loanDepot Review

loanDepot has stopped originating personal loans, so the information below is no longer accurate. Head over to our Startup Business Loan Comparison page to find similar lenders.

Pros

• Suited for small businesses and startups
• Competitive rates
• No prepayment penalty
• Time to funding: ~3 days

Cons

• Stringent credit score requirements
• Stringent borrower qualifications
• Origination fees of 1-5%

loanDepot Overview

Touting itself as “the nation’s second largest non-bank consumer lender,” online lender loanDepot was founded in 2010 by billionaire entrepreneur Anthony Hsieh, best known for creating the online clothier Zappos. loanDepot offers a number of different loan products, including home refinance and home purchase loans. However, it’s their personal loans I’ll be focusing on in this review.

loanDepot’s personal loans are unsecured installment loans. The borrower is sent the full loan immediately upon approval, then pays down the principal + interest on a fixed monthly schedule.

loanDepot’s personal loans can be used for debt consolidation, medical expenses, vehicle purchases, and more. Most importantly for our purposes, these personal loans can be used to fund a start-up business. (If your ears perked up at hearing that, check out our primer on using a personal loan to fund a business.)

Read on to find out if loanDepot’s personal loans make sense for you.

Services Offered

loanDepot offers personal loans that, among other things, can be used for funding a start-up business.

Borrower Qualifications

The requirements for getting a personal loan from loanDepot are as follows:

To be eligible for a loanDepot personal loan, you must be 18 years of age or older (19 if you’re an Alabama or Nebraska resident), a U.S. citizen or permanent resident, have a verifiable income, a verifiable bank account, a valid email address, and meet loanDepot’s credit criteria requirements. In other words, it all comes down to the company’s assessment of your personal creditworthiness. Your business’s finances (should you have a business) are not a factor in the decision.

Note that loanDepot’s loan products are not available in West Virginia.

Terms & Fees

These are the terms and fees for loanDepot’s personal loans:

loanDepot’s unsecured personal loans have term lengths from three to five years. On the subject of interest rates, loanDepot states the following:

Your loanDepot personal loan interest rate is determined using several factors including your credit profile, payment history, and ratio of debt to income. To qualify for the lowest rates, applicants must have excellent credit.

Unfortunately for lenders, loanDepot charges an origination fee of between 1% and 5%. It’s definitely something to keep in mind if you’re applying for a loanDepot personal loan, as many competing online lenders don’t charge any origination fees. Here’s what loanDepot has to say on the matter:

Once a personal loan is approved and funded, borrowers pay an origination fee of 1% to 5% of the loan amount, depending on your loan grade. This fee is deducted from the loan proceeds, so you will not pay anything out of pocket. If you are using your loan proceeds for a specific purchase, be sure to borrow enough to cover both the origination fee and the purchase.

Thankfully, loanDepot does not charge prepayment fees. You can pay your loan back early without incurring any type of penalty.

Application Process

The application process for loanDepot’s personal loans is conducted online. Just go to loanDepot’s personal loans page and enter your desired loan amount. You’ll then be directed to state the purpose of your loan. Subsequently, you’ll enter your personal contact information and formally apply for one of loanDepot’s loan products.

If you are ultimately approved, you should receive the funds in your bank account within 2-3 business days.

loanDepot’s loans can be applied for over the phone as well.

Sales & Advertising Transparency

loanDepot's website could stand to be a bit more thorough in presenting the terms and fees associated with its loans on its website. The company has a personal loan FAQ, yet even there, they are less than fully transparent about personal loan terms and fees.

Customer Service & Technical Support

Customer service is available via email and via phone. Phone support is available Monday through Friday from 5am to 7pm PST and Saturdays from 8am to 3pm PST.

Sadly, there is no live chat support.

Negative Reviews & Complaints

I haven't come across many specific critiques of loanDepot's products or business practices from professional reviewers (though most such reviews are not specific to loanDepot's personal loans). However, after browsing loanDepot's Trustpilot page and Better Business Bureau profile, I've found a few recurring issues reported by borrowers:

• Inadequate transparency: Borrowers have noted that the relative difficulty in finding basic information like a breakdown of fees makes it more difficult to comparison shop when considering loanDepot.
• Poor communication: Some users report poor experiences with customer service and an insufficient level of guidance from the company.

In addition, 3rd-party review sites have noted that comparable lenders offer more repayment options to debt consolidation borrowers and do not charge origination fees as loanDepot does.

Positive Reviews & Testimonials

Most professional and customer reviews of loanDepot's products are actually quite positive. Some of the most widely agreed-upon positive points are:

• Competitive rates
• Good for bundling with other loanDepot loan products
• Good loan choice for people with great credit

Final Verdict

loanDepot's specialty may be home mortgages, but their personal loan products are offered at competitive rates, and the application process is relatively painless. However, the origination fee varies based on the borrower's loan grade, and the fee goes up as high as 5%. Therefore, you really have to have excellent credit to get a good deal with loanDepot's personal loans. If this fits your description and you're looking to inject some cash into your startup business, loanDepot is definitely a funding source to consider. I should mention that users have gone out of their way to praise individual loanDepot loan officers in comments posted to review sites. loanDepot seems to command a greater degree of loyalty in their borrowers than does the typical lender. Shame about the origination fees, though.

As always, be sure to comparison shop when searching for a personal loan. Only through due diligence will you discover the lender that will offer you, personally, the best rates and terms.

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