This personal loans review will help decide if a peer lending or personal loan is right for you even on bad credit
Bank lending has yet to rebound for personal loans and small business owners since the financial crisis. New regulations and fees have kept traditional lenders from increasing loans and has given rise to a whole new industry for personal loans and peer lending.
PersonalLoans.com is not a lender itself but a website that connects lenders and borrowers for better rates. Having worked with the peer lending sites quite a bit, I thought I would review the personal loans website and see how it stacks up for short-term loans.
Personal Loans, also called signature loans because you don’t need to put up any collateral, are available for up to $35,000 and generally on one-year to seven-year repayment plans. Since you don’t put down collateral like your house or car for these loans, the interest rates tend to be higher but can be easier to get than other loans.
Most borrowers can get approved in less than a day and can see money in their bank account within a week. You can take out a loan for nearly any reason but the most popular loan type is for debt consolidation, paying off high interest credit card loans.
I’ve used PersonalLoans.com twice before for loans and it is the most highly recommended personal loan site on the blog. The lender helped me recover my credit score in 2009 and is one of the few online lenders for bad credit borrowers with reasonable rates.
Pros of PersonalLoans for Online Loans
- One of the few legit sites for bad credit borrowers to consolidate debt
- Ability to shop your loan around to get better deals on interest rates
- No prepayment penalty or hidden fees
- Rates are higher compared to good credit sites like SoFi and Lending Club
- Customers receive offers for other credit score services after the loan and need to opt-out of marketing
Personal Loans Review: Personal Loans Requirements
The personal loan process on personalloans.com is pretty quick compared to other online loan sites. The three-step process is actually only two steps, entering your information and getting a loan. Loan requirements on the personal loans website are generally the same as most online loan sites, if not a little easier.
You need to be at least 18 years old and a permanent resident or citizen. Income requirements are different for some types of loans but you can get a loan on as little as $2,000 a month. Unlike some personal loan sites, lenders in the personal loans network will accept self-employed borrowers as well as those on social security and traditional employment.
You’ll need a bank account in which your personal loan will be deposited and for direct withdrawal of your monthly payments. Credit requirements for personalloans.com are a little less strict than other sites with a minimum credit score of about 580 FICO as long as you do not have an active bankruptcy or too many bad marks on your credit score.
Click to check your rate on a personal loan up to $35,000 – Won't affect your credit score.
The personal loans website’s huge lending network enables it to offer different loan types in just about every state. Only North Dakota and Maine are left out with no loans available while borrowers have all three loan types available in most states.
PersonalLoans.com Review: Getting Approved for a Personal Loan
The three-step process on the Personal Loans website is really only two steps. The first step of entering your loan basics takes all of about five seconds.
After this first step, you’ll be asked contact information and verification to protect your identity. Besides basic information like address, you’ll input your employment and identity information like driver’s license number and social security number. After this information, the site will generally do what’s called a ‘soft pull’ of your credit report to check your credit score. This doesn’t affect your credit score but is used to determine your loan rate and which lenders are interested in funding your loan.
I have heard borrowers say that they receive a couple of product offers like credit protection besides the loan offers they receive but the site won’t spam you with a bunch of emails.
The most important thing you need to remember with personal loans, especially for bad credit borrowers is to understand interest rates and your repayment on different loans. Personalloans.com adds an extra step here because you’ll need to compare different loan offers from different lenders to make sure you get the best rate and terms.
You’ll be able to compare monthly payments and total cost of your personal loan before you select a lender from the personalloans.com network. The site offers a table to help understand the effect of higher rates on payments and cost. Most personal loans are repaid monthly but you can set up to pay twice a month and save a lot on interest each year.
It doesn’t cost anything to find a loan on personalloans.com but rates can get pretty high for poor credit borrowers. Personal loans shouldn’t be used as a recurring way to get quick cash. The best use of personal loans is for debt consolidation and getting your finances in order to gain from lower rates on other loans. Make sure you check out a prior post on avoiding the 3 biggest borrower risks in peer loans.
Personal loans sources loans in three different types and across a nationwide lender network. You won’t have to choose just one of the loan types but will be offered different options if you qualify.
Consider these points when deciding which personal loan is best
- The shortest loan term you can afford will save you money in interest.
- Interest rates will be lower for shorter-term and lower-amount loans.
- Find the loan amount and term that will allow you to easily make payments and then pay extra each month to pay off the loan faster
Personal Loans Review: Peer to Peer Lending Loans
One of the lower-rate options in the personalloans.com network is peer to peer loans. These are loans connected directly to investors instead of going through a bank or loan company. By cutting out the lending middleman, peer loans are generally cheaper than other lending options.
You can borrow between $4,000 to $35,000 for a peer lending loan through personalloans.com and will generally have between three and five years to repay. The peer lenders in the network will accept self-employed borrowers as well as those with traditional 9-to-5 jobs. Loan fees for peer lending are between 1% and 5% of your loan amount and will be deducted before you receive the money.
While rates on peer lending tend to be lower, even for bad credit borrowers, the downside is higher credit requirements for loans. You’ll need a FICO credit score of about 600 or higher to get approved for one of the peer lending sites in the personalloans.com network.
