Vouch Review: Returning Personal Loans to Trust-Based Lending

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Updated on Tuesday, October 24, 2017

personal loan_lg

Updated October 24, 2017
UPDATE: Vouch has ceased operations, and is no longer a loan provider.

Vouch* is another alternative lender for personal loans, though it has a very unique twist as you might be able to tell from the name: friends and family are able to “vouch” for you – in terms of your financial responsibility and trustworthiness – and in turn, your interest rate will decrease. Vouch is about being able to leverage your network to get a great loan.

This is very different from the other lenders we’ve reviewed so far, because Vouch is pioneering the “trust-based lending” model in today’s market place.

Vouch is also not a peer-to-peer lender; the money that the company loans comes directly from them.

While Vouch does have requirements for their loans, having the support of your friends and family is going to make a difference here. Vouch is attempting to go back to the days when lending was actually personal and based on trust.

How Does Vouch Work?

Essentially, you’re asking friends and family to put in a good word for you to help you get the best loan term possible.

vouch email

It’s important to note that when you ask a contact to vouch for you, no personal information is given. Vouch is clear on what information is shared in its privacy policy, and you can look it over to see examples of the messages they send.

A simple note is sent to those you reach out to, stating that you’re asking them to vouch for you for a loan.

Those that want to vouch for you will be given 3-5 questions to answer, and all they need to do is submit their answers. They’re then notified when you accept Vouch’s loan offer, but amounts and terms aren’t disclosed.

Those that vouch for you can also pledge money toward your loan, in case you’re unable to make payments. This is not necessary for them to do, but they can choose to vouch a dollar amount starting from $25. If you default on the loan, they’ll be required to pay the amount they pledge.

This is a creative way for Vouch to make loans more affordable, as they’re distributing the risk to those in your network.

What Do Vouch Loans Look Like?

Vouch is currently offering between $500 – $7,500 installment loans with interest rates between starting at 10.68%.  Remember, when your network vouches for you, your interest rate improves. Vouch showcases an example of this on their homepage.

Vouch states that most of their loans are paid off within 1-3 years, which is consistent with other alternative lenders.

The really neat thing is your interest rate isn’t set in stone, so it’s possible you’ll end up paying less as more people vouch for you.

Requirements for a Vouch Loan

In order to obtain a loan with Vouch, you must meet these requirements:

  • Must be 18 years or older
  • Be a legal U.S. resident
  • Have a verifiable bank account
  • Have a FICO score of 600 or greater
  • Must be current on existing accounts and not in bankruptcy or foreclosure proceedings

It’s also recommended that you have a strong support network. If you’re uncomfortable asking people for help, then you won’t be able to get the most out of Vouch.

Vouch states on its website that they’re mainly looking to give loans to those that can afford to take them on. However, Vouch has recently exited their beta testing stage, so these requirements might be flexible as they figure out what works and what doesn’t. It never hurts to try!

Vouch’s Application Process

It’s easy to get started. At the top of their website, you’re prompted to enter in your phone number to receive a security code to enter. By entering this security code, you’re agreeing to Vouch’s privacy policy.

vouch app (1)Going through this process took me less than 5 minutes! The security code was promptly sent to my phone, and I filled out the sections below.

Vouch asks for personal information such as your name, address, date of birth, amount you pay for housing, and your job situation.

After that, Vouch takes 24-48 hours to get back to you with a loan offer. In the meantime, you’ll receive a Welcome email from them, telling you what to expect.

At no point did I have to enter my social security number, and being the transparent company they are, Vouch specifically states that agreeing and submitting your information will not affect your credit.

The Fine Print: Any Fees?

Vouch isn’t a fan of hidden fees, so there are no application fees, annual fees, orprepayment fees.

However, they do have an origination fee of 1%-5% of your loan amount, and their late fee is 5% of your payment amount with a minimum of $15.

Who Would Benefit the Most from a Loan with Vouch?

Those with big support networks will benefit the most from a loan with Vouch, simply because the terms of your loan is dependent upon how many people will Vouch for you.

If you’d rather stay private about financial matters, then Vouch wouldn’t be the right company to get lending from. There are other alternative personal loan lenders offering lower interest rates to start with, with no credit requirements.

As it stands right now, the maximum amount you can borrow from Vouch is $7,500, which isn’t large when compared with other lenders, so this loan is ideal for those that are looking to fund smaller pursuits.

What Can You Use the Money For?

Vouch does ask you what you plan on using the money for, and a few of the options to choose from are:

  • Debt consolidation
  • Moving
  • Wedding
  • Financing smaller purchases

Vouch can also be a good idea if you’re looking to supplement the savings you already have. For example, if you have $10,000 saved for your wedding, but need another $3,000, then you can get the funds from Vouch.

An Interesting Loan Solution, If You Have A Strong Network

Vouch is an interesting concept in the personal loan space – no other company is taking this kind of approach. Peer-to-peer lending isn’t the same, as investors often don’t have personal connections with borrowers.

With Vouch, you can enlist the help of family and friends, as you might be inclined to do regardless. It’s also a great way for your network to show support, and you can pass along the favor by vouching for others.

Because Vouch doesn’t require a hard credit inquiry, you have nothing to lose by applying with them and seeing what terms they can offer you. You aren’t committed to taking a loan with them by applying, and can continue to shop around if the terms aren’t good for you.

Get regular money-saving updates by following us on Twitter @Magnify_Money and on Facebook.

*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.  

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.

Do you have a question?