Rocket Loans Pros and Cons for Credit Card Debt Consolidation Loan. Yes, Same Company as Rocket Mortgage.

Welcome back to The Yukon Project. We’ve analyzed millions of credit reports, hundreds of thousands of people’s financial information, and designed programs to help improve people’s financial lives. Today, we’re going to look at the pros and cons of consolidating credit card debt with Rocket Loans.

One pro of using Rocket Loans is that they offer APRs ranging from 9.12% to 29.99% for the Credit Card Debt Consolidation Loans.

If you have a strong credit profile, you may be able to secure a rate on the lower end of that spectrum, which could save you money compared to high-interest credit cards. But, even if you only have fair or good credit, you could be approved. The minimum credit score that Rocket Loans will approve for their loans is 640. 

Another pro is that Rocket Loans offers loans between $2,000 and $45,000.

This wide range means they may be a good fit whether you have a small amount of debt to consolidate or a more significant amount. If you have more than $45,000 in credit card debt, I would recommend consulting a certified debt counselor at a non-profit organization. They can help you think through your options.

Rocket Loans offers a decent personal loan, but there are a few reasons why they aren’t ideal for credit card consolidation. 

One con is that Rocket Loans doesn’t allow cosigners on their credit card consolidation or personal loans.

A cosigner is someone who agrees to take responsibility for your loan if you can’t make payments. If you can get the loan you need without a cosigner, it’s best not to include one. But if you might struggle to be approved or get the amount you need, a cosigner can help. Rocket Loans does not let you add a cosigner, though. 

Rocket Loans also charges an origination fee of up to 9% when you take out the credit card debt consolidation loan.

This fee comes out of your loan proceeds. For example, if you borrow $10,000 with a 5% fee, you’ll only receive $9,500 while still owing $10,000. Origination fees are quite common, but not all companies charge them. If you are offered two loans with the same APR, the one with the lower origination fee is better, especially if you plan on paying the loan off early. 

Rocket Loans also charges a couple of other fees. There’s a late fee of $15 if you miss a payment. There’s also a bounced check fee of $15, if there isn’t enough money in your account when they try and draw your payment. Of course, we always hope to never have to worry about these fees, but things happen. Being late on Rocket Loans payments can add to the cost of borrowing. 

Another drawback of their credit card debt consolidation loan is that Rocket Loans doesn’t offer direct payoff of your credit cards.

ou’ll receive the loan funds and need to pay off your cards yourself. Some people prefer the convenience of having the lender handle this process. But there’s another reason why it’s good that a lender offers this service: it means that they understand that the loan is meant to replace other debt and won’t add to your existing debts. This should make it easier to be approved for a loan. Unfortunately, Rocket Loans doesn’t offer this service. 

Here’s the gist: Rocket Loans is a respectable personal loan provider, but they lack many of the features that would be important when consolidating your credit card debt with them.

As always, we recommend comparing offers from multiple lenders before making a decision. Every lender has a different algorithm on how to decide who to lend to and at what rate. You should shop around to be sure you’re getting the best deal you can get. At The Yukon Project, we’ve tried to make shopping around easy. On our marketplace page, you can apply to one of our featured lenders and we will check your rate with up to 40 others behind the scenes. They use soft credit pulls, so applying won’t affect your credit score. We will show you all the companies that approve you so you can pick the best lender for you. 

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