Karrot is the personal loans arm of Kabbage, an online lender based in Atlanta that focuses on small businesses. Karrot provides fast personal loans at competitive rates to borrowers with good to excellent credit who haven't got time to wait for a traditional loan or credit card application but still require competitive rates.
While most lenders take days to approve or deny a loan application, Karrot takes only minutes. Yet it still manages to keep interest rates low. This is because Karrot is built on the same underwriting analysis platform as Kabbage, which allows Karrot to confirm whether the income and cash flow reported are accurate.
Karrot's platform assigns applicants a grade based on their credit and income. Each grade comes with a specific interest rate. Although they do have to give Karrot access to their bank accounts and link their social networks to be considered, the trade-off is applicants know their interest rate and how much cash they are eligible to borrow within a few minutes.
Interest rates range from 6.44% to 27.22% APR depending on credit and income. The actual interest rates are as low as 5.73% APR. This includes a one-time, non-refundable origination fee that ranges from 1.05% to 4.75% depending on creditworthiness and whether it is a 36 or 60-month loan. The 60-month loans have a larger origination fee. Originations fees are deducted from the loan amount. For instance, if you are approved for a $10,000 loan amount and charged a 2% origination fee, you will receive $9,800.
Loan amounts range from $5,000 to $35,000. A $10,000 with a 6.44% APR will cost you $306.22 a month: a total of $1,023.92 in interest. The same loan with a 27.22% APR will cost you $409.43: a total of 4,739.48 in interest.
Karrot operates in all 50 states.
The application is short, requires little to no documentation and is performed entirely online. The application just asks how much the borrower wants to borrow, name, address, date of birth, annual income and email address. Identity, income and cash flow is confirmed by linking to applicants' social network and bank accounts.
In order to give a firm interest rate offer, Karrot only takes a soft pull of your credit history, which won't hurt your credit score. A hard pull, which could ding your credit score a little, is only performed if you agree to take the loan offer.
Karrot provides loans of up to $35,000 with terms of up to 60 months at low interest rates and is able to give a decision within a few minutes. There are no prepayment penalties or other hidden fees to worry about. The application form is short and the entire process, from applying to receiving the cash can take as little as 24 hours.