Kabbage Review: Still A Good Borrowing Option In 2020?

When you are short on cash for personal or business purposes, it can be very challenging to find someone who can readily lend you money without questions asked. It’s equally daunting to look for financial institutions you can rely on during these trying times.

But, thank heavens for companies like Kabbage, which can help you solve your financial problems solved with just a few steps with their business loans  (source: Kabbage Reviews 2020 – Kabbage Business Loan Reviews | InvestmentZen).

What is Kabbage?

Kabbage, Inc. is a financial institution founded in 2009. However, they have only started providing financial products in 2011 when the company was first launched publicly. It is widely known for providing consumer and business loans and other financial solutions for small businesses.

If time is of the essence and you want to know your fate right away, Kabbage can do exactly just that. That’s because, when other companies boast of a 24-hour to a few days processing, you can dance your way to the bank within minutes with Kabbage.

Another plus factor with Kabbage is that it is one of the new-age financial institutions that doesn’t impose charges upfront. You also don’t needlessly have to be at the mercy of loan underwriters or credit risk managers. Your fate will be based entirely on how the AI accurately computes the way you manage your finances.

But nothing comes easy without a price, right? The catch is that it charges high monthly interest rates, which could be anywhere between 1% and 13.5%.

A 4-month loan repayment could have an effective interest rate of 204%. As compared to some lenders who offer around 170% to 175% interest, Kabbage’s interest rates are significantly higher. You can just charge the difference to convenience.

If you plan to pay your obligation in advance to save some fees, you’ll be disappointed to know that it doesn’t work that way with Kabbage. The company’s loan scheme is front-loaded, so this is not possible. It would be better to invest somewhere else in the meantime to maximize the cost of your money while waiting for your due date.

For example, its six and 12-month terms do not have prepayment penalties. The only exception for this is for one month, where you will still have to pay for a whole month’s interest even if you pay the entire loan within a week.

The prepayment penalty starts from the 18-month term loan. This means that you would have to pay the interest for the entire loan term even when you pay in advance.

Why Choose Kabbage in 2020?

Kabbage offers from a minimum of $2,000 up to $250k loan, which can be a pretty easy and straightforward process. What’s cool is that it is one of the few lenders that take advantage of the latest technology to facilitate and expedite the approval process.

This makes you get the money you need faster compared to the manual process. In fact, it’s possible to qualify for any of its loan products within 10 minutes, with terms ranging from six months to a year or longer, if qualified. The higher the loan, the longer the required term of repayment.

Kabbage processes your credit line application by linking to your merchant or bank accounts to study your capacity to pay through your cash flow. By the power of the artificial intelligence (AI) it employs in the process, it can decide the amount it wants to lend to you based on its understanding of your financial liquidity in a swift manner using algorithms.

Requirements

To qualify in the business category for a single credit line, you must have been in the business for at least a year. For two credit lines, other financial institutions would normally require you be in the business for two to three years and revenue of between $100k and $200k.

In Kabbage’s case, you can still avail of more than one credit line for whatever purpose as long as you have a revenue of at least $50,000 a year. An alternative would be an average of $4,200 per month for the last three months prior to the loan application is required. Just the same, you just need to be operational for at least a year.

Another good thing is that there will be no fees required to apply for the credit lines. The only time you need to pay is when you are already extended a loan where the monthly amortizations and interests are expected to be paid on time.

With this, it’s evident that among the financial lenders out there in 2020, it is easiest to qualify for loans on Kabbage.

Parting Words

Moneylenders like Kabbage have long been stereotyped as loan sharks who are out there lurking around, waiting for the chance to take advantage of one’s financial difficulties. But when you think about these institutions’ cost of doing business, the exceptionally high rate of delinquency, and the effort to make the service more efficient and more accessible for all, these are more than enough to cut these companies some slack.

If and when the time comes when you’re in a tough situation where your personal or business goals are on the line, think that there’s someone who can be your life-saver. But this is only possible if you have an open mind that they’re a business after all and that you or your business is not a charity case.

Adam Hansen