Rocket Loans review: Personal loans with an origination fee

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In a Nutshell

Rocket Loans, a sister company of Quicken Loans, offers online personal loans. By applying for prequalification, you can check your potential options without hurting your credit scores. The lender allows you to repay your balance early without prepayment penalties. But you need to pay an origination fee, and your repayment period is limited to either three or five years.

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Pros Cons
Check potential options without affecting credit scores by applying for prequalification Origination fee
Potentially fast funding, if approved Limited options for repayment periods
No prepayment penalties Fees for late payments or insufficient funds

What you need to know about a Rocket Loans personal loan

Rocket Loans is a sister company of Detroit-based mortgage giant Quicken Loans, which owns Rocket Mortgage. Rocket Loans is an online lender that offers personal loans between $2,000 and $45,000. The company says it aims to offer a simple, convenient and completely online experience. Its loans include origination fees.

Rocket Loans can be used for a range of expenses, including credit card debt consolidation, home improvement, medical bills, auto expenses and business costs.

Checking your options won’t affect your credit scores

Rocket Loans lets you apply for prequalification to check your options — including potential interest rates, repayment lengths and origination fees — with a soft credit inquiry, which won’t affect your credit scores. This feature can help you shop around to compare loan options before making a final decision. Note that prequalification isn’t a guarantee of approval, and you may be offered different terms after completing a full application.

An origination fee

Rocket Loans charges an origination fee of 1% to 6% on each loan it issues. This is a one-time fee that’s deducted directly from your loan funds. In other words, if you’re approved for a loan of $10,000 with a 5% origination fee, you’ll receive $9,500.

Not all personal loan lenders charge an origination fee. When you’re shopping for a personal loan, you should compare whether the lender charges an origination fee.

Potentially fast funding

Rocket Loans tries to stand out from other personal loan lenders by advertising fast funding. In particular, it offers same-day funding if you’re approved. But this option has restrictions on the amount and timing.

Though the maximum amount offered by Rocket Loans is $45,000, the same-day funding option is only available for loans of up to $25,000. You’ll also need to complete the loan process and sign a promissory note by 1 p.m. Eastern time that business day to have a chance to get the money deposited into your bank account.

Same-day funding can be a big benefit if you need access to money quickly, as long as you’re mindful of the early cut-off time. But keep in mind that depending on your bank, there may be a wait before you can access your cash.

No prepayment penalties

Rocket Loans doesn’t have prepayment penalties. In other words, the remaining balance can be repaid in full at any time without additional charges.

Without prepayment penalties, you can potentially pay off the entire loan early, saving on interest.

A closer look at Rocket Loans

If you’re thinking about applying for a personal loan from Rocket Loans, here are a few more details to consider.

  • Limited options for repayment periods: Rocket Loans offers only two loan terms: 36 months or 60 months. Compared with other options on the market, Rocket Loans’ options are fewer and shorter. If you have a different time frame in mind, you may want to shop around before making your decision.
  • Autopay discount: When you opt in to make your monthly payments with autopay, you’re eligible to receive a discount.
  • Late fee and insufficient-funds fee: There’s a $15 late fee and a $15 insufficient-funds fee per occurrence.
  • Credit matters: Rocket Loans looks at a lot of information in reviewing your eligibility, including your credit scores and reports.

Who is a Rocket Loans personal loan good for?

While you’ll typically have to go through an approval process no matter the lender, a personal loan from Rocket Loans may be right for you if you need a personal loan fast since there is the potential for a same-day loan. You can quickly find out your potential loan options with a soft credit inquiry, which doesn’t hurt your credit scores.

If you’d like to pay back your loan before your term ends, you can do so with Rocket Loans without a prepayment penalty.

Because of its origination fees, limits on the loan amount available, and inflexible repayment periods, Rocket Loans may be best for people who need no more than $45,000 and a repayment period of no more than five years.

How to apply with Rocket Loans

Rocket Loans personal loans are available to U.S. residents 18 and older — except those in Alabama and Nebraska, who need to be 19 or older. If you meet these requirements, applying should be straightforward.

You can get started with an online prequalification application by providing some basic information about yourself to check your potential rate and terms. If you want to proceed after that, you’ll need to register on the website.

Be prepared to provide the following information during the application process for prequalification:

  • Purpose of the loan
  • Whether you rent or own a home
  • Employment status
  • Personal annual income (before taxes)
  • Full name and address
  • Phone number
  • Date of birth
  • Email address
  • Social Security number

Not sure if Rocket Loans is right for you? Consider these alternatives.

About the author: Ryan Mei is passionate about data analytics and personal finance. He graduated from Dartmouth College with a degree in economics. Ryan owns and writes a personal finance blog at <… Read more.