Rocket Loans Review: Is This Personal Loan Right for You?
Known for speedy loan fulfillment and low interest rates, Rocket Loans has become a notable player in the online lending space. However, consumers should be mindful of the origination fees associated with Rocket Loans personal loans.
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There are few brands that command the online loan industry like Quicken Loans, and Rocket Loans — the company’s personal loan branch — has certainly reaped the benefits of that name recognition since its 2015 founding.
For many borrowers, however, Rocket Loans represents more than just a well-connected brand. Instead, borrowers recognize the lender for its “rocket fast” loan fulfillment — a highly desirable trait in today’s digitally driven, constantly moving economy.
Though the company must contend with a growing number of competitors that offer online applications and quick loans, for highly qualified borrowers, the rates and speed may be enough to set Rocket Loans apart. If you fall into that category and are considering a Rocket Loans personal loan, here are a few things you should know.
In this review:
Rocket Loans does not currently lend in Iowa, West Virginia, and Nevada.
How to Get a Rocket Loans Personal Loan
In order to qualify for one of these loans, you must be a U.S. resident who is 18 years of age or older (19 in Nebraska and Alabama). Rocket Loans does not currently serve residents in Iowa, Nevada, or West Virginia.
In addition to those basic age and residency qualifications, borrowers must be currently employed and meet certain credit requirements. Rocket Loans also considers factors like your income and debt-to-income ratio when determining your eligibility, interest rate, and other loan terms.
You can begin the loan process by following these steps:
1) Apply for Pre-Approval
All applicants fill out a brief initial application that allows Rocket Loans to collect basic personal information, your Social Security number, and income details, all of which will be used to determine your eligibility.
Although many online lenders allow potential borrowers to input their desired loan amount, Rocket Loans will let you know the total loan amount for which you’re eligible after you submit this preliminary application.
This step results in a soft credit check, so your credit score will not be affected.
2) Review Your Loan Options
After you submit the pre-approval form, you’ll be able to use the Rocket Loans offer tool to view rates and terms for any loan amount, up to and including your pre-approved limit. To proceed, potential borrowers must select an offer and complete the full application.
3) Complete the Full Application
After selecting the desired offer, applicants will be taken to a loan summary that includes the total loan amount, origination fee, monthly payment, and loan rates. You’ll then provide your employment status, create a Rocket Loans account, and input your banking information for direct deposit of your loan proceeds.
Once the loan application is complete, Rocket Loans will verify the information. Although this typically happens in real-time, some borrowers may be asked to provide additional documentation, which can include pay stubs, a valid ID, bank statements, or tax return.
Proceeding with this step will result in a hard pull of your credit report.
4) Receive Your Loan Funds
After the applicant has agreed to the final loan terms and all information has been verified, Rocket Loans will begin the loan origination process. In some cases, loan funds are deposited into your bank account the same business day, depending on your financial institution.
Basic Information: Rates, Terms, Fees & Limits
- Rates: APRs from 5.983% to 29.99%
- Terms: Three or five years
- Fees: Origination fees between 1% and 6% depending on creditworthiness
- Limits: Loan amounts from $2,000 to $45,000
Rocket Loans determines interest rates and other loan terms based on the applicant’s credit score, annual household income, total loan amount, loan term, and debt-to-income ratio, among other factors.
Pros & Cons of Rocket Loans
- Fast funding. As the name would suggest, the major benefit of a Rocket Loans personal loan is a simple application and same-day funding in many cases.
- Customizable loan options. The customized loan options you’re provided take some of the guesswork out, particularly when it comes to how much you should or can request.
- Pre-approval to see rates and terms. Once you’re pre-approved, Rocket Loans provides you with transparent information regarding your loan payment, interest rate, origination fee, and available repayment terms, making it easy to select the best option for your circumstances.
- Origination fees. Rocket Loans charges origination fees, making them a more expensive option compared to other lenders.
- Higher rates than competitors. There are lenders that offer lower minimum rates than Rocket Loans. If you have a great credit score, you may be able to qualify for a better rate elsewhere.
- Fewer repayment term options. Rocket Loans only offers term lengths of 36 or 60 months. Many other lenders offer a wider variety so you can find a monthly payment that fits your budget.
- Bad credit borrowers may not qualify. If you have bad credit, chances are you’ll be assigned a high APR or may even be turned down altogether. In this case, you should check out our Best Bad Credit Loans Page to see our top picks.
Backed by the name recognition of Quicken Loans and Rocket Mortgage, Rocket Loans has propelled itself into the online lending space and boasts relatively competitive rates and quick funding. However, the growing popularity of online lending has made it harder for the company to rest on its laurels.
Rocket Loans borrowers who face the highest origination fee may be better served with another lender who doesn’t charge such fees.
Fortunately, like many lenders, Rocket Loans offers a straightforward application process that allows you to check your rates, fees, and other loan terms without impacting your credit. For that reason, Rocket Loans is worth consideration, but borrowers should also compare offers from other lenders before making a final decision.
To check out more options, you can visit our Best Personal Loans page.
Author: Jennifer Lobb