Everything you need to know before taking a Rocket Loans Personal Loans.
I’m sure you’ve heard of Rocket Mortgages. Well, that company also offers personal loans. So, the question we are going to answer today is whether personal loans from Rocket are any good. Should you consider them when you are consolidating your credit card debt, looking to make a big purchase, or just trying to cover a monthly shortfall? We’re going to walk through the details so you can make the decision that’s best for your circumstances. Lets get at it.
The first question is obviously, “How much can you borrow from Rocket?”
Rocket Loans has a minimum loan amount of $2,000. That means Rocket might not be the best option if you are just trying to fill a gap in your monthly finances. If you think $2,000 is more than you need, any of these lenders offer loans below $2,000. If you are looking for a more substantial amount of money, Rocket will lend as much as $45,000. That’s a lot of money and will probably cover whatever you need. If you need more than that, you could look to any of these lenders.
The personal loans from Rocket have terms between 2 to 5 years.
That is a standard range for personal loans of this size.
What credit score do you need for a Rocket personal loan? Rocket boasts that they focus on “high quality, prime borrowers.” Prime is a word for credit scores in the Good-to-Excellent range. In this case, above 680. Rocket will automatically reject applicants with credit scores below 640. But even if you do clear that hurdle, there’s no guarantee of being accepted. This is just a guideline. In determining your eligibility, Rocket will look at your credit score, but they will also look at other things like your payment history, debt-to-income ratio, utilization, amount and type of income, bank transaction data, and other financial information. Your particular mixture of these factors will determine if you are approved, for how much, and at what rate.
Now let’s look at Rocket Loans’ APRs.
Their lowest APR is 9.12% and their top APR is 29.99%. They will determine your rate by looking at your credit history, yearly income, debt amount, loan term, home ownership, and number of credit inquiries, among other items.
Your rate will also be influenced by the payment method you select in the application process. In fact, you can earn an APR discount for signing up for autopay. But, you will only get the discount if you sign up at the time of accepting the loan. If you sign up for autopay after you have accepted the loan, they will not apply the discount.
Rocket Loans charges origination fees go “up to 9%.” As context, slightly more than half of the lenders we track charge an origination fee. Any fee over 6% is getting to be on the high side. But, 9% is still not the highest in the industry. The origination fee comes out of the proceeds of the loan. So, you need to make sure that you borrow enough for your financial need as well as the origination fee. The origination fee doesn’t actually increase the cost of the loan. A loan with a high origination fee and a low APR, is still a low-cost loan. But, you want a lower origination fee if you plan on paying the loan off early. If you pay off the loan early, you save money on the interest you would have paid, but you don’t get a reimbursement of the origination fee.
Adding a cosigner or a co-applicant to a loan can strengthen your application. This is especially true if the cosigner has a stronger profile than you do. But, if you think you will need that extra support, you will need to find a different lender, because Rocket Loans does not accept cosigners.
If you’re late on a payment, Rocket Loans will charge you $15 once in a pay cycle. Not all personal loan companies will charge a late fee. Those that do will charge anywhere between $10 and $39. So, $15 is on the low end of those that charge them.
If you find that you are often late on your payments, you would have another fee to contend with. Rocket will charge you a “Bounced check” fee if you don’t have enough money in your account when they attempt to draw your payment. So, even though, $15 is not a high fee, borrowing from Rocket Loans could get expensive if you find are the kind of person who is chronically late making your payment.
If you are using the loan to consolidate credit card balances of other debt, Rocket Loans will not use the loan’s proceeds to pay off your other creditors for you. I like it when companies will do that because it shows they are taking into account the fact that the loan is meant to replace your other debts and not just stack on top of them. They are showing that they understand that the loan will not make your debt-to-income ratio worse. That should make it easier to be approved by them when you already have substantial debt.
After you submit your application, you should know within seconds whether you are approved. If they do offer you credit, they will present you with multiple loan amounts, payment terms and interest rates. You won’t just get a single take-it-or-leave-it offer. You will have several option, so you can choose what works best for you
Rocket Loans can send you funds quickly once you’ve been approved. In fact, you could get the money from Rocket Loans on the same day…but that will depend on the bank you use and whether you accepted the loan before 1 pm Eastern. More likely, you will get your money in 1-3 business days.
What can you use a Rocket Loan for?
Rocket Loans does not limit how you use the money. You are free to use the funds however you would like. That’s kind of the point of an unsecured personal loan. Common uses include: Credit card consolidation, debt consolidation, home improvement, moving expenses, major purchases, life events like marriages, funerals, having a baby or adopting, home repairs, vehicle repairs, or an unexpected emergency.
Let’s summarize personal loans from Rocket Loans.
Rocket Loans offers a decent range of loan sizes, but they may be too exclusive for most people because they claim to focus on “prime” borrowers. Their lowest APR is higher than many, but their highest APR is lower than many. They might offer you a higher-than-average origination fee. They don’t have features that many lenders do, and so may not be ideal for things like debt consolidation. They do charge fees, but they aren’t egregious. I think Rocket Loans is probably an average lender in the space.
For many people, the most important thing about a loan is whether you can get the money you need with the best terms. So, even if Rocket Loans offers you a loan with terms that seem pretty decent, you should still shop around. Make sure you’re getting the best deal. Get three to four offers before you make a decision on which loan to take.
At The Yukon Project, we’ve tried to make shopping around easy. If you visit our marketplace page, you can apply to any one of our other featured lenders. Behind the scenes, we will check your rate with up to 40 other lenders. Our partners use a soft credit check, so applying won’t hurt your credit score. We will show you all of the approved offers so you can pick the loan that’s best for you.
If you have any questions we didn’t cover, leave a comment below and we will try and answer it. If you found this video useful, please like it and subscribe to our channel. Thanks for watching.
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