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Personal Loans

Karrot Personal Loans In-Depth Review

Updated May 09, 2023   |   3 mins read

Kabbage has decided to suspend their personal loan program (previously called Karrot). Their website states that they have increased their focus on small business lending. Compare the best personal loans rated by LendEDU.

In the midst of the fintech revolution and the birth of online lending, Kabbage, Inc. emerged as a leader in the business lending space. Offering small businesses access to quick, low cost financing, Kabbage propelled itself to the top of alternative lenders in just a few years.

On the heels of its success in the business arena, Kabbage introduced a personal loan version of itself called Karrot in 2014. Karrot was created to fill the gap between bank financing, which is unavailable to below prime borrowers and the pricey payday lenders. Now individuals have access to online personal loan financing with the same quick and easy application and approval process. This Karrot Personal Loan Review will cover most, if not all, of your basic questions. 

What Type of Personal Loans Does Karrot Offer?

The personal loans issued by Karrot range from $5,000 to $35,000 and can be used for any purpose. The repayment period can be 36 or 60 months (or 3 to 5 years). The annual percentage rate (APR) varies depending on credit and income, currently ranging from 6.44% to 27.22% and includes a non-refundable origination fee between 1.05% and 4.75%.

What is Karrot’s Application Process Like?

Karrot has taken the success formula developed and polished by Kabbage, which is a fast and easy application and the promise of a swift approval and funding. Karrot wants to be able to offer fast personal loan approvals while still keeping its interest rates low. To do that, it uses the same underwriting platform as Kabbage, which focuses on income and cash flow verification. The application process requires little documentation in addition to answering about seven questions.

Applicants are required to provide Karrot with access to their bank and social network accounts, from which it is able to verify income. To confirm which APR it will charge, Karrot does a soft pull on your credit history, which doesn’t hurt your credit score. All of this is done within a matter of minutes followed by an immediate decision. If you want to get some idea of what APR you might qualify for you can view its loan grades based on credit scores on its website.

If you want to proceed with the loan, you can verify the loan amount and the loan term. Karrot will then perform a hard pull on your credit to verify all of your information. If nothing changes, you can expect to receive the funds in your checking account on the next business day.

Karrot Loans Have Been Suspended

If you go to the Karrot website, you will find that it is not currently offering any loans. The company has announced a suspension of consumer loan activity as a result of some of the ongoing problems being experienced by industry leaders Discover Financial ServicesTD BankLendingClub, and Prosper. The companies have come under scrutiny for unsound practices that bring into question the stability of their business model. Kabbage and Karrot are reviewing their business models and working to shore up their internal control to keep the confidence of their investors. The companies have yet to announce when Karrot will be back to offering loans.