This credit score is still lower than that required to borrow on other p2p loan sites like Lending Club and SoFi. You still might want to apply for a loan on other sites to see if you get accepted but PersonalLoans is generally the best for bad credit borrowers.
Personalloans.com Review: Personal Installment Loans
Personal loans on the personalloans.com network are easier to get than peer lending loans though rates might be higher for bad credit borrowers. These loans are basically the same as peer lending loans except your loan is funded by a financial company rather than directly by an investor.
Personal loans are available for borrowers with income of at least $2,000 a month and a 580 FICO credit score. While only employed and self-employed borrowers qualify for peer loans, people on social security benefits can qualify on the personalloans.com network.
State requirements differ quite a bit so your loan amount and interest rate will depend on where you live. Personal loans are available in most states from $1,000 to $35,000 and rates generally start at 8% for quality score borrowers.
Personal loans for bad credit borrowers can range up to 30% but there are no prepayment penalties so you can manage the effect of higher rates by making extra payments and paying off your loan early.
The interest rate on these loans is the reason I highly recommend giving yourself three months or more to improve your credit score if possible. If you don’t need the money right now, you can easily increase your credit score 100 points in that time and lower your rate by 5% or more.
That’s going to mean saving thousands in interest and being able to pay off your loan early.
Personalloans.com Review: Bank Personal Loans
Bank loans offered on the personalloans.com network are an interesting mix of online and traditional loans. The website can match you with a local bank in your area that will approve your loan. The site lists the minimum income at $3,000 a month and a minimum 580 FICO credit score but a lot of the details will depend on local banks.
I've seen data that suggests borrowers with lower FICO scores can get approved, especially on repeat loans, making the network one of a few top picks for bad credit personal loans.
The process for a bank loan on personalloans.com will start online as with the other loan types. You’ll fill out your loan request and personal information before seeing different lenders and options that can help you.
If you select a local bank for your loan, you will be put in contact with the bank either on the phone or in-person and will finish your personal loan with the bank. Since you’ve got the in-person option, you might be able to get the money faster through an account at the bank.
Personalloans.com Review: Frequent Questions about Personal Loans
Will applying for a personal loan affect my credit score?
Personalloans.com will first do a soft-check of your credit report to confirm your basic information and so lenders can offer their rates and terms. This first check doesn’t hurt your credit score. If you agree to a specific personal loan, the lender will do a hard-check of your credit to get your score and more detailed information.
This second check will show up on your credit report for six months. It shouldn’t be a problem unless you continually ask for loans and get many of these hard-checks on your report.
Too many requests makes it look like you are scrambling for money. The requests come off your credit report and your credit score will improve as long as you make on-time payments on your loan.
How much money can I get and what will the rate be on my personal loan?
Loans are available between $1,000 and $35,000 depending on your state and regulations. Your rate will depend on your credit score as well as the loan terms you request. Smaller loans that will be paid off more quickly may offer lower rates so only borrow as much as you need and try to set your payoff date as soon as possible.
How do I get my money from the personal loan?
Your personal loan will be deposited directly into your checking account after you verify your employment and payment information. Your loan can be funded as soon as the next business day in some cases.
How do I repay my personal loan?
All the lenders in the personalloans.com network are able to receive payment directly from your checking account. You set up the repayment and the amount comes out automatically every month. This is the easiest method since you don’t have to worry about late payments. You may also be able to pay by check with some lenders.
Most payments are made on a monthly basis but you can select twice-a-month payments as well. Your payment will be half of what it would be each month but you will end up saving money on interest each year. This happens because you end up paying 26 half payments instead of just 12 monthly payments.
What happens if I miss a payment or can’t repay my personal loan?
Missing a payment on a personal loan is just like any other type of debt or credit. Your missed payment will be reported on your credit report and will hurt your credit score. Most personal loan lenders will give you a grace period of a week or two so a little late doesn’t affect your credit score.
It’s important to contact the lender if you think you are going to miss a payment. These lenders want to make sure you’re able to repay the loan and will usually work with you.
Personalloans.com Review: The Good, the Bad and the Ugly in Personal Loans
Customer reviews are generally good for personalloans.com but there are a few complaints on the product offers received and the rates. Even on the good reviews of the personal loan site, it should still be stressed that a short-term loan isn’t a long-term solution to your finances. Learning how to set financial goals and a budget will help you control your financial destination and will give you more options besides higher-rate personal loans.
- Strong reputation for customer service and an honest disclosure policy for rates
- Approval process in minutes and funding in less than 5 days
- Lenders compete for your personal loan, helping you to get the best rates and terms
- Rates as high as 30% for bad credit borrowers can mean you pay just as much in interest as for the loan
- Some customers have complained that they receive credit reporting offers in addition to the personal loan offers – don't sign up for services or products you don't need
Click through to PersonalLoans.com if you're ready to start your loan process and get your money in less than a week.
I like the personal loan network and its ability to shop your loan around to different peer lending and personal loan lenders for the best rate. Interest rates tend to be higher than some p2p loan providers but credit score requirements are lower, which means better chances of getting a loan on bad credit.