum loan amount. California residents: $3,000 minimum loan amount. Florida residents: Unless you are a present customer, $8,000 maximum loan amount for unsecured loans. Georgia residents: Unless you are a present customer, $3,100 minimum loan amount. Iowa residents: Unless you are a present customer, $8,500 maximum loan amount for unsecured loans. Maine residents: Unless you are a present customer, $7,000 maximum loan amount for unsecured loans. Mississippi residents: Unless you are a present customer, $7,500 maximum loan amount for unsecured loans. North Carolina residents: Unless you are a present customer, $7,500 maximum loan amount for unsecured loans. New York residents: Unless you are a present customer, $20,000 maximum loan amount for unsecured loans. Ohio residents: $2,000 minimum loan amount. Texas residents: Unless you are a present customer, $8,000 maximum loan amount for unsecured loans. Virginia residents: $2,600 minimum loan amount. West Virginia residents: Unless you are a present customer, $7,500 maximum loan amount for unsecured loans. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.

This P2P lender is unique in that it sets no minimum credit score for applicants. However, it has the highest minimum APR among the lenders mentioned here, starting at 16.05% and going up to 35.99%. You can borrow between $1,500 and $30,000 for two, three, four or five years. OneMain Financial does not operate in Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island or Vermont.

Prosper

APR

6.95%
To
35.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

2.41% - 5.00%

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on LendingTree’s secure website

Advertiser Disclosure

Prosper is a peer-to-peer lending platform that offers a quick and convenient way to get personal loans with fixed and low interest rates. ... Read More


For example, a three-year $10,000 loan with a Prosper Rating of AA would have an interest rate of 5.31% and a 2.41% origination fee for an annual percentage rate (APR) of 6.95% APR. You would receive $9,759 and make 36 scheduled monthly payments of $301.10. A five-year $10,000 loan with a Prosper Rating of A would have an interest rate of 8.39% and a 5.00% origination fee with a 10.59% APR. You would receive $9,500 and make 60 scheduled monthly payments of $204.64. Origination fees vary between 2.41%-5%. APRs through Prosper range from 6.95% (AA) to 35.99% (HR) for first-time borrowers, with the lowest rates for the most creditworthy borrowers. Eligibility for loans up to $40,000 depends on the information provided by the applicant in the application form. Eligibility is not guaranteed, and requires that a sufficient number of investors commit funds to your account and that you meet credit and other conditions. Refer to Borrower Registration Agreement for details and all terms and conditions. All loans made by WebBank, member FDIC.

Prosper offers loans from $2,000 to $40,000 for 36 or 60 months. Its current APR ranges from 6.95% to 35.99%. Of the three alternative subprime lenders mentioned in this article, it requires the highest minimum credit score: 640. Prosper does not operate in Alabama, Arizona, Arkansas, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Montana, Nebraska, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Vermont and West Virginia.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Donna Freedman
Donna Freedman |

Donna Freedman is a writer at MagnifyMoney. You can email Donna here

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Personal Loans

Top 5 Personal Loan Myths of 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

personal loans
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When it comes to personal loans, many Americans are more likely to turn to credit cards as a way to pay emergency bills, enjoy a dream vacation, or pay for items they can’t afford with cash.

According to Experian, existing personal loan debt was at $273 billion in the second quarter of 2018, while existing credit card debt was at $782 billion in the same period.

But it also shows personal loans with a greater year-to-year change in debt growth than credit cards. Whether personal loans are a viable option for expenses depends, apparently, on who you ask.

Awareness seems to be a key factor. When people are in the dark about financial solutions, they will draw their own conclusions, often leading to false perceptions.

What are some of the myths about personal loans?

5 things people say about personal loans

Myths about personal loans have developed over two centuries, making them hard to debunk.

Fortunately, the internet makes it easier than ever to not just raise awareness about personal loans and to clarify misconceptions, but to find the lowest interest rates and apply for loans.

Personal loans have a difficult and lengthy application process

Before the internet, borrowers had to apply for a personal loan by visiting their bank. During the days of the Morris Plan banks, they often evaluated borrowers based on character and income. This may have meant dressing in your Sunday best and arriving for a meeting with a loan officer with stacks of paperwork, pay stubs and tax returns.

Today, applying for a personal loan is easier than applying for a home equity loan or a mortgage.

You can apply easily online in just a few clicks. Many lenders will ask you to provide your Social Security number, your monthly expenses — including any outstanding debt such as mortgages, car loans, student loans and credit card debt — and your income.

Keep in mind that applying for a personal loan may require a hard credit inquiry and could lower your credit score. If you can, try to pre-qualify for a loan before you apply.

