This all-in-one app is shaking up borrowing with unsecured lines of credit in limited states.
Even if you’re in control of your finances, you might need a loan for that dream vacation, for a fun wedding among friends and family or celebrate a milestone. Banks can be clunky, but borrowing is convenient — and there’s something to be said for keeping your money in one spot.
Varo is a mobile-based startup that’s taking advantage of the Internet’s recent transformation in banking, working to streamline what’s been around for ages. This all-in-one app just might have what you need to manage borrowing and more.
| Product Name | Varo Personal Loan |
|---|---|
| Min Loan Amount | $1,000 |
| Max. Loan Amount | $5,000 |
| APR | 10%–24% |
| Interest Rate Type | Fixed |
| Minimum Loan Term | 3 years |
| Maximum Loan Term | 5 years |
| Requirements | Must open a no-fee checking or savings account with Varo and live in an eligible state. |
- Open a no-fee checking or savings account with Varo
- Regular source of income
- Live in an eligible state
- US citizen or permanent resident
- Age 18 or older
What makes Varo personal loans unique?
Calling itself a “mobile business,” Varo is a different take on financial services. At its core, it’s a mobile banking app. Checking and savings accounts, personal loans, automated goals, spending tracking and other features expand it into something more than you might find with your bank.
What is Varo?
Varo offers three- and five-year loans through a flexible, unsecured line of credit. While the focus is debt consolidation, you can take out this line of credit for big purchases, vacations, family planning and more. And you won’t need to put up collateral.
To be eligible, you must first sign up for a no-fee bank account with Varo. Signing up for an account is a way that Varo “prescreens” its potential applicants.
What are the benefits of Varo?
- Consistent monthly payments. You’ll owe the same amount each month throughout the life of your line of credit. Other specialty lenders and online banks also offer fixed-rate personal loans, including SoFi and LendingClub.
- Big-picture approach. Because your checking and savings accounts are linked, Varo considers your overall financial health for approval. Other lenders may look at your income and credit report but lack Varo’s machine learning and finance tracking.
- Debt consolidation. Among Varo’s goals is becoming a single-point financial solution. Consolidating your debt means one payment in one place, right alongside your other finances. Specialty lenders may not offer the same capabilities.
What to watch out for
- Not your typical personal loan. Yes, you can borrow money with Varo, but it’s not like all loans. A flexible line of credit allows you to draw from it more than once after you’ve repaid some of what you’ve borrowed, which can encourage additional spending.
- Not available in most states. At the time of writing, Varo services borrowers in 19 states only.
- Existing Varo account required. Part of the screening process, you must have a checking or savings account with Varo. Specialty lenders and traditional banks don’t usually require in-house accounts.
- Rates and limits aren’t transparent. APRs and interest rates are unavailable on Varo’s website. Ditto minimum and maximum loans. Many lenders offer at least sample details, but we had to call the company twice to get numbers we could work with.
- Three- and five-year terms only. Depending on how much you need, you may not be able to easily pay it off in as few as five years. You’ll find longer and shorter terms with online and traditional lenders alike.
- App limited to iPhones. Varo says an Android app is coming soon, offering a waitlist online that you can join for alerts. But until it appears, you’ll need an iPhone. Many lenders and banks offer mobile apps alongside online services or physical locations.
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What do other customers say about Varo?
Though Varo doesn’t garner many reviews on the Better Bureau Business (BBB) website, Varo is accredited and earns an A rating based on the BBB’s internal criteria. You’ll see a few complaints, but Varo has responded to each — a good sign.
You can find app reviews on the App Store, where Varo earns a solid 4.7 out of 5 stars with more than 1,800 reviews. Negative reviews focus on features that don’t satisfy customer needs. Another highlighted review lists the features as good in concept, but explains that each falls short on execution.
Positive reviews focus on the app’s ease of use, though several mention that it’s slow to open an account and get started. We couldn’t find loans specifically about Varo’s personal loans, however, at the time of writing.
Am I eligible?
You must be a resident of one of the following states to qualify for a loan from Varo:
- Arizona
- California
- Colorado
- Florida
- Georgia
- Illinois
- Kansas
- Maryland
- Michigan
- Minnesota
- Missouri
- New Jersey
- New York
- Ohio
- Pennsylvania
- Tennessee
- Texas
- Utah
- Washington
You’ll also need to open a no-fee checking or savings account with Varo. Most lenders require applicants to be at least 18 years old, have a regular source of income and be a US permanent resident or citizen, so prepare to meet those criteria as well.
How do I apply?
To apply for a line of credit with Varo, you’ll first need to sign up for a no-fee banking account with the app. If you already own an account, simply go to Varo’s app to get started with your loan application.
Otherwise, Varo makes it easy to apply for an account and a loan in a few easy steps:
- Go to Varo’s website and click Get Started at top right.
- Download the app with your phone number or through the App Store.
- Apply for a no-fee bank account with Varo.
- Wait for Varo to consider your application, typically 24 to 48 hours.
- After approval and setting up your bank account, apply for a loan through the app.
I got a personal loan from Varo. Now what?
Now that you have the cash you need, it’s time to figure out how to make repayments. Through the app, you’re able to both set up recurring electronic funds transfers (EFTs) and make one-off payments. Varo also accepts personal checks by mail.
While they vary by state, late fees can run you up to $25 or a percentage of the amount due, while return check fees are typically $15 to $30.
Recurring payments from your Varo bank account are a solid way to avoid both fees, as long as your balance can accommodate the amount due on the day of your repayment.
Bottom line
Varo is a startup offering an all-in-one take on banking and personal lending. Its loans are designed for those looking to use Varo as their entire financial platform, requiring a Varo bank account before you can get started with borrowing. For now, the app is also limited iPhones, though you can join an Android waitlist for updates.
But if you fit what Varo’s offering, it could be a way to get access to a line of credit and stay in the black.
Happy — or at least satisfied — with the bank you have? See if another lender is a better fit with our comprehensive guide to personal loans.
