Written by:Thomas J. Brock
Somer G. Anderson, Accounting and Finance Professor Ph.D., CPA, CGMA, CFE
Here at Finimpact.com, we strive to provide you timely, transparent, and relevant information on the various lenders, loan aggregators, and peer-to-peer solutions we cover. To this end, we’ve established a comprehensive rating system to quantitatively assess each of them.
Our experts evaluated each platform based on seven parameters. All parameters were evaluated using a five-point scoring system
- Excellent = 5
- Good=4
- Average=3
- Subpar=2
- Poor=1
The seven parameters are outlined below. The first three reflect loan-type specificity; the latter four were rated at the platform level.
- Loan Features: This parameter considers loan term lengths, loan minimums and maximums, and the extent of loan use limitations. Each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall loan features score.
- Interest Rates and Fees: This parameter considers borrowing/origination fees, prepayment fees, late payment fees, maintenance fees, miscellaneous fees, and minimum/maximum interest rates. Each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall interest rates and fees score.
- Qualification Leniency: This parameter considers the extent of membership requirements, minimum credit score requirements, and co-signer/joint application optionality. Each of these features was evaluated using the five-point scoring system. Then, the various scores were aggregated and averaged to establish an overall qualification leniency score.
- Application Process: This parameter considers the invasiveness of application information requirements, “hard-pull” credit score impact, application processing time/funding time for approved applications, and any distinctively competitive offerings. Collectively, these features were evaluated using the five-point scoring system.
- Customer Support: This parameter considers a platform’s accessibility to a live CSR rep during standard hours, accessibility to a live CSR rep during extended hours, the degree of multi-channel support, and the availability of supplemental information and tools. Collectively, these features were evaluated using the five-point scoring system.
- User Reviews: This parameter considers the scores achieved from independent user review sites, such as Trustpilot. Ideally, each platform’s rating reflects scores from three distinct user review sites. However, this isn’t always possible. Ultimately, the various scores were aggregated and averaged to establish an overall user reviews score.
- Perks Bonus: This parameter gives each loan platform the opportunity to boost its overall score, if it satisfies specified service offering requirements across the following categories: flexibility, transparency, and technology. If a lender satisfies the requirements, it receives a 5-point score that is factored into its overall rating. If a lender does not meet the criteria, this parameter does not factor into the overall rating.
The overall score for each loan platform reflects an average of the underlying parameter scores (seven for Perks Bonus qualifiers and six for non-qualifiers). All of the parameters receive equal weighting. Finimpact believes this approach is optimal; however, if the environment evolves, we may look to weight some parameters more heavily than others.
Ratings Rationale & Details
The criteria used to determine the scores for the seven parameters are outlined below.
Loan Features
| One star | Two Stars | Three Stars | Four Stars | Five Stars | |
| Term Length | 1 year or less | Between 1 and 2 years | Between 2 and 5 years | Between 5 and 10 years | Over 10 years |
| Loan Amount - Min | Over $4,000 | Between $2,000 and $4,000 | Between $1,000 and $2,000 | Between $500 and $1,000 | Less than $500 |
| Loan Amount - Max | Up to $20,000 | Between $20,000 and $40,000 | Between $40,000 and $60,000 | Between $60,000 and $80,000 | Over $80,000 |
| Loan Use Limitations | Extreme Limits | Cumbersome Limits | Standard Limits or Unspecified | Minimal Limits | No Limits |
Interest Rates and Fees
| One star | Two Stars | Three Stars | Four Stars | Five Stars | |
| Origination Fees | Over 6% | Between 4-6% | Between 2-4% | Between 0-2% | None |
| Prepayment Fees | Prepayment fees exist | N/A | N/A | None | None with discounts |
| Late Payment Fees | 2.5% or more | From 0% to 2.5% | From $25 to $50 or unspecified | Between $0 and $25 | None |
| Interest Rates - Minimum | Over 12.5% | Between 10% and 12.5% | Between 7.5% and 10% | Between 5% and 7.5% | Under 5% |
| Interest Rates - Maximum | Over 35% | Between 30% and 35% | Between 25% and 30% | Between 20% and 25% | Under 20% |
Qualification Leniency
| One star | Two Stars | Three Stars | Four Stars | Five Stars | |
| Minimum Credit Score | 700 or higher | Between 650 and 699 | Between 600 and 649 | Between 550 and 599 | 550 or lower |
| Membership Requirement | Membership requirement exists | N/A | N/A | N/A | N/A |
| Co-signer/Joint Application Optionality | Prohibited | Required without Release | Required with Release | Optional without Release | Optional with Release |
Application Process
| Default score | Subtraction of one star (-1 star) | Addition of one star (+1 star) | |
| Informational Requirements | 3 stars | Overly Invasive Informational Requirements | N/A |
| Hard/Soft Credit Pull | 3 stars | Hard-pull | N/A |
| Turnaround Time | 3 stars | N/A | Between 24 and 72 hours |
| Distinctively competitive offerings | 3 stars | N/A | Exist |
Customer Support
| Access to Live Chat Customer Service Rep | +1 star |
| Standard Call Center Support 9 - 6 EST | +1 star |
| Expended Call Center Support | +1 star |
| Multi-channel Support | +1 star |
| Supplemental Support | +1 star |
User Reviews
Parameter reflects the scores achieved from independent user review sites such as Trustpilot.com
Perks Bonus
This is a bonus parameter that gives a loan platform the opportunity to boost its score. A 5.0 score is attainable, if a lender satisfies at least one of the flexibility items listed below, both of the transparency items, and at least one of the technology items. If a lender does not meet the criteria, this parameter does not factor into the overall rating.
Flexibility:
- Offers rewards and/or discounts (aside from prepayment discounts, which are incorporated in the “Interest Rates & Fees” parameter)
- Allows for payment deferral or payment skipping optionality during times of hardship
- Allows for modification of loan terms
Transparency:
- Maintains a professional website that is informative, intuitive, and free of misleading advertising and sales gimmicks
- Has no history of complaints from customers regarding poor sales practices
Technology:
- Offers the ability to pay online
- Offers autopay optionality
- Provides mobile functionality
- Provides loan management tools