Radius Bank Personal Loans Review: Should You Apply?
You want to take out a personal loan, but you don't want to be stuck with high interest rates and borrowing fees.
That's why you're wise to compare your options.
Before you apply, learn all about these loans and compare them to the personal loan options from other lenders.
Decent Loan Sizes, But Limited Repayment Periods
Radius Personal Loans Pros & Cons
If you’re applying for a personal loan, you probably have a specific reason for applying.
Whether you’re trying to pay for a car repair or consolidating your debt, you’ll have a specific dollar amount in mind.
Your job is to find a lender that will lend you exactly the amount that you need to borrow. You don’t want to borrow more than you need and there’s no point in borrowing less than will cover the expense.
These personal loans from Radius Bank offered in partnership with Prosper is in the range from $2,000 to $35,000.
This makes it a great choice for people who need to borrow a relatively small amount of money. If you need to borrow a large amount, you’ll have to use a different lender.
Once you’ve decided how much you need to borrow, you need to decide how long you’ll need to pay the money back. This is the loan’s term.
For example, a loan with a five-year term will have 60 equal, monthly payments.
After the 60th payment, you’ll have paid the loan off. It will have taken five years.
Long-term loans cost more than short-term loans for two reasons.
The first is that they simply leave more time for interest to accrue. On top of that, long-term loans often carry higher interest rates than short-term loans. The benefit of a long-term loan is its lower monthly payment.
Short-term loans cost less because they have lower rates and interest has less time to accrue. The downside is that they require higher monthly payments.
You should try to strike a balance between a low total cost and manageable monthly payments.
Radius Bank offers just two terms to choose from. 36 months and 60 months. This is rather inflexible. Many personal lenders give you more options, making it easier to customize your loan’s term.
Prosper has a few requirements for people who are looking to borrow money.
You must meet all of the following requirements to be eligible:
- Have a FICO credit score of 640 or better
- Have a debt-to-income ratio below 50%
- Have a stated annual income greater than $0
- Have not filed bankruptcy in the previous twelve months
- Have fewer than seven credit inquiries on your report in the past six months
- Have at least three open loans on your credit report
If you’ve borrowed money from Prosper before, you must also meet two additional conditions:
- Have not had a Prosper loan charged off
- Have not been declined for a Prosper loan in the last four months due to delinquency or returned payments on a Prosper loan
If you meet all of those requirements, you’ll be able to get a loan from Prosper.
Your interest rate will vary depending on a variety of factors, such as your credit score and debt-to-income ratio.
Fees and How Long It Takes to Get the Money
When you compare different lenders, you’ll quickly find that lenders have specialties.
Some lenders offer cheap, no-fee loans. Others get the money into your account very quickly. Others specialize in offering huge maximum loans.
You should pay attention to the fees that Radius Bank charges on its personal loans.
The biggest one:
An origination fee is added to your balance when you receive the money.
The fee ranges from 2.41% - 5%.
For example, you borrow $10,000 and have $10,000 deposited to your checking account. If you are charged a 2.5% origination fee, your first bill will show a balance of $10,250. You immediately owe more than you borrowed thanks to the fee.
The good news is that there is no early repayment fee for the loan, so you won’t be penalized for paying it off ahead of schedule.
When you apply for the loan, your application can be approved in just a few days.
Disbursement of the money takes another 3-5 business days. In total, it can take a week or two before you get the money.
How to Get Approved
Once you’ve decided that you’re going to apply for a personal loan, you should do whatever you need to do to make sure your application is approved.
During the application process, you’ll be required to submit information that the lender can use to make a decision.
The information you’ll be asked to provide will often include:
- Date of birth
- Proof of identity, such as a driver’s license
- Social Security number
- Proof of income, such as bank statements or pay stubs
- Verification of employment
This is a lot of information to gather and it might seem daunting but doing this properly is very important.
If you provide incomplete or unclear information when you apply, it can affect your application’s chances of success.
At best, the process will be slowed down. In the worst case, your application will be rejected outright.
Increase Chances of Approval
Before you submit your application, you should take steps to improve your chances of getting approved for a personal loan.
Get better credit
Your credit score is a major factor that determines whether your loan application will be approved.
If your score is good, it's a sign that you pay your bills on time. If you have a poor credit score, you've had a history of missed payments and lenders will be wary of lending money to you.
Maintaining a good credit score is important because it makes borrowing money cheaper and gives you access to more loans.
Your payment history is the most important of these factors. The best way to improve your credit score is to pay every bill you receive before its due date. Just one missed or late payment can have a huge negative impact on your credit score.
The amount you owe is the second biggest factor. Avoid taking out large loans or maxing out your credit score to keep your credit healthy.
The bad news is that these two factors are also the hardest to influence in the short term.
The best short-term ways to improve your credit score are to avoid applying for new loans and to avoid using your credit cards.
Every time you apply for a loan, the credit bureaus take note of this and reduce your score by a few points. If you avoid applying for loans you don’t really need, you can avoid having your score reduced by having a lot of inquiries on your report.
Each month, your card issuers report your card balance to the credit bureaus. Showing low or no utilization makes it look like you owe less, giving your score a small bump.
Cut down your debt-to-income ratio
Your debt-to-income ratio is also a major player in most lenders’ decisions.
This ratio is the percentage of your monthly income that goes towards required bill payments.
You can calculate your debt to income ratio by dividing your monthly income by the sum of your monthly minimum payments on your debts and your rent bill. So, if you make $5,000 a month and your rent and bill payments add up to $2,500, your debt-to-income ratio is 50%.
You can improve this ratio in two ways.
The best way to improve the ratio is by paying down your existing debts. This has the additional benefit of reducing the amount you owe to your creditors, which will give your credit score a boost. That gives your application even better chances.
You can also increase your income. This can be harder to do. If you decide to do this by getting a side job, make sure the income is documented. If you get paid under the table, lenders won’t take that income into account when making a decision.
How Does It Compare?
Personal loans may come from a large variety of lenders, including banks, credit unions, online lenders, and more.
Start by comparing the interest rates offered by different loans.
You should always opt for the lowest rate assuming all of the other aspects of the loan are equal.
The other important thing to consider is whether the loan involves any fees.
Even if you get a very low rate, you might wind up paying more if the loan charges an origination fee.
Calculate the total cost of each loan before you commit.
Overall, these personal loans are middle of the road.
There’s nothing to differentiate the bank’s loans from loans offered by other banks.
The origination fee is the major downside as you may find lenders that don't charge this fee.
Many lenders offer fee-free loans, more customizable terms, or other features like interest rate discounts for automatic payments.