Know someone with excellent credit? This lender lets you recruit them as a “backer” for better rates on your loan.
Backed, a relative newcomer to the world of online lending, simplifies the application process and offers financing to those who might not qualify with traditional lenders. And if you have someone to back you on your loan — mom, dad or a close friend — it improves your chances of getting a lower APR.
We review your personal loan options with this non-traditional lender to help you make an informed borrowing decision.
|Product Name||Backed personal loans|
|Min Loan Amount||$3,000|
|Max. Loan Amount||$25,000|
|Min APR||From 2.9%|
|Minimum Loan Term||1 year|
|Maximum Loan Term||3 years|
- Must be 18 years or older
- A US citizen or permanent resident
- Have a valid bank account
- Personal credit score 660+ or your backer must have a credit score 720+
- Annual income of $18,000+ or your backer has a minimum annual income of $50,000
- Must not have declared bankruptcy in the last seven years
- Must reside in New York, New Jersey, Arkansas, West Virginia, Florida or Arizona
What makes Backed personal loans unique?
Backed aims to provide personal loans to those with little or no credit. Its mission is to get you the best rate possible and set you up for success by being honest and fair about your lending options. They look at more than just your credit score — considering your education and employment history.
But what really sets Backed apart from other lenders is that they let you add a “backer” — someone with a strong credit history to back your loan — possibly improving your APR by 41%. Having a backer not only lowers your APR, but it helps you stay on track with your payments and can build your credit history.
What is a “backer”?
Backed doesn’t use cosigners — it uses backers. A backer is someone willing to “back” your loan by lending you their creditworthiness. A backer could be anyone you know with a strong personal credit score who is willing to pay your loan if you’re unable to make payments.
How is a backer different than a cosigner?
Cosigners and backers are similar in that by signing on a loan, they promise to pay back the loan if the borrower does not. Typically cosigners are notified once the borrower is 30 days past due, and both the borrower and the cosigner’s credit is impacted. Backed personal loans notifies backers within the 15-day grace period if a borrower misses a payment — without damaging anyone’s credit.
How do personal loans from Backed work?
Backed offers unsecured personal loans of up to $25,000 to residents of New York, New Jersey, Arkansas, West Virginia, Florida and Arizona.
To qualify for a loan without a backer, you’ll need a personal credit score of at least 660 and a minimum annual income of $18,000.
Loans with a backer require your backer to have a credit score of at least 720 with an annual income of $50,000 or more — but your credit score and income can be lower.
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What are the benefits of a Backed personal loan?
- Competitive rates. Rates starting at just 2.9%, compared to the 5–6% starting APR common with other lenders.
- Convenient application process. Applying for a loan with Backed is easy thanks to the straightforward online application.
- Quick funding turnaround. Receive your funds in as little as two business days.
- Startup friendly. Backed offers career investment loans for startup businesses, a good alternative to traditional business loans with strict revenue requirements.
What to watch out for
Backed has several attractive perks, but this online lender isn’t without its pitfalls:
- Restricted availability. Backed currently only lends to residents of New York, New Jersey, Arkansas, West Virginia, Florida and Arizona. If you don’t live in one of those states, you’ll have to look elsewhere for a personal loan.
- Limited customer support. Customer support with Backed is limited to email correspondence. There’s no customer service phone number available.
- Origination fee. Backed charges a one-time loan processing fee of up to 2% of your loan, ultimately leaving you with less money upon funding.
Am I eligible?
To be eligible for a personal loan with Backed, you must meet the following criteria:
- You are a US citizen or permanent resident with a valid visa.
- You are at least 18 years old.
- You have a valid bank account.
- You reside in New York, New Jersey, Arkansas, West Virginia, Florida or Arizona.
- You have a credit score of at least 660 or your backer has a credit score of at least 720.
- You have a minimum annual income of $18,000 or your backer has a minimum annual income of $50,000.
- You have not declared bankruptcy in the last seven years.
How do I apply?
- To find out if you prequalify for a loan with Backed, go to its website, indicate the term and loan amount you’d like to receive and click Apply Now.
- Choose your loan type. Click Next.
- If you’re eligible for a loan, Backed provides you with a quote detailing the loan terms you qualify for. Keep in mind that the initial offered rate is subject to change if you decide to add a backer to your application. At this point, you’ll provide supporting documentation to verify your personal and financial information.
- Finally, review your loan offer from Backed. Should you accept, the funds are deposited into your account within two business days.
I got the Backed personal loan. Now what?
- Don’t miss a payment. Know when your payments are due and make sure you don’t miss a payment.
- Keep your backer informed. If you included a backer in your loan agreement, make sure they understand the details of your loan, like when payments are due and how much they are.
- Reach out to Backed. If you’re unable to make a payment, contact Backed using its email notification system.
Backed personal loans offer competitive rates and flexible loan options to those with thin credit. It could be a good option if your looking to improve your credit and have friends or family members with excellent credit who trust you to pay back the loan.
However if you plan to apply by yourself, Backed isn’t much different from other nonbank lenders offering personal loans. And if you prefer to speak to a representative on the phone about your loan, Backed may not be the right lender for you.
Compare other providers and loan options to find what works best for your personal finance needs.