Based in New York, Peerform is a peer-to-peer lending platform that offers personal loans even for people with bad credit. Peerform judges your application with a more holistic approach to loan approval than just your FICO score using the Loan Analyzer.
As with most other peer-to-peer lending platforms, Peerform assigns a grade level based on your financial and credit information, and they base your loan rates on that rating.
Investors must then fund Peerform personal loans through its lending platform. Think of it as a Kickstarter campaign, except investors get the loan interest as a return on their investment in you.
You might have several investors take a stake in your loan or have your entire personal loan funded by one. It may sound like a lengthy process, but in reality, it’s pretty quick and comparable to other lenders. If this sounds like an intriguing process, keep reading to find out more about Peerform personal loans.
Peerform Personal Loans
Peerform offers loans in every state except Connecticut, North Dakota, Vermont, West Virginia, Wyoming, and Washington D.C.
Loan amounts range between $4,000 and $25,000. No collateral is necessary for these unsecured loans, making it a lower-risk option.
All Peerform loans have fixed interest rates that range from 5.99% to 29.99% APR. The origination fee is included in the APR. It costs anywhere from 1% to 5% of your loan amount, depending on your Peerform grade. The origination fee is subtracted from your loan funds before the money is disbursed. Loan terms and fees may vary by state.
Each Peerform personal loan lasts for three years, although there is no penalty for paying it off early. You may use the loan proceeds for many purposes, such as debt consolidation, weddings, home improvement projects, medical expenses, and moving expenses.
Debt consolidation is the most popular loan type amongst Peerform borrowers. However, it’s essential to make sure you’re actually saving money on your payments and interest before taking this route.
Peerform is not one of our top picks for 2022. Click the link below to see which companies we think are better.
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Best Personal Loans for 2022
Peerform doesn’t list too many requirements for borrowers. You’ll need a minimum credit score of 600 to qualify for a Peerform loan, in addition to at least one year of credit history. You don’t have to make a certain amount of money, and you’ll need your debt-to-income ratio (DTI) to be under 40%, not including mortgage debt.
However, those bare minimum requirements don’t necessarily reflect Peerform’s typical borrower. In fact, the average borrower has a credit score of 665 and earns $85,000 a year.
The average DTI is also much lower than the maximum, coming in at 19.3%. Peerform states that it targets borrowers with credit scores in the mid-600s, which is still below the national average of 687.
Peerform Application Process
Peerform allows you to check your interest rate with a pre-approval form. Your actual rate depends on your credit score, loan amount, loan term, and credit history. This step is a bonus because the lender does not perform a hard credit check at this point. However, once your personal loan is approved, they will conduct a hard inquiry to confirm your credit information.
After formally applying, you can pick your repayment terms and monthly payment amount from various loan options. Your loan request is then listed on the marketplace platform to get funded by investors.
While that’s happening, you’ll need to verify your identity by providing copies of a few documents like your driver’s license, bank statements, and pay stubs. The entire process can take anywhere from three business days to a full two weeks. So keep this in mind if your funding needs are time-sensitive.
Once You’re Approved
After your funds are sent directly to your bank account, you start making monthly payments. You should be aware of a few different fees you could incur. First, there is a $15 unsuccessful payment fee for any payment that is returned. Second, you can also be fined for late payments.
A late payment fee is charged after your payment is 15 days overdue. The amount is either 5% of the amount due or $15, whichever is more. There’s also a $15 check processing fee each time you pay by check. Most of these fees are typical of most lenders (except for the check processing fees), although the exact amounts vary. There are no prepayment penalties.
Finally, take care to keep your account up to date. If it goes to a third-party collection agency, you could be responsible for a collection fee of up to 33% of all sums collected on a claim. Peerform does report payments to TransUnion, so you can improve your credit history by making on-time payments.
Peerform Special Features
Peerform prides itself on focusing on near-prime borrowers with poor credit rather than prime borrowers with excellent credit. The P2P lender can better judge your creditworthiness by using a unique algorithm rather than relying solely on your credit score.
While many lenders use a top-down approach starting with your credit score, Peerform looks at many factors to determine whether you’re statistically likely to repay the loan. This is how they successfully select qualified borrowers with poor or fair credit.
Peerform got its start in 2010 and was founded by former Wall Street executives. The goal was to create a place where individuals could receive access to credit while taking advantage of low interest rates. Banks weren’t lending due to the financial crisis, so Peerform helped fill a gap in non-traditional lending.
Peerform has been making personal loans consistently since 2014. However, it now focuses on acquiring institutional lenders to fund whole loans rather than individual investors spreading out their portfolios across numerous loan fractions.
One of the best ways to research online lenders is by reading third-party reviews. You can discover what actual customers are saying about them before you choose to do business with them.
Peerform currently has a Better Business Bureau (BBB) rating of A, indicating excellent customer service. They also have very few complaints. You can find more Peerform reviews at other review sites as well.
What to Know Before Getting a Peerform Personal Loan
Ready to apply for a Peerform personal loan? Follow these tips to make a sound financial decision and strengthen your chances of approval.
Take a look at your finances.
Before applying for a Peerform personal loan, get your finances in the best shape you possibly can.
That doesn’t necessarily mean you have to wait months and months for your credit score to bump up a few points. But there are some tweaks you can make now that can produce quick results and potentially help you qualify for that loan.
First, look at your debt-to-income ratio. It might sound complicated, but it’s a quick and easy equation showing how lenders view your ability to repay a personal loan.
Start by adding up all of your monthly debt obligations (like your mortgage, car payment, student loans, and credit card minimums), then divide that number by your gross monthly income (that’s the amount you earn before taxes, health insurance, and other withholdings are taken out).
The number you get is your debt to income ratio. So if your monthly debts total $2,000 and your gross monthly pay is $5,000, then your debt to income ratio is 40% — that’s right at Peerform’s required maximum. See if you can get that number a little lower by making a lump sum payment on a credit card.
This is also a good time to check your credit report for inaccuracies and potentially even check your credit score. Order all three credit reports for free and go through them with a fine-tooth comb. You’ll have to pay to see your FICO score unless you can get them free through a credit card or other offers.
That information helps get an accurate pre-approval because you’ll need to enter your general credit score range. Some websites offer free educational credit scores but don’t use the exact algorithm used by FICO.
Get your paperwork in order.
As soon as you begin to think about applying for a personal loan, start gathering all of your important financial documents. This can help speed up the approval process, especially if you’re in a time crunch to receive the funds.
Find the best offer.
Peerform is one of the best P2P lenders for bad credit loans. But it still never hurts to ask around for the best offer. Compare different types of lenders, such as traditional financial institutions and alternative online lenders, to see what you can qualify for.
Many lenders only perform soft credit checks during the pre-approval process, so there’s no impact on your credit score. Just check to make sure that’s the case before you apply for several preapprovals.
If you already have bad credit, having your credit scores take a dip of 10 to 20 points can be a big deal. This is especially true when dealing with a lender like Peerform because your overall financial grade falls into set categories with your corresponding interest rate.
Save yourself time and money by completing those pre-approvals in a strategic manner that minimally affects your credit score.
Check out our other personal loan reviews below to continue exploring your options.