Borrowell is indisputably one of the biggest online fintech companies in the country. There was a time when Canadians had to fork out $20 or more every time they had to check their credit score. Thankfully, those days are rapidly receding.
Digital financial technology firms like Borrowell have since introduced products and services to save Canadians money while they keep abreast of their credit situation and overall financial health.
Is Borrowell Legit and Safe?
Borrowell is definitely legitimate and safe. Founded in 2014, they are mostly known as a digital lending company because of their personal unsecured loan offerings to Canadians up to the tune of $35,000. However, in June 2016, they further staked a claim in the fintech world by teaming up with one of Canada’s Big 3 credit bureaus: Equifax.
This partnership enabled Borrowell to provide its clients with credit monitoring services at no cost. They started with unlimited free credit score checks and added free credit reports sometime in 2018. Besides Equifax, the fin-tech outfit is backed by other huge brands like the CIBC, Capital One, MBNA, EQ Bank, National Bank of Canada, Wealthsimple, ScotiaBank and more.
Borrowell is the first fintech company in Canada to offer its clients free credit monitoring services and more than 1 million users have checked their score with them since 2016. Borrowell has a much more robust product and service lineup beyond lending and credit monitoring services. This review will answer many of the questions you have about the company.
Borrowell Financial Products and Services
As the name ‘Borrowell’ implies, the company started out strictly as a lending company and loans still remain their biggest seller. However, they have since diversified their offerings.
Borrowell Credit Monitoring Services
As stated earlier, Borrowell started offering credit score checks for free in mid-2016 and added free credit reports two years later. These services made complementary sense for their lending service.
This way intending borrowers could check the status of their financial health and make any necessary amendments, consequently raising the potential of being approved for a Borrowell loan.
Does Borrowell Use Equifax?
For their credit monitoring, Borrowell simply transmits your results directly from Equifax. Hence, the score and report you see on Borrowell are exactly the same as Equifax’s Risk Score 2.0 and the bureau’s full credit report.
What’s better is that Borrowell will update your credit score and report on a monthly basis, keeping you in the know about activities surrounding your credit profile. With other credit bureaus like TransUnion, this is a paid service.
To take advantage of their credit monitoring service, you will have to create an account on their website. It is really simple to do and can be done in 3 minutes or less. They will require simple info from you like your email address, name, date of birth and more. You won’t have to submit sensitive data like your Social Insurance Number or your credit card information.
Does Borrowell Affect Credit?
Also, checking your credit score with Borrowell is regarded as a soft inquiry. This means you will not need to worry about the check affecting your credit score or reflecting on your credit report. Obtaining your score can literally take seconds.
Borrowell’s Personal Unsecured Loans
Personal Unsecured Loans: This is undoubtedly Borrowell’s most used service. This is mainly down to the fact that their loans are unsecured, making them a much better option than traditional banks.
Naturally, the maximum loan amount you can qualify for and the interest rate attached to it depends on your creditworthiness. This is reflected by your credit history and credit score.
Depending on these two factors, Borrowell’s interest rates are fixed and start as low as 5.6% APR and can go as high as 29.19% APR.
There are only two loan terms available – 3 years and 5 years. Plus, there is no penalty fee for paying off your loan earlier.
Generally, for you to qualify for a loan from Borrowell, you must tick off the following requirements:
You must be a citizen or resident of Canada
You must not be going through bankruptcy, be in collections, filed a consumer proposal or have any related blemish on your credit history
Your credit score must be above 660 (you can check with Borrowell’s free credit score checking service)
You must own and operate a Canadian bank account, have a verifiable credit history of at least 12 months
You must be making a minimum of $20,000 annually
While applying for a Borrowell loan, you will need to verify your income by providing two Notices of Assessment or two recent pay stubs.
You will also be asked your reason for taking out the loan and will furnish them with your monthly commitment in terms of mortgage or rent. The entire process from application to approval (or rejection) can take as little as 48 hours.
Borrowell – Types of Loans
The kind of loans that you can get through Borrowell include:
1. Car loans: With Borrowell, you do not have to use your vehicle as collateral when taking out the loan. However, your interest rate will most likely be higher than that from a traditional bank or a car dealer
2. Business loans: This loan is also easier to get with Borrowell. You can take out this loan as start-up capital for your business or expand already existing business operations. However, to Borrowell, this is a personal loan and not a business loan, which means you must repay the loan regardless of how your business pans out
3. Home Improvements: Perfect for new or veteran homeowners or real estate investors who need to make emergency repairs or improvements on a residential property before they move in or put it up for sale. Thankfully, the repayment plans give you 3 to 5 years to repay the loan
4. Debt consolidation: This is the biggest reason people take out a loan with Borrowell. Borrowell’s relatively lower interest rates make them ideal for paying off all your other loans and credit cards.
Consolidating your loans and balances with Borrowell means you only have one repayment plan to worry about and at a lower interest overall. Just ensure that Borrowell’s interest rate is lower than the rates of the other loans and balances you’re trying to consolidate.
Borrowell Or Credit Karma
First of all, both of these free credit score apps are completely free to use and download from iOS and Android Play Stores.
