Know someone with excellent credit? This lender lets you recruit them as a backer for better rates.
|Product Name||Backed personal loans|
|Min. Loan Amount||$3,000|
|Max. Loan Amount||$25,000|
|APR||2.9% to 15.99%|
|Interest Rate Type||Fixed|
|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. It looks at more than just your credit score — your education and employment history are also taken into consideration.
But what really sets Backed apart from other lenders is that you’re allowed to 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 can help you stay on track with your payments and 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 onto your loan, they promise to pay back your funds if you can’t. Typically, cosigners are notified once the borrower is 30 days past due, and both the borrower’s and cosigner’s credit scores are impacted. Backed 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 between $3,000 and $25,000 to residents of six states: New York, New Jersey, Arkansas, West Virginia, Florida and Arizona. Interest rates are fixed and range from 2.9% to 15.99% APR, including an origination fee of 0.8% to 2%. You can choose to pay back your loan in 1 year to 3 years — depending on your credit history.
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. If you have a backer, they must have a credit score of at least 720 with an annual income of $50,000 or more. Because of this, your credit score and income can be lower.
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What are the benefits of a Backed personal loan?
From its low starting rates to its quick turnaround, here are a few benefits of a Backed personal loan:
- Competitive rates. Rates start at just 2.9%, compared to the 5% to 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 turnaround. If you’re approved, you may be able to 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, which means you might have to wait on a response.
- Origination fee. Backed charges a one-time loan processing fee of up to 2% of your loan amount, ultimately leaving you with less money upon funding.
What does the Internet say about Backed?
Not much. While it has a page on the Better Business Bureau (BBB), it doesn’t have any customer reviews or complaints listed. And despite the BBB’s advertising review warning from 2016, Backed still receives an A rating. Backed doesn’t have a page on Trustpilot at all.
Unfortunately, this means you may be left in the dark about how well Backed treats its borrowers until after you sign your loan contract.
Am I eligible?
To be eligible for a personal loan with Backed, you must meet the following criteria:
- Have a credit score of at least 660 or a backer with a credit score of at least 720.
- Have a minimum annual income of $18,000 or a backer with a minimum annual income of $50,000.
- Live in New York, New Jersey, Arkansas, West Virginia, Florida or Arizona.
- Have not declared bankruptcy in the last seven years.
- Are a US citizen or permanent resident with a valid visa.
- Are at least 18 years old.
- Have a valid bank account.
How do I apply?
Follow these steps to apply for a Backed personal loan:
- Go to Backed’s website and select the term and loan amount you’re interested in. 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 this initial 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.
Once your final application is approved, 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?
Once you receive your funds from Backed, it’s time to start thinking about repayments. Follow these steps:
- Make on-time repayments. Keep track of when your repayment is due each month to avoid a $20 late fee. If you choose to pay by check, Backed charges a $10 check processing fee. And if your check bounces — or you don’t have enough in your account to cover your payment — you’ll be charged a $15 unsuccessful payment fee as well.
- 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 as soon as possible.
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 one that works best for your personal situation.