Josephine Norton
NerdWallet is a website that provides financial product reviews and comparisons. It covers a range of financial products, including personal loans, auto loans, mortgages, and insurance. While NerdWallet does not directly offer loans, it partners with lenders to provide users with information about different loan options and allows them to compare loan rates and terms. The website generates revenue through advertising partnerships with lenders, but claims that its opinions and ratings are not influenced by these partnerships.
| Characteristics | Values |
|---|---|
| Nature of the company | NerdWallet is a financial comparison website that helps users compare and choose the best loan options for them |
| Loan types | Personal loans, auto loans, mortgage loans, student loans, and more |
| Lenders | LightStream, SoFi, LendingClub, and others |
| Loan amounts | Up to $100,000 for personal loans; loan amounts vary for other types |
| APR | As low as 5.99% for qualified borrowers |
| Credit score requirement | Varies by lender; SoFi caters to good- and excellent-credit borrowers with an average credit score of 745 |
| Fees | Origination fees ranging from 0.00% to 10% of the loan amount; late fees |
| Pre-qualification | Soft credit checks to pre-qualify |
| Application process | Online |
| Speed of funding | As fast as same-day or next-day funding |
| Repayment | Flexible payment options; repayment terms of up to 20 years for certain loans |
What You'll Learn
NerdWallet's personal loan lenders
NerdWallet does not make loans; instead, it helps borrowers find the best personal loan lenders. The company has rated and reviewed personal loans from over 35 financial institutions, including banks, credit unions, and online lenders. NerdWallet collects over 50 data points from each lender and cross-references them with company websites, earnings reports, and other public documents to confirm product details.
NerdWallet's star ratings are awarded based on consumer-friendly features, such as soft credit checks for pre-qualification, competitive interest rates, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, and financial education. The ratings also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau.
Some of the top personal loan lenders, according to NerdWallet, include SoFi, LightStream, and Discover. SoFi caters to borrowers with good to excellent credit, with an average borrower credit score of 745. LightStream offers loans of up to $100,000, which are commonly used for home improvement projects, and Discover is popular for debt consolidation, as it sends loan proceeds directly to creditors.
NerdWallet also provides resources to help borrowers understand personal loans better. For example, they provide information on average personal loan APRs, how to improve credit scores, and how to pre-qualify for loans. Additionally, they offer guidance on choosing the best loan lenders for specific purposes, such as home improvement projects or debt consolidation.
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NerdWallet's mortgage rates
NerdWallet does not make loans itself. However, it does provide a service that allows users to compare mortgage rates and loans from different lenders. The company's advertising partners include mortgage lenders, but NerdWallet asserts that this does not influence their lender star ratings or the order in which lenders are listed on the page.
Mortgage rates fluctuate daily, influenced by economic factors such as inflation expectations, job creation, and overall economic growth. When the economy strengthens, rates tend to rise, and when it weakens, rates tend to fall. As a result, homebuyers may find it frustrating to try and time the market for the best rates. Additionally, the generic interest rates advertised by lenders are not customized to individual circumstances and are subject to change.
NerdWallet provides a calculator to estimate the maximum loan amount users are likely to qualify for, along with their potential monthly payments. The company also offers resources and guides to help users navigate the process of buying or selling a home and managing a mortgage.
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NerdWallet's auto loans
NerdWallet does not make loans itself. Instead, it provides a service that helps users find the right loan for their needs.
NerdWallet suggests putting down at least 20% of a new car's purchase price or 10% for a used car. It also recommends checking credit reports and scores before applying for an auto loan, as credit history can affect interest rates and loan approval. The website offers a free credit score and report updated weekly using TransUnion data.
In addition to its auto loan calculator, NerdWallet also provides a car lease calculator to help users estimate monthly payments for leasing a car. It also offers an auto loan refinance calculator to compare current loan terms with potential refinance options.
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NerdWallet's loan pre-qualification process
NerdWallet does not make loans. Instead, it helps users compare personal loan rates from multiple lenders at once. NerdWallet's star ratings are awarded to lenders that offer consumer-friendly features, including soft credit checks to pre-qualify, competitive interest rates, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, and financial education.
NerdWallet's pre-qualification process for personal loans involves sharing some personal information to help users find a suitable loan. The proprietary system analyzes potential loans, looking for great rates and any loans the user is eligible for. The user is then either directed to a lender or given a range of options to choose from. The pre-qualification process is a preliminary step in the loan approval process, giving lenders an idea of the user's creditworthiness and the user a preview of the loan they might receive. It is important to note that pre-qualification does not guarantee a loan, and lenders will verify the user's information before final approval.
NerdWallet also provides a mortgage pre-qualification calculator to help users determine whether they qualify for a home loan and, if so, the amount they can get pre-qualified for. This tool is particularly useful for first-time homebuyers.
In addition to its loan comparison tools, NerdWallet offers resources to help users understand the loan application process, including guides on how to pick the best student loan repayment plan and how to get pre-approved for a mortgage.
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NerdWallet's loan compensation
NerdWallet does not make loans. Instead, it helps users compare loans from other financial institutions. NerdWallet's partners compensate the company, which may influence which products they review and write about. However, this does not affect their evaluations, recommendations, or advice. NerdWallet does not receive compensation for its ratings.
NerdWallet's advertising partners compensate the company when users take certain actions on their website or click to take an action on the partner's website. These partners include financial institutions that offer loans, such as personal, student, and small business loans. NerdWallet provides users with information about these loans, including loan amounts, qualification criteria, and repayment terms.
NerdWallet collects over 50 data points from each lender and cross-checks company websites, earnings reports, and other public documents to confirm product details. They may also go through a lender's pre-qualification flow and follow up with company representatives. This research forms the basis of their ratings and reviews.
NerdWallet's star ratings are based on several factors, including soft credit checks for pre-qualification, competitive interest rates, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, and financial education. They award fewer points to lenders with practices that may make loans difficult to repay, such as high annual percentage rates and inadequate assessment of consumers' ability to repay.
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Frequently asked questions
No, NerdWallet does not make loans. It is a website that allows users to compare loans from different lenders.
You can compare personal loans, auto loans, mortgage rates, and student loan repayment plans.
NerdWallet allows you to compare loans from multiple lenders at once, with no impact on your credit score. You can find loans with competitive interest rates, flexible payment options, and fast funding times.
To qualify for a loan, you typically need to be at least 18 years old, have a minimum credit score, and meet income requirements. You can use NerdWallet to pre-qualify for loans and compare different lenders' requirements.
The most common fees associated with personal loans are late fees and origination fees, which can range from 1% to 10% of the loan amount. Other fees to consider include closing costs and discount points, which can lower your interest rate.
