Should you get your next loan from BorrowersFirst? We’ll help you answer that question by reviewing who they are, what they offer & what reviewers are saying.
Fast money is hard to resist.
If you’ve hit some tough financial times and need cash, BorrowersFirst is a Texas-based website that offers loans of varying lengths, amounts, and interest rates.
They say their mission is to put borrowers first amid a maelstrom of loan companies who want to stick it to you with fees, high-interest rates, and deceptive practices.
“We use smart, secure technology to make borrowing faster, easier, less costly, and more friendly. We make it easier for consumers to connect to credit,” their website says.
Their approach seems pretty refreshing, considering how people normally would head to their bank and wade through a weeks-long process. All you need to do is offer up the loan amount you want, a reason why you need it, your email address and any pre-approval codes they may have sent you.
The process is so simple it seems too easy, and so we wanted to know how things actually work. To figure that out, we asked three big questions every consumer should ask when they come across a loan website like this:
- Who are they?
- What do they offer?
- What are other people saying about them?
The answers to these questions reveal a lot about who the company is, how good (or bad) their product is and whether or not they have a good reputation.
We hope you’ll stick with us as we go step-by-step with you to figure out what the story is behind BorrowersFirst.
Who is BorrowersFirst?
Any loans you accept from BorrowersFirst are financed by Cross River Bank, a federally insured financial institution based in Teaneck, New Jersey.
The BorrwersFirst leadership team is made of up Oehring, CEO Dave Tomlinson (formerly of Progreso Financiero and Chase), CFO Gavan Goss (formerly of Dell Financial Services), CRO Zhi Zhou (formerly of Lending Club) and a trio of vice presidents.
BorrowersFirst.com is most likely a middleman between you and Cross River Bank. The site sends the information you put into Cross River Bank, who then determines what kind of loan they can offer you.
Think of the BorrowersFirst website like the scout of an NFL team and think of yourself like a good quarterback at a big college. Scouts come to your games every Saturday. They can’t actually offer you a contract with an NFL team, but they can take your “information” (touchdowns, interceptions, yards, etc.) to the team’s decision makers.
If those decision makers like what the scout has told them, they might sign you to a contract. Likewise, if Cross River Bank thinks they can offer you a loan, they’ll sign you to a contract.
According to their site and from reviews we’ve read (more on that near the end of our article), approval time on a loan can be as quick as two days.
Those same reviews indicate that, while you apply through their website, at some point you’ll speak with a BorrowersFirst rep who will talk with you about your loan.
Now that you’ve got a good sense of who BorrowersFirst is and who is funding them, let’s talk about what they offer.
What Does BorrowersFirst Offer?
Anytime you borrow money from a friend, bank or website, you should know how much you’re getting, how long you have to pay it off, your interest rates and any fees associated with the loan. You should also know what happens if you pay late. Let’s talk about each of these areas in relation to the loans that BorrowersFirst offers.
Quick tip: The company’s loans are not available to residents of Connecticut, Hawaii, Idaho, Iowa, Maine, Mississippi, Nevada, New York, North Dakota, Tennessee, Vermont, West Virginia, Wisconsin or Wyoming.
How Much Can You Get From Them?
BorrowersFirst offers loans ranging from $2,500 to $35,000. According to their loans page, there are a few exceptions to this:
- Residents of Colorado and Georgia have to borrow at least $3,000.
- Residents of Massachusetts must borrow at least $6,000.
- Residents of Pennsylvania can’t borrow more than $25,000
How Long Do You Have to Pay Off Your Loan?
The loans you get through this website from Cross River Bank must be paid back in three years or five years.
What Are the Interest Rates You’ll Get?
BorrowersFirst’s website shows two different percentage rates on their site: interest rates (5.99% to 26.99%) and APR (7.22% and 29.99%).
These numbers are different because interest rates and APRs are different even though they might seem like the same thing.
Mortgages work like this. You’re quoted an interest rate, and after all the fees are added up, you’re given an APR. This is why BorrowersFirst quotes you an interest rate and a higher APR.
The site doesn’t explain what goes into the APR, but it does talk about an origination fee (more on that in a moment).
How do you know how much your APR will be? That’s a great question. BorrowersFirst says your APR is based on your credit scores/history/usage, loan amount, and loan term. Notice that income isn’t listed as a factor in your credit. We think this is similar to life insurance sites that require a medical exam before giving you a policy. Those insurance premiums are usually higher because they’re assuming you’re really sick.
Same thing goes for these loans, most likely. In our opinion, they don’t ask for your income because they’re assuming that you don’t make much money and/or don’t have much money.
This opinion comes from our experience reviewing lending companies and insurance companies. We’re not saying BorrowersFirst is a bad seed, but we are saying you’ll probably end up paying more interest because you aren’t reporting your income.
We can’t say for sure how high or low your interest rate will be. However, we can say that your rates will creep up as your credit scores move down. Any APR over 25% is above what you’d pay on most reputable credit cards. In fact, the current average APR on a credit card is between 13% and 15%.
If you’re in a serious jam and you need money within a month, it might do you some good to apply for a credit card instead of a loan from BorrowersFirst. There’s a decent chance you can get a lower rate than what you’ll get on this site.
And, you won’t have to worry about an origination fee, which we’ll talk about in the next section.
What Fees Are Associated With These Loans?
You’ll face two different fees with a BorrowersFirst loan: the origination fee and a trio of $15 fees.
An origination fee is a common charge that a lender makes you pay to process your loan. As Investopedia puts it, “As of 2016, the origination fee presents the primary way a lender gets paid for its services.”
