Pave personal loans target Millennials because they focus more on earning potential than credit history. While borrowers may use funds for anything, the company promotes personal improvement. This can include any number of expenses, such as taking a class, paying off credit card debt, paying for your wedding, or relocating.
Pave Personal Loans
Education loans come with a number of perks that make a Pave loan a competitive option for anyone ready to take a course. Take a look at those details and more in our Pave review, then compare other loan products to find your best choice.
Pave offers personal loans ranging between $3,000 and $25,000. The APR ranges between 7.18% to 24.31%, which include origination fees anywhere from 1% to 6% of the loan amount. All loans come with fixed interest rates so you don’t have to worry about your monthly payment fluctuating over time. Pave loans are relatively short-term, with payment options only extending between 2 and 3 years.
There are no restrictions on what the loan funds are used for, although you do have to disclose the intended use during the application process. Although Pave does charge origination fees on each loan, there is no prepayment penalty for paying off the balance ahead of schedule.
Pave loans are not currently available in the following states: Arizona, Connecticut, Maine, Massachusetts, Nebraska, Nevada, North Dakota, Oregon, Pennsylvania, Tennessee, Vermont, West Virginia, Wisconsin, and Wyoming. Other lending restrictions may apply depending on where you live.
Pave focuses on young borrowers, but there is no age restriction, as long as you’re at least 18 years old. The minimum required credit score is 660, but Pave considers both FICO and Vantage scores during the underwriting process.
They also factor in a good deal of other information when assessing your application. They don’t only look at your credit score. They also look at what you’re using the loan for, what kind of work history you have, your current job, your level of education, and your future earning potential.
The process is quite customized, offering more flexibility in who is approved. For instance, if you’re using your Pave personal loan to take a course that is likely to increase your earnings level, then you could qualify for a better rate.
Because Pave focuses on these alternative data points, they don’t have set requirements for many other traditional characteristics. For instance, there are no minimums for gross income or length of credit history, nor is there a maximum debt to income ratio.
When you’re ready to compare rates, Pave provides pre-approval offers in a matter of minutes. After completing the initial questionnaire, Pave only performs a soft pull on your credit report so your score isn’t affected. Once you move forward and go through with the formal application process, they’ll perform a hard check which does show up on your credit report.
When you’re ready to complete your personal loan application, you’ll be required to submit several supporting documents to confirm your personal and financial information. You must provide a copy of your photo ID and proof of citizenship (either a copy of your driver’s license and birth certificate or just a copy of your passport).
They also want your two most recent paystubs and bank statements verifying your assets. If your loan funds are being used to pay for a course, you must also submit a copy of your acceptance letter.
Once Pave verifies all of your information, you’ll need to get on an introductory call before funds are transferred to your bank account. The entire process from start to finish can be completed within just a few business days.
Money can be funded as quickly as the next business day once you’ve been approved and completed your call. If your application is denied, you may apply for a loan again after 30 days.
Once You’re Approved
Pave requires that you go through the onboarding phone call within 30 days of accepting your personal loan terms. If you don’t, your proposed terms expire and you’ll have to get new terms that might not be the same.
After your loan is funded, you’ll receive an electronic statement each month. A nice perk is that you can customize your own due date so you can pay at the most convenient time during the month.
To pay your bill, you can either automatically transfer funds from your bank account or send in a check by mail (although there is a $2 processing fee for each check). There are also fees involved if you’re more than 15 days late in paying your bill. The cost is either 5% of the bill or $15, whichever amount is higher. There’s also a return fee of $15 if a payment is returned.
Borrowers aren’t restricted to taking out just one personal loan through Pave. Once you’ve paid down 50% or more of your original loan, you may apply for another loan. Another unique feature of a Pave loan is the ability to defer up to your first three payments if the funds are being used for an educational course.
You won’t have to make payments for the first three months, but interest will accrue and be added to your principal amount. After that, your monthly payment reflects both the original principal and the interest from the deferred periods. This feature makes Pave personal loans an attractive option for a part-time student or young professional looking to move up in the ranks.
When Pave started out in 2012, it aimed to loan money based on an income sharing model. Rather than paying a fixed interest rate, the borrower would instead repay the loan through a percentage of his or her future income. That model was deemed too complicated, however, and the company set to differentiate itself by focusing on borrowers with little to no credit history.
Now offering traditional personal loans, Pave’s underwriting process is ideal for young borrowers with thin credit, or even ex-patriates who have not held an American bank account for some time.
What to Consider When Applying for a Pave Personal Loan
Whenever you think about taking out a loan, it’s important to perform your due diligence on both the lender and your own finances. Ask yourself these questions before you apply for a Pave loan or any other personal loan.
What is the best loan product for my needs?
The best loan product for your financial needs really depends on what you’re using the money for. If you want to consolidate your credit card debt and get a lower interest rate, your best options are either a 0% balance transfer to another credit card or a personal loan.
A balance transfer requires a high credit score and the introductory rate period typically only lasts six months to a year. If you can’t pay off your debt within that time frame, you run the risk of paying even more interest than before. With a personal loan, you can spread out those payments at a lower interest over a longer period of time.
Pave only offers loan terms of two or three years, so whatever you’re using the funds for, you’ll need to pay it off rather aggressively. On the plus side, shorter loan terms usually mean lower interest paid in the long run. Just make sure you’re getting the best rates and can afford your payments each month.
Are the monthly payments worth it?
Again, the answer to this question largely depends on your personal situation. Pave loans can be used towards anything. If you’re trying to push ahead in your career with a new certification or degree, then you could very well benefit from earning more than you would have without taking the class (and the loan).
If you intend to use the funds for a non-necessity, such as a vacation, you might get sick of making those monthly payments two years after you actually took your trip. Think about both your short-term and long-term goals and then decide how your finances stack up against them.
How can I get the best rates?
When applying for a Pave loan, you’ll get the best rates by doing a few different things. As with any personal loan, a high credit score helps. See if there are any negative items you can eliminate, like asking a creditor to remove a one-time late payment through a goodwill letter.
You might also improve your payment history and use of credit by regularly charging a few things to your credit card and then promptly paying off the balance each and every month.
Another way to get the best Pave loan rate is to use the loan for something that will add value to your earnings or assets, like taking a class or relocating for a better job. The more money you make, the better your interest rate will be.
If you receive an end of year bonus or will have a stronger tax return in the new year, it may be worth waiting until you can report that income on your loan application. It never hurts to call customer service and ask what you can do to get the best interest rates possible.