The bottom line: Specializes in loans for borrowers who are "backed" by a co-signer. It lends in only a few states.
Min. Credit Score
2.90 - 15.99%
$3,000 - $25,000
Pros & Cons
Low starting rates.
No prepayment fee.
Available in limited number of states.
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[Update Jan. 3, 2020: NerdWallet cannot confirm that the information in this review is still accurate because Backed has not responded to our requests to verify its data. We'll continue to try to contact the company. In the meantime, please check out other lenders that accept personal loan co-signers.]
Low rates with co-signers: Applying with a co-signer can help you get approved for a loan that you wouldn’t get on your own, and adding a backer can reduce your interest rate.
For borrowers with well-qualified co-signers, Backed’s annual percentage rates start around 3%. Only the most creditworthy applicants get that low rate.
You can also apply for a Backed loan on your own. If the rate you receive is too high, you can apply again with a co-signer to try to qualify for a lower rate.
Fees: Backed charges an origination fee of between 0.8% - 2.0% of loan amount.
Automatic payment notifications: The company automatically sends co-signers email notifications of all regular payments. If the borrower misses a payment, Backed notifies the co-signer and offers a 15-day grace period to make the payment.
The co-signer has that time to get the borrower back on track before he or she incurs penalties or gets late payments reported to a credit bureau. If that happens, it will impact the credit histories of the borrower and co-signer.
While the notification feature allays some concerns, NerdWallet recommends that consumers consider co-signing a loan only if they can afford to take over the payments themselves.
How to qualify:
With a co-signer:
Co-signer's minimum credit score: 720.
Co-signer's minimum annual income: 50,000.
Without a co-signer:
No minimum credit score.
No minimum annual income.
Loan example: A borrower with excellent credit who takes out a $10,000 loan with a repayment term of 24 months at 13.9% APR would make monthly payments of $480, according to NerdWallet’s personal loan calculator.
How to apply for a Backed loan
You can start applying on Backed’s website by answering questions about why you need the loan, how much you need and for how long, as well as about your college degree or diploma. The site ranks you in comparison with other applicants (“top 30%”) as you provide further details on your job, housing situation, address and birth date.
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NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including: soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus, and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews. Read our editorial guidelines.