If you’re in need of a personal loan but you don’t have the best credit, online lender Backed allows you to apply with a cosigner. The lender’s target market is Millennials who haven’t been able to build their credit scores yet, and cosigners are usually the borrower’s friend or family member. However, you don’t need to have a cosigner if you meet the lender’s minimum requirements.

The most significant benefit of obtaining a loan through Backed is the lender’s low interest rates, provided your credit or your cosigner’s credit is high enough. Backed only issues loans to residents in a few states, though.

Minimum Requirements for a Personal Loan with Backed

The requirements to obtain a personal loan through Backed vary depending on whether or not you have a cosigner.

Without a cosigner, your credit score must be 660 or higher and you must make at least $18,000 per year in gross income. You also need at least a 6-month credit history.

If you have a cosigner, then you don’t need to meet any credit score, income or credit history minimums. The cosigner will need a credit score of 720 or higher.

Loan Options with Backed

Backed issues loans to residents of Arizona, Arkansas, Florida, New Jersey, New York and West Virginia. Loans start at $3,000 up to a maximum loan amount of $25,000, except in Arizona where the minimum loan amount is $10,000. The maximum in that state is still $25,000.

Loan terms range from 1 to 3 years, and the APR ranges from 2.9 to 16 percent, making the interest rates with Backed potentially lower than most other personal loan options. After Backed approves you for a loan, it takes between 2 and 4 business days to receive the money.

Fees and Penalties

Backed has an origination fee between 0.8 and 2 percent depending on how they grade the borrower or the borrower’s cosigner. There’s no prepayment fee, and Backed provides a 15-day grace period for missed payments before charging a $20 late fee. There’s a $15 fee if your payment is unsuccessful, and a $10 fee for processing personal checks.

The Application Process

Backed using a grading system, basing the APR for your loan on the grade it assigns you as a borrower. At the beginning of the application process, you must provide Backed with information about your income, current debts, education level and how you plan to use the loan. The lender will then assign you a grade and provide you with an initial loan quote.

You can lower the APR on your loan by disclosing more information about yourself. Connecting a Facebook account helps Backed verify your identity, a LinkedIn account can support your employment history and education level, and a bank account provides more of your financial information, so all of these can result in a lower APR.

Of course, you can also lower your APR by adding a cosigner, and Backed says that this can result in up to a 41-percent APR reduction. The standard process is to add your cosigner when you apply for the loan, but you can also do so after you obtain a loan. If you add a cosigner after obtaining a loan, Backed will close out that original loan and create a new one.

Cosigner Notifications

One way Backed is different than most other lenders is the communication between the lender and cosigners. With a standard personal loan, the lender won’t notify a cosigner if the borrower misses a payment. If the borrower defaults, it will negatively affect both the borrower’s and the cosigner’s credit. The lender can also then attempt to collect the amount owed from the borrower and their cosigner.

Backed, on the other hand, sends automatic emails to the cosigner for every successful payment. In the event of a missed payment, Backed gets in touch with the cosigner through a text message or phone call to let them know. The cosigner can then contact the borrower or make the payment themselves within that 15-day grace period that Backed offers.

Flexibility

Backed is one of the more flexible lenders on the market, allowing borrowers to change their due date if necessary. If you’ve made your loan payments on time for at least 1 year, you can also contact Backed and ask about a possible reduction in your interest rate.

Final Thoughts

When it comes to personal loans, you could do much worse than Backed. The lender offers very low APRs and a quick, easy application process. It’s also great for cosigners because of the way the lender keeps them in the loop. If you need a personal loan and live in one of the states Backed services, consider giving it a try.