Backed Personal Loans Review: Everything You Need to Know About This Unique Lender

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Shopping around for a personal loan is important when you want to get the best rate possible. Luckily, applying for a loan online makes it easy to quickly compare personal loan lenders.

Backed personal loans take a new approach to lending. The lender allows you to add “Backers” to your loan so that you can potentially get a lower interest rate.

A Backer isn’t a traditional cosigner on the loan. But if a Backed loan is at risk of defaulting, the Backer is notified about its status. Afterward, there’s a 15-day grace period where a Backer can help keep the loan out of default, avoid late fees, and prevent a hit to the borrower’s credit score.

This 2018 review will walk you through Backed personal loans to help you decide if they’re the right option for you.

Backed review: Backed personal loans

Backed personal loans are targeted at young borrowers and their parents, although there are no age or education requirements. The lender appeals to parents who want to help their children develop financial independence after college.

Instead of paying living expenses, Backed suggests parents should support their child by helping them consider a Backed loan. That way, their child can develop credit while getting the money they need.

Personal loan terms

Backed provides loans between $3,000 and $25,000 to borrowers with a FICO score of 660 or higher. Borrowers with a lower credit score might still qualify for a loan if they have an eligible Backer.

Backed doesn’t provide loans in every state, but Backers can live in any state. Primary borrowers must reside in Arizona, Arkansas, Florida, New Jersey, New York, or West Virginia.

Backed offers repayment periods of one, two, and three years.

Rates and fees

This lender advertises APRs between 2.90% and 15.99%, as of May 18, 2018. Be sure to double-check the current rates on the Backed website. The rate you’re quoted is based on your credit score, information on your application, and your Backer.

Backed doesn’t assess a fee for early payment, but it does charge an origination fee. When you apply, you’re graded based on your application materials. You’ll receive a letter grade ranging from E to AAA, and your classification affects your interest and origination fees.

The highest origination fees, for E-ranked borrowers, are between 1.6% and 2% of the loan. For AAA borrowers, the origination fees are between 0.8% and 1.25%. You might be able to reduce your origination fee by providing Backed with more information and linking to your Facebook or LinkedIn.

Backed also charges other fees based on your situation. If you choose to pay by check instead of electronically, it charges a $10 processing fee per check. It also charges a $15 fee for bounced payments and a $20 late fee if you pay after your 15-day grace period.

If you’re graded at a D or an E when you apply, you’ll need a Backer to secure your loan. For borrowers with a score of D, you’ll need a Backer graded at a B or higher. For E-grade borrowers, you’ll need a backer with a grade of A or higher.

How can you use your Backed personal loan?

Backed doesn’t specify how you can use the funds from your loan. But personal loans are often used for:

Before taking on any debt, it’s wise to develop a repayment plan. Our personal loan calculator can help you plan ahead to create a realistic budget.

Financial and credit requirements

Backed loans require a FICO score of 660 or higher. If your score is below that, you could still qualify with a Backer.

When you apply, the lender will do a hard credit check. Backed also asks for copies of your last three pay stubs. If you’re self-employed, you can provide your current tax return and two bank statements.

How to apply for a Backed personal loan

You can apply for a Backed loan online. Previous applicants have been asked to provide the following:

  • A copy of your photo ID

  • Access to certain online accounts to verify the information you’ve provided

  • Income verification, such as pay stubs

  • A bill to verify your address

  • Bank and email address verification

This is mostly standard information. However, you might want to verify during your application process what online accounts of yours the lender will want access to, and how the information will help.

Should you apply for a Backed personal loan?

It’s important to understand the pros and cons of a Backed personal loan.

For example, using Backers could get you a lower interest rate. And the online application process for both you and your Backer makes applying straightforward.

However, watch out for the origination fee, which varies depending on the rating you’re given when you apply. There’s also no direct line to call Backed customer service if you need help during the process. To contact customer service, you need to fill out a form on the website.

Backed offers an interesting premise: personal loans with a different kind of cosigner. This could possibly help you qualify for a better rate if you have bad credit. But be sure to thoroughly research lenders before committing to a loan.

Student Loan Hero has independently collected the above information related to Backed personal loans. Backed has neither provided nor reviewed the information shared in this article.

Interested in a personal loan?

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

RATES (APR)loan amount
5.99% – 17.88%1 $5,000 to $100,000
5.69% – 35.99% $1,000 to $50,000
6.98% – 35.89%* $1,000 to $50,000
99.00% – 199.00%2 $500 to $4,000
5.99% – 24.99%3 $5,000 to $35,000
5.99% – 29.99%4 $7,500 to $40,000
compare rates on Lendingtree now
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.99% APR to 17.88% APR (with AutoPay). Variable rates from 6.49% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of November 4, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.49% APR assumes current 1-month LIBOR rate of 1.81% plus 3.08% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  5. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
2 Includes AutoPay discount. Important Disclosures for Opploans.

Opploans Disclosures

Direct Deposit required for payroll.

Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.

  1. To qualify, a borrower must (i) be a U.S. citizen or permanent resident; (ii) reside in a state where OppLoans operates; (iii) have direct deposit; (iv) meet income requirements; (v) be 18 years of age (19 in Alabama); and, (vi) meet verification standards.
  2. NV Residents: The use of high-interest loans services should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

  3. OppLoans performs no credit checks through the three major credit bureaus Experian, Equifax, or TransUnion. Applicants’ credit scores are provided by Clarity Services, Inc., a credit reporting agency.

  4. Based on customer service ratings on Google and Facebook. Testimonials reflect the individual’s opinion and may not be illustrative of all individual experiences with OppLoans. Check loan reviews.

  5.  

    Rates and terms vary by state.

3 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.
4 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.
* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

Published in Loans, Personal Finance, Review

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