You can find plenty of similarities between the two – Borrowell and Credit Karma. It’s also really easy to signup and get started. You’ll be able to check your credit score and reports in a matter of a few minutes.
Both these companies use Equifax to get your credit scores, though they have different algorithms to interpret and display your scores.
Now, which one is the better of the two? Borrowell or Credit Karma?
There’s no clear winner here. Both have their own advantages and disadvantages when it comes to credit score accuracy. The bottom line is you’ll for sure find two different scores when checking your Canadian credit score using both these apps.
With that said, there’s absolutely no harm in signing up for both these free services. It is completely free and safe to check your credit score and report. No, it won’t harm or lower your credit score by checking multiple times and updating your credit score as it is considered to be a soft credit enquiry, which won’t be visible to the banks or lenders.
You’ll get an overall general idea of your credit position by logging into Credit Karma or Borrowell or both of them in fact.
Borrowell App is free to use and easily available on the App Store and Google Play Store.
It hardly takes one or two minutes to signup and get started. Once done, you will immediately get to see your latest and updated credit score and report.
The scores will refresh once a week and all you have to do is, log in to the App, which is well secured and check your free credit score without having to pay anything.
The app is also regularly updated for advanced security features and overall UX functionalities. I’ve never been asked to pay anything to use Borrowell’s App features. It is easy, clean and simple to use.
Borrowell Credit Card Comparison
Every credit card is different in the way they are designed and the needs they are to meet. But sometimes, people apply for the wrong card for their particular financial situation and this usually does not end well for them.
On Borrowell’s website, there is a portal for credit cards: a comparison site where you have access to analyzing over 60 credit card products against each other.
The different kinds of cards on offer from Borrowell include balance transfer cards, rewards cards, travel cards, cash-back cards, low-interest cards and more.
Free Credit Score And Reporting Services
When you sign up with Borrowell, they also do the heavy lifting for you when it comes to deciding what kind of credit card product and card provider to go with.
They analyze your credit profile, your financial shortcomings, triumphs, and goals to determine your best options. The analysis will show you the conditions that come with each card: the annual fees, interest rates, all card features and everything else.
You can then take it from there and apply for a card from the options provided to you. Of course, you can do your own due diligence manually to confirm that Borowell’s card offers are truly your best bet.
But credit cards are not all that Borrowell compares. You can also use them to compare some of the best chequing and savings accounts available from the country’s best financial institutions and most compatible with your financial profile.
Borrowell’s comparison also extends to finding you the best insurance products for all your insurance needs, the best mortgage rates in Canada (complete with an AI-powered Mortgage Coach and a Mortgage Calculator), as well as the best competitive investment products available in the market.
Borrowell’s Blog and Credit Education
The fintech company prides itself on always dropping some financial knowledge on its users. This could be in their email inbox, or when they are using any of their products. These bits of knowledge are usually in the form of free tips to improve your credit score and creditworthiness so you can qualify for more competitive rates and premiums.
There is even a free 7-week email course from Borrowell that teaches you how to improve your credit score. Borrowell also boasts the option of a Credit Coach, powered by Artificial Intelligence, that helps you along this process of learning as well.
The company’s biggest knowledge bank is its blog/resource, known as “The Well.”
Using The Well, there are a plethora of articles from top financial heads in the company and the industry that will help you improve your overall financial well-being.
Articles on the blog address issues such as:
How to manage your financial well-being during festive periods
How to draw up a budget for the holidays
The common characteristics of people with excellent credit scores
- How to use a car loan to boost your creditworthiness
Life Insurance and how to about buying one
How to draft a will and last testament
How to go about buying your first home
And a host of other issues
Of course, there are also some articles focused on comparing specific financial product options such as credit cards, mortgage rates, financial apps and more. These comparison articles are one of the ways Borrowell generates revenue given that all of its products and services are free to use.
Here’s a fantastic video from CBC, comparing the credit scores from Credit Karma, Borrowell, Mogo etc. Do watch it – it is very informative.
Borrowell – Additional Features & Benefits
There are a few more things you should know about this fintech outfit:
1. For their loans, you will need to first be able to pay an origination fee. This will amount to anywhere from 1% – 5% of your loan amount (depending on your creditworthiness) and this percentage will be added to your loan’s APR
2. The company uses 256-bit encryption. This is the highest form of information encryption security used by most of the top banks and financial institutions in Canada to protect user information. So you won’t have to worry about your sensitive data being breached
3. Borrowell is not a non-profit, which means they make money in some way. They have a huge network of financial service providers (banks, credit bureaus, credit card providers and more). And armed with sensitive information from your credit profile, they can tailor very personalized financial product recommendations to you. Whenever you go for any of these recommendations, Borrowell gets a commission/referral fee for getting you in the door.
However, their free credit monitoring service remains free for anyone, whether you opt for any of their recommendations or not.
Before you go with Borrowell, we should tell you that they are not the only company offering these services.
There are trade-off points to consider when it comes to their competition. Names like LoanConnect and Mogo are also reputable in the online lending space and are worth considering before making your final decision.
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