Vouch brings borrowers old-school, trust-based lending

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Vouch Brings Borrowers Old-School, Trust-Based Lending

So you know how they say you shouldn't borrow money from friends? Well, throw that out the window ... kind of.

Vouch is a financial company that wants to take lending "back to its roots." You know, back to the good ol' days when loans were approved because of trust and character.

And here's where your friends (and family) come in: To get a loan, you need sponsors. Sponsors are people who can vouch for you -- aha! there's the name. They're essentially saying, "Yes, this person is trustworthy and will pay you back." They can also help out by offering to pay a certain amount of money if you fail to pay back your loan.

So you're really only "borrowing" money from your friends and family if you don't pay up -- at which point you'll have to deal with some very disappointed pals.

Now, there are some rules and regulations you'll have to keep in mind:

• Borrowers must be at least 18, legal U.S. residents, current on all accounts, not in bankruptcy or foreclosure proceedings and have a FICO score of 600 or greater.

• Sponsors need to meet the same qualifications, except for the FICO score, which must be at least 580

But if you and your sponsors match all the criteria, you're on your way. So how do you sign up?

It's simple. You head over to Vouch.com and follow three steps:

1. Check your eligibility for a loan (we mentioned some of those qualifications above)

2. Get at least one sponsor (y'know, friends or family who can vouch for you)

3. Get your loan offer, which is the amount of money Vouch is willing to lend you.

Given the service is called "Vouch," you'd probably guess that whole "sponsors vouching for you" thing is very important. Well, you guessed correctly.

The more sponsors you get, the better the terms of your loan. For loans less than $1,500, more sponsors get you more money added to your loan offer. For loans more than $2,000, more sponsors get you percentage points knocked off your interest rate, so you can save more money.

So now the most important question: Is Vouch the financial service for you? Well, I'm not a financial advisor, so I'll decline to answer that question. But here are some things to keep in mind:

A writer for financial-advising-site Magnify Money says Vouch is a good choice for you if you're not afraid to share something as personal as your personal finances.

"If you'd rather stay private about financial matters, then Vouch wouldn't be the right company to get lending from."

Because things get pretty personal with Vouch. Yahoo quotes Vouch's CEO who says, "If you join as a sponsor ... you're going to get statements and you're going to know if the loan is delinquent or not."

So if the thought of your mom nagging you about that late payment terrifies you to your very core, you might want to look elsewhere. But if a little motherly motivation seems like something that would benefit you, you can get all the details -- and read the fine print -- on Vouch's website.

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