You won’t qualify for a personal loan if you don’t have excellent credit

This common misconception couldn’t be further from the truth. Personal loans are available for borrowers with a FICO Score as low as 500, but you won’t get the best rates with a rock-bottom credit score.

Most lenders look for borrowers with a credit score of 670 or higher. But a score of 800 or more will net you the best terms and interest rates.

Personal loans have lower interest rates than credit cards

Unlike the other myths explored, this one has some truth to it. It all depends on your creditworthiness.

Borrowers with a credit score of 720 or higher get personal loans at an average APR of 7.09%, according to LendingTree data, which is lower than the current 14.73% average APR for credit cards. (Disclosure: MagnifyMoney is owned by LendingTree.)

But if your credit is between 660 and 679, the average APR for a personal loan jumps to 16.72%.

It might be smarter to open a credit card with a 0% introductory APR for balance transfers and pay down as much debt as you can during that introductory period. With on-time payments, your credit score will rise and you can continuing using the same process until your high-interest debt is paid off.

Personal loans have high interest rates

“Personal loans have high interest rates” and “personal loans have lower interest rates than credit cards” might seem to be contradictory misconceptions.

In fact, they show just how much confusion there is about personal loans. Some people perceive the rates to be too high, while others assume a personal loan will offer a lower interest rate than their existing credit card debt.

There is just not enough awareness about personal loans being a good option for many people.

So what’s the truth?

If you have an excellent credit score, you could qualify for a personal loan with single-digit interest rates, which is lower than most credit cards.

Personal loans are also a better option than predatory payday loans, which can have an APR of almost 400%.

But if you own a home, a secured loan such as a home equity loan or home equity line of credit will almost certainly deliver a lower interest rate than an unsecured personal loan.

Personal loans just aren’t right for many borrowers

Many people don’t think of themselves as a good candidate for a personal loan. Maybe they feel their credit isn’t good enough or they don’t make enough money to quality.

Homeowners often consider home equity loans or HELOCs before personal loans. And, of course, the 70 million Americans carrying credit card debt month to month may not have thought about a personal loan.

But you could be a good candidate for a personal loan if you have excellent credit and need cash to consolidate credit card debt, pay medical bills or make a large purchase.

With an easy online application process, personal loans are increasingly becoming a smart choice for many borrowers.

What are your personal loan options?

In spite of the myths surrounding them, personal loans continue to grow in popularity.

In the second quarter of 2018, personal loans showed the greatest year-over-year growth than any other type of loan, according to Experian. Personal loan debt increased by 11.4%.

Borrowers looking for cash to pay off revolving credit cards or remodel their home may want to consider a personal loan. If you’re considering a personal loan, check your credit reports from all three credit bureaus and repair any errors to be sure your credit is in tip-top shape so you can qualify for a lower interest rate.

If your score isn’t where you’d like it to be, take time to pay down existing debt to improve your credit utilization ratio and raise your credit score. Avoid opening or closing accounts before applying for a personal loan since these actions could reduce your score.

As your credit score is increasing, use the MagnifyMoney personal loan marketplace to find a loan with the lowest rates and best terms for your situation. Always remember to do your research, consider all your options and make sure your finances are in order before applying for a personal loan.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dawn Allcot
Dawn Allcot |

Dawn Allcot is a writer at MagnifyMoney. You can email Dawn here

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Loan Origination Fees: Should I Be Paying Them?

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girl with a cup of coffee with a money bag symbol
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If you’ve applied for a personal loan or mortgage, chances are you probably came across something called an origination fee. If you’re wondering what it’s for and whether you have to pay it, here’s what you need to know.

Understanding origination fees

An origination fee is a common charge that is added to a personal loan, student loan or mortgage. It is charged by the lender and can also be referred to as an application, processing or underwriting fee. Its purpose is to cover the hard costs of preparing documents, processing and underwriting your loan, and any third party fees that might be incurred along the way, said Ashley Luethje, a York, Neb.-based sales manager at Waterstone Mortgage.

“These fees are typically a percentage of the total amount you’re borrowing,” Luethje said. “Generally, a mortgage origination fee is around one percent, but for consumer and commercial loans, the fee can be greater and is at the discretion of the lender.”

How an origination fee can come into play

If you’re deciding between lenders, one criteria you might want to take into account is the difference in their origination fees. There are some key points to consider, depending on the type of loan you’re applying for.

