Allows to borrow up to $100,000
Pros
- Simple and easy to use comparison platform
- Partners only with trusted lenders
- 40 years of experience
- Offers a variety of personal loans
Cons
- It is a comparison tool and not a direct lender
- Does not offer live chat option
Personal Finance – Bankrate
Going through a prequalification process for a loan isn’t the most enjoyable thing in the world. You need to provide the lender with several documents such as your pay stub to prove your financial capacity. And still, getting your application accepted isn’t guaranteed. Prequalification is just one of the steps in the application for lenders to determine your trustworthiness. Unsecured loans without collateral would require lenders to assess your credit history and whether you are high risk.
Nowadays, it’s a lot easier to get through the prequalification process thanks to technology. You can look around for loans and within minutes determine whether you will be accepted and what kind of terms you’ll receive. Bankrate, a leading personal finance site, helps borrowers look for loans without affecting their credit score.
How Does It Work?
Bankrate is a free site. There’s no need to create an account to view the resources but you are free to do so. Having an account will give you access to video resources and a collection of premium products and tools. If you want to prequalify for a loan through Bankrate, you’ll also need to create an account.
When you go to the Personal Loans page, you’ll see the rates for different personal loans that Bankrate updates every month. Bankrate considers the lender’s terms, interest rates, and other features. This page also contains information for unsecured personal loans.
The menu on the left side of the page is where you can enter your desired loan amount, your credit score, annual income, zip code, and the purpose of the loan. Once you enter the data, loan offers will be available on the right. The “See Offer” button will take you to the lender’s terms and rates and allow you to apply for a loan.
But don’t click on the loan offer yet. You can also prequalify by clicking Get Started on top of the list of loan providers. You’ll be taken to a questionnaire that takes less than two minutes to complete. You need to provide the loan amount, the reason for applying for a loan, credit score, employment status, annual income, home address, zip code, whether you own or rent, monthly house payments, name, and email address. The soft credit check will not affect your credit score at all, plus it’s free.
When you prequalify for a loan, it’s easier to apply and get offers. Although it doesn’t guarantee a loan, you will get an estimate of the loan amount you can qualify for and the terms and rates lenders are likely to offer you. After answering the short questionnaire, you’ll be asked to create an account to maintain your application progress. You need a phone number, a password, your date of birth, Social Security Number, a soft credit pull as well as accept the terms and conditions.
You will get a list of lending partners that meet your criteria with details such as loan amount, repayment terms, and APR. These are all prequalified offers. If you click the Next button corresponding to an offer, you will be taken to the lender’s website where you can complete your application. Depending on the lender, you may be asked to provide additional information such as a source of income and citizenship status. You might also be asked to verify your identity, sign online documents, and create an account on the lender’s website. If the lender approves your loan application, you can receive the funds on the next working day.
This process allows you to apply for a loan faster versus going to each individual lender and getting an offer. You get the preapproved offers in a single place to compare the best terms and rates. But if you have already done your research, you’ve looked around multiple loan providers, and you have a lender in mind, then it’s faster for you to just apply through the lender’s website. Bankrate will provide your information to their lenders but the lender might ask for more information to proceed with the application.
Are there fees for using Bankrate?
Bankrate offers services for free. They earn a profit when their visitors click on a loan from their site, get approved for the loan, and accept the offer. Just like other loans, there might be fees associated with the loans that Bankrate will refer to. Reach out to the lender and read the terms and conditions of the preapproved loan offer you’re eyeing. Fees come in the form of application fees, prepayment fees, origination fees, late fees, and interest rates. There might also be a minimum loan amount for some loans.
Lower credit scores are more likely to get hit with higher fees. Looking for a loan provider involves looking at the fees and penalties they charge. You can avoid late fees by setting up monthly auto-pay.
Personal Loan Features on Bankrate
There are several features on Bankrate’s website that relate to personal loans. The majority are pretty much self-explanatory and aim to provide borrowers with the resources when getting a personal loan.
Credit Rating for Interest Rates
The credit score is one of the heavier factors lenders consider when deciding on interest rates. They may set a minimum credit score requirement which means borrowers with bad credit would deal with higher personal loan rates. The most common type of credit rating used is FICO. You want to look over your score and history before you apply for a loan and see if you can make any improvements.
Bankrate will show borrowers the interest rate they might get offered based on their credit score. From January 31, 2022, the average personal loan rate is 10.28%, according to Bankrate.
| Credit | CREDIT SCORE | AVERAGE INTEREST RATE |
| Excellent credit | 720-850 | 10.3%-12.5% |
| Good credit | 690-719 | 13.5%-15.5% |
| Average credit | 630-689 | 17.8%-19.9% |
| Bad credit | 300-629 | 28.5%-32% |
Factors for Comparison
1. Loan Term – how much time do you have to pay back the amount you borrowed
2. Loan Amount – how much the loan provider will give you
3. APR – Fees and interest rates shown as a percentage. The best rates start at 3% and can go up to 36%.
4. Suitability – different lenders fit different purposes and types of borrowers. Some lenders are best in general and then there are also those that provide the best banking experience in-person.
Who Can Benefit the Most from Bankrate?
Comparison shoppers will find Bankrate’s features something they can get the most use of. But anyone who wants to take out a loan should be a comparison shopper. The website is free and it only takes a few minutes to get prequalified for a loan. There really is no excuse to not compare multiple offers.
In one glance you’ll get the loan terms, interest rates, and the minimum loan amount offered. Bankrate is easy to use and is a great starting point if you have no idea which lenders suit you.
Who Should Refrain From Using Bankrate?
If you have a low or bad credit score, it will be difficult for you to get good offers for personal loans. Personal loans are unsecured so there’s no collateral that the lender can go after if you default on your payments. Without collateral, lenders will use credit risk to decide if they will approve your loan. Borrowers who have records for late payments are considered high risk.