In fact, they say that during the housing bubbles of the 90s and mid-2000s, lenders were charging fees as high as 4%-5%.
The origination fee on a BorrowersFirst loan is 5%. In our opinion, that’s pretty high. If you borrow $10,000, you’ll pay $500 just to get the loan. If you’ve got a decent income, you can get a credit card with a $10,000 credit line that won’t charge you an origination fee.
The fee is high enough, but it gets even higher because BorrowersFirst adds those fees to your loan balance. Instead of paying $500 up front for that $10,000 loan, you’ll have to pay interest on it for three or five years.
Here’s how that looks in real life on a loan with a 24.99% APR:
- $374.85 of interest after 36 months
- $624.75 of interest after 60 months
In our opinion, it’s just not worth it to get a loan with a 5% origination fee that’s added to your loan balance. If you end up with a five-year loan, you could pay more in interest on the origination fee ($624.75) than the origination fee itself ($500).
BorrowersFirst also says they’ll charge you $15 every time you:
- Pay more than five days late
- Pay by check
- Submit a payment that gets returned
The site claims they’re trying to make the process simple and fair, but, based on the numbers we’ve presented above, we don’t think that’s 100% true.
What Happens When You Pay Late?
We read through the fine print on BorrowersFirst’s website and found your friends or family could be on the hook for your loan payment.
If your payments are withdrawn from your bank account and a payment is rejected, BorrowersFirst will request payment up to two more times. If those attempts aren’t successful, they’ll charge the bank accounts of anyone who co-signed the loan for you.
Understand this part of their terms and conditions before you ask someone to co-sign for you, and make sure they understand this important fact, too.
According to the fine print, however, BorrowersFirst will notify you before a withdrawal takes place so you’ll have some notice (they don’t say how much notice) as to when and how much is coming out of your account.
What are people saying about BorrowersFirst?
We found three different sites that helped us understand how people feel about BorrowersFirst’s loans and customer service.
More than 170 reviewers on LendingTree.com gave BorrowersFirst 4.5 stars out of 5. Customers frequently said they got their loans quickly. However, we noticed that seven of the first 20 customer reviews had nearly identical text:
“I applied on Wednesday, got approved on Friday, received funds the following Tuesday. Excellent service, and I appreciate the rate they offered considering my low credit score. Thanks BorrowersFirst!!!”
Based on our experience, duplicate reviews mean phony reviews. We can’t say for sure that’s what’s going on here; after all, BorrowersFirst could ask satisfied customers to leave reviews on LendingTree, and then give them a pre-written review to make it easier for the customer.
We’re willing to give them the benefit of the doubt, but we’re also highly suspicious of the duplicate reviews.
After LendingTree.com, we went to personal finance website Credit Karma, who showed 18 reviews. Just over 50% of those reviews were 5 stars, while about one in three were 1 star.
Common complaints about the company were a cumbersome application process, multiple requests for identity/income verification and slow response times on loan approvals.
Our last stop was at the BorrowersFirst.com Better Business Bureau page, where records indicate that the company has had seven closed complaints over the past few years and was registered on the site in October 2015. It has an A+ rating.
One review really stuck out to us. A customer said they checked their TransUnion credit score before applying – their score was 709.
After applying for their loan, the customer got a rejection because of their credit score, according to BorrowersFirst, was 641. The customer then called TransUnion, who told him lenders have their own scoring systems.
That tells us that BorrowersFirst may be basing their loan offers on credit scores that are lower than they should be.
According to the BBB complaint, the company said they use a consumer’s FICO score to determine if they’ll hand out a loan, not the Vantage score the customer mentioned in his complaint: 709.
The customer also mentioned he had no late payments in his credit history, which makes us think the chances are pretty slim that there could have been such a huge difference between his FICO and Vantage scores.
The reason why the difference in scores isn’t just that the customer’s loan application was rejected, but also because a difference of 60 points can lead to a huge swing in interest rates. Higher interest rates can cost the consumer hundreds or thousands of dollars over the life of their loan.
The Final Word: Our Conclusions About Borr0wersFirst.com
BorrowersFirst’s claims that they “make borrowing faster, easier, less costly, and more friendly” and they make it easier for consumers to “connect with credit.” This can be really refreshing for consumers who’ve had to deal with shady lending companies.
Positive reviews about the company echo these claims: loans were processed quickly and it was, in general, a painless process.
However, we noticed that there were nearly identical reviews on BorrowersFirst’s Lending Tree review page. While we can’t say for certain that these reviews are phony, they do raise some red flags.
In terms of the actual nuts and bolts of the loans the company offers, remember that your interest rate and APR are two different things. Your APR will be higher because it includes fees and other costs that aren’t mentioned (as far as we could find) on their site.
If you decide to go with BorrowersFirst, call them and ask them why the APR is higher than the interest rate. Make sure you get a clear explanation and are aware of all fees.
Also, remember that your 5% origination fee will be rolled into your loan and could cost you as much in interest as the actual fee.
If you don’t feel like BorrowersFirst is a good fit for you, don’t be afraid to go to your local bank or credit union and talk with a banker face-to-face.
Our last bit of advice has to do with budgeting. We know that keeping track of your finances can be difficult. Emergencies come up, out of the blue, and put you in a really tough spot.
Our experience has been that creating a budget helps you gain control of your finances so that you can absorb the blow of an unforeseen financial emergency. Click here to read our article on the benefits of budgeting.