Personal loan

As personal loans are typically unsecured and not backed by any collateral, you may find the highest origination fees in this category. Because these types of loans carry more risk for lenders, they may charge you anywhere between 1% to 6% of the total amount you are borrowing. Those higher fees also offset the lower amount of interest lenders like banks and credit unions will receive during the life of a personal loan. These loans tend to be extended for a shorter term and in smaller amounts than other kind of loans.

If you’re not getting charged an origination fee with your personal loan, be aware that the lender may make up for it some other way, such as charging higher interest rates, said Jacob Dayan, the Chicago, Ill.-based CEO and co-founder of Community Tax and Finance Pal.

“It’s important to note that having a good credit history will yield you a much lower origination fee,” Dayan said. “Those fees are negotiable for larger loans, but will commonly require you to put up something, such as accepting a higher Annual Percentage Rate (APR) on your loan.”

Mortgage

Mortgage origination fees — also called mortgage points — can vary drastically as they are determined by the lender, said Jason Larkins, a Scarborough, Maine-based branch manager at United Fidelity Funding. These fees are charged to cover the labor involved in the processing, underwriting and funding of a mortgage, as well as third party fees incurred in tasks such as verifying your employment.

Many lenders, such as banks, credit unions and brokerages, charge a flat origination fee. This means the fee is not based on the amount you borrow. Others could charge a 0.5% to 1% origination fee; the VA home loan program sets a cap at 1%. “However, if a borrower is paying a 1% origination fee, they are likely paying too much and can shop for a better deal,” Larkins said.

At the beginning of the mortgage application process, lenders must disclose the exact origination fee being charged in an official Loan Estimate form. Lenders may not increase the stated fee except under special circumstances, such as if you decrease your down payment or change your type of loan. However, you could negotiate it downwards depending on your credit score, and the size and duration of your requested loan.

As long as you meet certain criteria outlined in IRS Publication 530, your mortgage origination fees may also be tax deductible.

Student loans

Origination fees for federal student loans are set by the government and may vary depending on whether you have a direct subsidized, direct unsubsidized or direct plus-type loan. Those fees could range from 1.062% to 4.264%  and are deducted from the loan amount — meaning you get a smaller loan in the end but will still pay back the full amount. For example, if you were to take out a $10,000 loan with a 4% origination fee, you would only receive $9,600 but would have to pay back the entire $10,000.

The only federal student loans that didn’t charge an origination fee were the Perkins Loans for undergraduate and graduate students in financial need, but this program recently ended. While most student loans provided by private lenders such as credit unions and banks might not come with origination fees, they could cost you more in the long run by charging higher interest rates. Private student loans also don’t come with the federal protections that are standard with federal loans.

Keep in mind that loans with lower interest rates but higher fees can cost more than loans with a higher interest rate and no fees. An easy way to calculate whether your lender is giving you a good deal is to remember that 3% to 4% in fees is equivalent to a 1% higher interest rate.

Is my origination fee too high?

Origination fees are not required, so it’s at the lender’s discretion to waive or negotiate the fee, said Kris Alban, the San Diego-based executive vice president of iGrad.

“It’s always smart to ask for a discount, especially if you have a high credit score and it’s a large loan,” Alban said. “When negotiating, the lender may agree to lower or waive the origination fees if you’ll pay a higher interest rate — meaning they will still make a profit, and you can pay the fees over the length of the loan rather than up front.”

To get the best big picture outlook of whether you’re getting a good deal on your loan, make sure you’re not just comparing the origination fees but also factoring in the interest rate. For example:

  • A $10,000 loan at a 4.99% APR for five years with a 3% origination fee will cost you $11,620 over the life of the loan.
  • The same loan at 5.65% APR with a 1.5% origination fee will cost you $11,652 over the life of the loan.

“Pay attention to both the interest rate and APR,” Alban said. “If they are different, the lender is most likely factoring additional fees into the APR; any origination fee over 4% of the total loan amount is excessive.”

The bottom line

Origination fees are charged by lenders to cover the costs of processing your loan, whether you’re looking for a mortgage, personal loan or student loan. Even though lenders are subject to regulations, be cautious of anything that sounds too good to be true and remember that the absence of origination fees can translate into higher interest rates. “Take the time to read the fine print and completely understand the terms of the loan,” Luethje said.

While you should exercise your ability to price origination fees with different lenders to get you the best deal possible, remember there is no one-size-fits-all scenario. “Make the choice that best fits your needs. If an upfront origination fee hinders your ability to receive a loan but a higher interest rate is a better option, then that might be the best scenario for you as a consumer,” Luethje said.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Barbara Balfour
Barbara Balfour |

Barbara Balfour is a writer at MagnifyMoney. You can email Barbara here

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