Backed Personal Loan, Pros & Cons and it’s Benefits

Backed Inc. has been in business since 2014. They offer personal loans to all sorts of people; it focuses on borrowers who haven’t established much credit history yet. By taking out a Backed personal loan and responsibly handling their payments, borrowers can get a fair APR and build their credit score at the same time.

In this article:

• Backed Personal loan Pros & Cons
• Backed Personal Loan Eligibility
• How Does the Backed Loan Application Process Work?
• Backed Personal Loan Rates & Fees
• Benefits of Backed Loans
• Downsides of Backed Loans

Backed Personal loan Pros & Cons

Backed Personal Loan Eligibility

To be eligible for a personal loan with Backed, you must meet the following criteria:

• 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

Getting a Backed Loan

If you need a loan, Backed has your back. The lender offers personal loans that can be used for a variety of reasons, including:

• Moving expenses
• Making a large purchase
• Paying off credit card debt
• Career investments
• Debt consolidation
• Professional training
• Vacations
• Weddings
• Home Improvements

Generally, Backed doesn’t care what you do with the money, but they will ask you about the purpose of the loan when you apply.

Backed is flexible when it comes to qualifying for their loans. You don’t have to meet a minimum FICO score requirement to qualify. You also won’t be required to meet a certain annual income requirement, which is helpful to young people who are just starting out their careers.

How Does the Backed Loan Application Process Work?

The first thing you need to do to apply for a Backed personal loan is fill out a quick online form. You’ll have to select the loan amount you’re seeking, the loan term, and the reason you’re seeking a loan. After that, you’ll fill out basic information about yourself, such as your name, birth date, Social Security number, address, and phone number.

You may also receive lower interest rates by adding a backer, who is essentially a cosigner for your loan. Adding a cosigner reduces the risks for Backed, which is why they’ll give you better interest rates for taking that step. But it also means your cosigner is on the hook if you default on your loan payments.

After the form is filled out, Backed will do a soft credit check, which won’t hurt your FICO score. If you’re given the green light, you’ll need to provide more personal information. The final credit decision could take up to 30 days to make the decision. Once you’re approved and you submit any additional documents Backed requests, you can have your money in as little as two business days.

Backed Personal Loan Rates & Fees

Backed’s loan terms and fees are fairly straightforward; you shouldn’t find any hidden surprises. You can choose a loan term of one, two, or three years. The loan amount you can borrow ranges from a minimum of $3,000 to a maximum of $25,000.

The annual percentage rate (APR) you’ll receive is dependent upon a number of factors, including your credit score and if you have a backer, but it will range from a low rate of 2.90% to a much higher rate of 15.99%. The more personal information you give Backed about your circumstances, the more likely you are to receive better rates.

With the loan structure Backed uses, you’ll get a lower APR for a longer-term loan. But keep in mind that generally, the longer your term, the more you’ll pay in interest over the life of the loan.You’ll also have to pay an origination fee for your loan. That amount can range from 0.80% – 2.00% of the amount borrowed.

Benefits of Backed Loans

Here are some of their best attractions and benefits of Backed personal Loans;

• One of the perks of Backed personal loans is the potentially low interest rate. If you have a creditworthy cosigner and you qualify for Backed’s lowest available APR, you’re getting a great loan rate.
• Another benefit is that if you don’t make your monthly payment on time, you still have a 15-day grace period before you’ll be charged a late fee or your credit score will be affected.
• The final major benefit is for your backer. Although a backer is essentially a cosigner, Backed cosigners enjoy some additional protection.

Downsides of Backed Loans

While this isn’t a deal breaker for most customers, you should be aware that Backed charges a $10 manual processing fee for every payment that is made by check. But if you make your payment through an electronic transfer from your bank account, there is no manual processing fee.

Finally, Backed’s lowest loan rates are only accessible if you or your backer have excellent credit. If you don’t have good credit, Backed may offer you a loan at their highest rate of 15.99% APR. That’s not a great rate, so you should, and there’s a chance you could do better with other loan providers, so always compare quotes from a few of the best personal loan companies.

If you feel you can’t get a better offer anywhere else, try your best to find a creditworthy backer. If you explain to family members that they have more built-in protection as a backer than they would as a traditional cosigner, they might be more apt to support you.

Final Thought: Is Backed Personal Loan Right for You?

Backed offers transparency in their lending terms, which is a refreshing change from some online and even brick-and-mortar lenders. You don’t have to be a rocket scientist or play detective to understand their loan terms.

Backed provides some solid options as well as a low listed APR rate of 2.9% which provides a competitive advantage. Another thing that Backed prides themselves on is their unique co-signer protection which allows parents and others to co-sign without traditional worry of delinquency.