In the US, it's great to get many spectacular PERSONAL LOAN OFFERS in the mail.

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Many companies such as sofi.com and figure.com pump these.

I am wondering

(1) Are these generally seen as "a good deal", or it more the case "Just click for a personal loan from the local credit union you use, unless you have crap credit and have to use one of these guys"

(2) I assume that these type of entities are simply a marketing front for one of the large banks - is that basically correct?

Are these things something of a smart choice to shop around for a good rate, or is it more bottom of the barrel stuff?

  • 4
    Those advertisements aren't cheap, guess where the money for them comes from...
    – Ben Voigt
    Dec 17 '18 at 16:16

Check out the interest rates and other terms.

Lets look at it from a business perspective. For that kind of money, people normally go to a bank and get a great (now days) interest rate. So, who is the market for these guys? People who can't get a bank loan (people who are considered too risky for the banks). Risky people are more likely to have payment issues. This costs the lender more. From there it is just a risk rewards calculation where the cost of the loan goes up based on the risk.

What collateral does the loan ask for? What happens to the interest rate if you miss a payment?

Note that in the times leading up to the 2008 crash, there were a lot of what are termed "liar loans" or, more properly, stated income loans that asked for no verification. The companies then sold off the loans as quickly as possible and another company tricked investors into investing into them by calling them low risk.

  • What bank? Many banks don't offer personal loans because any way you look at it, they're risky. Chase and Bank of America, the biggest two US banks don't. Wells Fargo and Citibank do but require you to have a history with them.
    – user71659
    Feb 20 '19 at 5:14
  • @user71659, Exactly. To get $100k, you generally have to collateralize the loan. Anyone who doesn't have collateral is risky and, generally, can't get that loan from the bank.
    – ShadoCat
    Feb 20 '19 at 19:48

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