Vouch No more Offers Personal Loans

San Francisco, California-based lender, Vouch, stopped offering personal loans and closed its virtual doors in summer 2021. Rumblings of the company’s closure grew loud in June 2021, based on an article within the Wall Street Journal, which suggested that Vouch was unable to contend with larger online lenders. Continue reading to understand a bit about what made Vouch various and how to proceed if you had an unsecured loan with this particular lender.

What Made Vouch Different?

Unlike traditional lenders, Vouch let borrowers leverage their social and phone networks to score low-interest loans. To qualify, an applicant had to have a credit rating with a minimum of 580 and a minimum of one adult aged 18 or older who promised to pay a minimum of $100 if the applicant didn’t pay back the borrowed money. Vouch’s lowest interest rates fell between 5% and 3%, with loans between $500 and $7,500. The speed and amount available relied on each applicant’s credit rating, income and also the number of individuals who vouched for your kids.

More Vouches, Better Loan Terms

The more vouches each applicant received, the greater their loan terms could be. For example, for every qualified vouch, borrowers could decrease rates of interest as much as 5% and increase their loan offers by $250 per vouch, as much as $750 as a whole.

Here’s a good example that illustrates how it worked. Susan requested a $1,000 personal bank loan with Vouch, and she or he had five qualified vouches. She received financing offer of $750 with an intention rate of 14% based on her creditworthiness. Her five qualified vouches allowed her to boost her loan offer of $750 to $1,500. Additionally, the five vouches allowed her to reduce her initial interest rate of 14% to 11%.

Why Is Vouch Closing?

When it had been founded in 2021, Vouch’s unique lending model seemed like an encouraging new take on online lending. According to the Wall Street Journal article, Vouch hoped to become listed on peer-to-peer lenders such as Prosper and Lending Club, but the lender wasn’t able to gain the same traction of its larger competitors.

What Happens to Vouch Customers?

Although Vouch is no longer offering unsecured loans, if you have a current loan you can expect continuing service. The website for Vouch Financial indicates that new information mill taking over the servicing of current loans.

About Personal Loans

Before you begin searching for a personal bank loan, request a duplicate of the credit history from each of the three credit agencies (Experian, TransUnion and Equifax). You’re eligible for one no-cost copy from each of these credit bureaus every 12 months. Assess your strengths and weaknesses, note your credit score to check out any possible mistakes. If you notice an error, notify the loan bureau to get it corrected.

Knowing in which you sit from the creditworthiness standpoint provides you with a jump while exploring for lenders. For those who have fair credit, you may wind up paying a greater APR. For those who have good or excellent credit, you may have other options like a 0% interest credit card offer or a home equity line of credit that may set you back less in the end.

If you pursue a personal loan, compare terms between several options to obtain the best rates. Don’t take out financing having a payment per month that doesn’t match your budget.