LendingMate Review 2022: Is it Worth it?
Let’s face it, sometimes you might need a loan and might not have the best credit score to walk into the local branch of one of Canada’s Big Five banks and get one.
Don’t worry, though. There are tons of alternative lenders ready to pounce on your desperation and promise you a few thousand dollars even if you have bad credit and don’t qualify for a traditional bank loan
LendingMate is one such lender and offers loan products and services to residents of British Columbia and Ontario if you have a guarantor.
The private lending industry is notorious for peddling loans with astoundingly high-interest rates that could potentially bring you more debt than you had when you applied. Is this LendingMate one of those companies? Read our LendingMate review to find out.
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LendingMate Review 2022: Sign-Up Process, Borrowing Details, and More
Straight up, LendingMate is yet another private loan company offering personal loans to those with bad credit.
The company is based in Kelowna, B.C. and serves residents of B.C. and Ontario, providing relatively small loans between $2,000 and $10,000, with terms between 12 and 60 months in length.
Interest on LendingMate’s personal loans is 43% over 12 months, and though this is incredibly high, it’s not unusual.
The private personal loan industry takes on more risk by lending to those with less-than-stellar credit, so private personal lenders typically charge interest at an annual rate that’s much higher than the average bank.
For example, at a bank you can typically get a loan at 2.5% interest instead. Thankfully, by law, personal lenders are prohibited from charging more than 60% interest, including fees. However, that’s cold comfort when 43% is only 17% away.
Beyond the interest, LendingMate has another wrinkle in its business model. This one is less common than the high-interest rates.
LendingMate provides guarantor loans, which means they won’t lend to anyone who doesn’t have a guarantor. A guarantor is a friend or family member who guarantees they can make the loan payments and can hold the onus of repayment if you can’t pay back the loan.
The guarantor is evaluated alongside you as the applicant, usually with more scrutiny, since they are the ones who are ultimately responsible for paying back the loan.
LendingMate requires guarantors to be between 19 and 75 years of age, have good credit, and can make the repayments if the borrower can’t.
LendingMate also makes a point of saying you have a better chance of being approved if your guarantor owns a home. If they don’t own a home, they’ll need very strong credit.
LendingMate also insists that there are no hidden fees associated with their loans. It does come right out and say on it’s website, “We will NEVER charge for late payments, letters, early settlement, or anything else.”
“We will NEVER charge for late payments, letters, early settlement, or anything else.”
The company also says it won’t deny your loan based solely on your credit history like some lenders will.
How Does LendingMate Work?
If LendingMate’s business model sounds good to you, and you want to apply for a loan, visit their website and click “apply.”
You’ll then need to fill out an application. The application asks for traditional details like name, e-mail, phone number, Social Insurance Number (SIN), and address, along with specific loan details like how much you want and the term you’d like. You can choose increments of 36, 48, or 60 months.
Following the application process comes the disclosure statement, which is the single most important document in the whole process.
It outlines your rights and responsibilities, what they’ll charge, and under what circumstances void the agreement and cause LendingMate to pursue you for any amount owed.
For example, you will not get a loan, and your agreement will be void if you have an active bankruptcy or an active consumer proposal.
On the plus side, there are no late fees and will only charge an APR (Annual Percentage Rate) of 43%. However, there is no grace period, and payments are due on the date agreed, but you can pre-pay more of the monthly payment or the entire loan at any time as long as you let LendingMate know.
Once your application is complete, LendingMate sends a link to your guarantor that includes their application.
If you and your guarantor are both approved, LendingMate will give you both a call to finalize everything. They promise to deliver payment within 24 hours of your guarantor’s approval. To prevent fraud and make sure the guarantor is aware of the loan, they will deposit the money into your guarantor’s bank account to give to you.
After that, it’s up to you to pay back the loan in full according to the terms you’ve agreed to.
If you can’t make payments or miss them, LendingMate will first ask your guarantor for the money before taking more serious steps, such as legal action to obtain the money that you technically both owe.
Our Final Thoughts
At the end of the day, should you consider LendingMate your top choice if you live in B.C. or Ontario and need a loan? Well, like everything in life, there are pros and cons.
The first consideration is the need of a guarantor, which is a major disadvantage because asking someone to be responsible for a loan if you can’t pay it back is a difficult conversation, and no one wants a financial babysitter.
However, a guarantor might also be an advantage because it may increase your chances of qualifying for a loan you otherwise would not get if you attempted to qualify by yourself. In this case, swallowing your pride may pay off big time.
Another advantage includes the 24-hour turnaround time from qualifying to getting the money and that bad credit scores do not stop you from getting a loan.
Plus, since the disclosure statement says there are no hidden or late fees, there likely really are no hidden or late fees.
Since the loan amounts are relatively small, restricted to between $2,000 and $10,000, theoretically, they’d be easier and more realistic to be able to pay off within or well ahead of your chosen term.
Unfortunately, the drawbacks of LendingMate carry much more weight. At 43% interest, LendingMate’s own website reveals that an $8,000 loan at that interest rate paid over 36 months with a monthly payment of $398.93 will mean you will need to repay $14,361.48 just to settle the loan.
Compare that to a loan from RBC for the same amount over the same time period, with a lower annual interest rate of 2.5% at a monthly payment of $230.89, and interest costs would only be $312.08 over the life of the loan.
If you can qualify at a bank, do it. You can borrow more money at a lower interest rate over a longer period. But if you need to lend privately, other lenders offer APRs that are half as much as 43% or lower if you qualify.
Other nuisances include having to sign up for marketing emails and texts to complete your application, being e-mail stalked like you forgot something in your online cart if you don’t complete your application and, according to numerous reviews, customer service of dubious quality.
That said, if I were you, I would look elsewhere.
Frequently Asked Questions
Yes. They may have lending terms you don’t agree with or interest rates you think are too high, but they are a real company that gives out real loans to real Canadians who apply for them. Oh, and LendingMate claims that 95% of loans are approved.
Potentially, but only if you’re required to step in because the borrower missed payments or cannot pay.
If you take over the payment and you're able to pay back the loan on time and in full, your credit score should stay the same or maybe improve.
However, if you start missing payments or can’t pay back the loan at the terms agreed to, then your credit score will be negatively affected.
LendingMate charges 43% interest per annum on all its loans no matter the term or amount requested. Not ideal.