An online lender with its headquarters in California, LoanDepot has been extremely popular since its inception in 2010, issuing over $70 billion in loans. While the majority of its loans are mortgages, the lender also began issuing unsecured personal loans in May of 2015. Even for its personal loans, LoanDepot’s main market is homeowners who are either paying for projects around the home or consolidating their debt.
Minimum Requirements to Obtain a Loan Through LoanDepot
While LoanDepot doesn’t have any requirements regarding the gross income or the credit history of its borrowers, you do need a credit score of 660 or higher. Your debt-to-income ratio, not counting a mortgage, can’t be any higher than 40 percent. The average credit score for this lender’s borrowers ranges from 705 to 715, so it’s primarily an option for borrowers with good credit.
Loan Options with LoanDepot
You can obtain a loan for between $5,000 and $35,000 with LoanDepot, and APRs are between 6.17 and 29.52 percent. Loans are available for 3 and 5-year terms, and it takes 3 days to receive your money. The LoanDepot origination fee is between 1 and 5 percent.
There’s no prepayment fee or personal check processing fee. The lender gives you a 15-day grace period to make your payment, but after that there’s a $15 late fee. Returned payments incur a $15 fee.
The Application Process
You can apply for a personal loan with LoanDepot through its website or over the phone. When you apply online, you fill out information about your identity and income, then LoanDepot runs a soft credit check so it can provide you with a rate quote. After you’re finished with the application, you’ll receive a phone call from a LoanDepot representative to verify the information that you entered.
LoanDepot will run a hard credit check after it approves your application and then direct deposits your loan into your bank account. While soft credit checks have no effect on your credit score, hard credit checks can.
How LoanDepot Compares to Other Lenders
In terms of its interest rates and origination fees, LoanDepot is competitive with most other online lenders. Other lenders who offer comparable loan options include Discover, Freedom Plus, Prosper, Lending Club and Wells Fargo. However, Wells Fargo and Discover don’t have origination fees with their loans, so you’ll save in that area with those two lenders. Those two lenders and Freedom Plus also have a debt consolidation option that allows you to pay back your creditors through them, which is a convenient way to consolidate your debt.
Each lender has its own grading system that it uses to determine your loan’s APR and your origination fee. Lenders typically use your credit history and your income as the primary factors in calculating your grade as a borrower, but they all have their own algorithms.
Because of the different grading systems, it’s possible that some lenders will offer you loans with a lower APR than others. That’s why it’s a wise choice to shop around and get rate quotes from several online lenders. Even a difference of 1 or 2 percent in your loan’s APR could save you hundreds or thousands of dollars.
Personal loans may not be LoanDepot’s primary focus, but the lender is a solid option if you have good credit. It doesn’t have as many options as some other lenders, but its interest rates are fairly low, making it worth a look.