Rocket Loans: A Fast But Potentially Costly Option for Personal Loans

Rocket Loans markets itself as a fast and convenient way to get a personal loan. I took an in-depth look at what they offer to help you decide if their loans are the right option for you.



Rocket Loans is an online lender owned by Rocket Companies, which also owns Quicken Loans and several other fintech brands. They promote their loans as a fast funding option with transparent fees.

In this article, I will provide an overview of Rocket Loans, outline the pros and cons of using them for a personal loan, and offer additional guidance on what to consider before borrowing.

Key Takeaways:

  • Rocket Loans offers personal loans from $2,000 to $45,000 with APRs from 9.116% to 29.99% and terms of 3 or 5 years.
  • They advertise fast funding, usually within one business day of approval, along with no hidden fees.
  • Potential downsides are high interest rates, origination fees up to 9%, and availability in only certain states.
  • Carefully compare options before deciding if their loans are right for your situation. Consider alternatives like credit cards or other lenders.

Rocket Loans Personal Loan Overview

Rocket Loans provides unsecured personal installment loans from $2,000 up to $45,000. You can use the money for almost any legal purpose, like consolidating debt, financing home improvements, covering medical bills, or funding a major purchase.

Loan Amounts

Their minimum loan amount is $2,000. The maximum you can borrow is $45,000.

Interest Rates

Your interest rate with Rocket Loans will range from 9.116% and 29.99% APR. The rate you receive depends on factors like your income, credit score, and existing debt obligations.

People with excellent credit scores can potentially qualify for APRs on the lower end of their range. But borrowers with bad credit should expect rates at the higher end or possibly not qualify at all.

Loan Terms

Rocket Loans offers terms of 3 or 5 years (36 or 60 monthly payments). Longer terms mean lower monthly payments but higher total interest costs over the life of the loan.

Origination Fees

There is an origination fee capped at 9% on Rocket Loans. This one-time fee is deducted from the approved loan amount before you receive your funds.

So if you borrow $10,000, as much as $900 would be taken out upfront to pay this fee.

Rocket Loans Pros

Here are some potential advantages of getting a personal loan with Rocket Loans:

Fast Funding

Rocket Loans promotes quick funding as one of its biggestdifferentiators.

You can complete the entire application process online, including uploading documentation and e-signing loan documents.

  • If approved, most borrowers receive the loan funds deposited in their bank account within one business day. For comparison, funding can take a week or longer with some other lenders.

The speed and convenience make Rocket Loans stand out. It’s an excellent option if you need money quickly for pressing financial needs.

Transparent Fees

Some lenders bury origination fees and other charges in the fine print. By contrast, Rocket Loans advertises “no hidden fees” upfront.

The interest rate and origination fee should be clear before you complete the application. You won’t suddenly get hit with extra surprise charges at closing.

Transparency about pricing is always good for consumers.

Flexible Borrowing Limits

Rocket Loans offers borrowers reasonable flexibility on loan sizes. Whether you need something small like $5,000 or a more substantial amount up to $45,000, they can accommodate a wide range of needs.

Having customizable loan amounts and terms lets borrowers take out an affordable personal loan suited to their situation. You can borrow just what you require – no more and no less.

No Early Repayment Fees

Some personal loan companies penalize borrowers who repay early with extra fees. But Rocket Loans allows you to pay off your balance early with no prepayment penalties.

This policy provides peace of mind in case your financial situation improves allowing you to pay the loan off faster. Additional principal payments can save significant money by reducing your total interest costs.

Rocket Loans Cons

While Rocket Loans has advantages like speed and flexibility, there are also some potential drawbacks to consider:

High Interest Rates

The biggest downside is the possibility of a very high interest rate compared to alternatives. While each applicant’s rate differs based on credit, some borrowers will end up near that upper limit of 29.99% APR.

  • That’s considerably higher than rates from banks or credit unions, which often fall below 10% APR for borrowers with good credit.
  • Online lenders sometimes offer rates competitive with Rocket Loans, occasionally even lower for the most creditworthy borrowers.

The high interest costs substantially increase your total repayment amount. Other lenders may provide cheaper financing options.

Large Origination Fee

In addition to high ongoing interest charges, the up to 9% origination fee is another major expense. In dollar terms, that could mean paying $900+ just to secure a $10,000 personal loan.

Not all lenders charge origination fees, and ones that do typically have smaller charges around 1-5% of the loan value. Paying so much in fees at closing adds to the overall borrowing expenses.

Limited Loan Amounts

While Rocket Loans’ maximum of $45,000 gives reasonable flexibility, borrowers needing larger loans won’t qualify. For instance, you may require $80,000 or more to consolidate substantial credit card balances or pay off student loans.

In cases where you need more funding, Rocket likely won’t satisfy your requirements. And even at the top end of $45,000, you would pay over $4,000 in origination fees to borrow that amount.

Not Nationwide

A final limitation is Rocket Loans currently operates in just 16 states. That makes them unavailable for many borrowers, depending on where you live.

Be sure to check if they provide personal loans in your state before applying. Otherwise, look at alternatives that offer nationwide lending if Rocket Loans isn’t available in your area.

What to Consider Before Borrowing

While Rocket Loans provides a legitimate option for getting a fast personal loan, I recommend borrowing carefully for a few reasons:

You may find lower rates elsewhere – Their interest charges can get exceptionally high for borrowers with less-than-perfect credit. Rates from traditional banks or credit unions sometimes go considerably lower.

Consider alternatives first – Other solutions like 0% credit cards, borrowing from your 401(k), or loans from family/friends may provide cheaper options in some cases.

Don’t borrow more than needed – It’s tempting to get approved for larger loans than necessary, but restraint is wise. Paying interest on excess borrowed money can become an unnecessary expense.

My advice is to evaluate your options thoroughly and resist borrowing unless truly needed. But if a personal loan is required, compare quotes from Rocket Loans and other reputable lenders before deciding where to apply.

Alternatives to Consider

Beyond Rocket Loans, here are a few other places where you may want to check rates and qualify for financing:

Banks and Credit Unions

Your local bank or credit union should offer personal loans with competitive rates, especially for borrowers with good credit. For example, local lenders often advertise rates between 6% to 12% for multi-year installment loans. Approval decisions may also emphasize your existing relationship over just your credit score.

Online Lenders

Companies like LendingClub, Prosper, BestEgg, and Lightstream operate entirely online but provide personal loans with attractive rates rivaling major financial institutions. They may offer lower costs than Rocket Loans, particularly if your credit score is high.

401(k) Loans

If your retirement savings plan allows it, borrowing from your 401(k) provides interest rates under 10% typically. It functions much like a personal loan but your payments go back into your account instead of to a lender. The limitations are paying taxes/penalties if you leave your job and missing out on potential investment returns.

Home Equity Loans

Tapping into your home equity can provide larger loan amounts than personal loans, often with lower interest too. However, your home serves as collateral, meaning it’s at risk if you default. Home equity loans also have closing costs and you’ll need sufficient equity built up already to qualify.

Credit Cards

As a final idea, credit cards with 0% intro APR offers can provide an interest-free loan lasting around 12-18 months. However, if not fully paid off before the intro period ends, you’ll pay much higher variable interest on any leftover balance. But it could buy you time to pay big expenses if used selectively.

Compare all your options before choosing the best personal loan for your situation. Mixing multiple methods above may also help optimize costs and borrowing power depending on your specific needs.


In summary, while Rocket Loans promotes ease and speed, its high interest rates and large origination fees may negatively impact some borrowers.


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