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Axos

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Axos Bank is a full-service online bank notable for its high-yield savings accounts and various banking services including personal, business, and commercial banking solutions along with investment and loan options. For the last 20 years, Axos Bank has focused on providing better value banking products through its innovative online banking platform—cutting down on costs from traditional brick and mortar offices and extending the savings to its clients.

Among its various loan options, the bank offers a streamlined personal loan service as a flexible option for clients’ short term financing needs. Personal loans differ from other loans in that they can be used for a variety of needs: debt consolidation, home improvements, medical bills, legal fees, or special occasions. Axos Bank boasts benefits such as no prepayment fees, flexible loan terms, and no collateral required.

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The Good

  • No Prepayment Fees or Penalties 
  • No Credit Impact for Prequalification 
  • Flexible Loan Terms and Fixed Rates
  • No Collateral Required
  • Funding Within Two Days of Accepted Offer

No Prepayment Fees or Penalties

Some lenders may charge a prepayment fee or penalty to incentivize borrowers to pay back the loan over the full term agreed upon so they do not lose the total amount of interest on a loan. Axos Bank does not have prepayment fees or penalties on its personal loans. If a borrower chooses to prepay on their Axos Bank personal loan, they will reduce the amount of interest saving on overall cost.

No Credit Impact for Prequalification

When potential borrowers apply for a prequalification through Axos Bank, their credit will not be lowered or impacted because it performs soft credit inquiries to determine eligibility and rates for its personal loans. Potential borrowers can be assured that they can fully compare a loan offer from Axos Bank to other personal lending companies without having their credit score impacted. 

As with any loan, credit card, or mortgage, if a borrower accepts the final loan offer from Axos Bank, it will then be reported to major credit bureaus and may affect a credit score.

Flexible Loan Terms and Fixed Rates

Axos Bank loan terms are flexible ranging from 12 to 60 months. It is common for lenders to start loan terms at 24 months. Axos Bank is unique in that its loan terms begin at just 12 months. This may be beneficial for borrowers who need access to funds and are able to pay the loan back quickly.

Personal loans from Axos Bank have fixed rates. This means that the borrower has a fixed monthly payment that will not be adjusted over the term of the loan. Fixed rates offer borrowers transparency for expectations of monthly payments and how much interest will be collected over the term of the loan.

No Collateral Required

In order to receive a loan, lenders may require collateral, such as the car in a car loan, in case of continuous defaults on payments. For personal loans, Axos Bank does not require collateral. This may, however, result in a higher Annual Percentage Yield (APY) than loans with collateral required.

Funding Within Two Days of Accepted Offer

To coincide with its emphasis on innovative banking, Axos Bank delivers funds for a personal loan into the borrower’s checking or savings account within two days of acceptance of the final offer. This enables borrowers to enact on financial needs in a timely manner.

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The Bad

  • Strict Approval Requirements
  • Origination Fees 

Strict Approval Requirements

Axos Bank has a required minimum credit score of 720. Compared to competitors, this required credit score is higher than average and may disqualify more borrowers. In addition to the minimum credit score requirement, Axos Bank also requires 2 years of well-established credit history, verifiable income, and a loan amount between $5,000 to $35,000.

Origination Fees

Axos Bank may charge an origination fee from 0-2% on its personal loans. An origination fee is a payment made when establishing a loan. It is unclear how much the origination fees are as it does not disclose how the origination fees are calculated or when they apply.

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The Bottom Line

When choosing between lending companies, it is important to consider how the APY rates, loan amount, terms, and fees fit into the parameter of your financial needs. Axos Bank is a good option for borrowers who would like the flexibility and financial benefit of prepaying the loan without any repercussions. The bank is unique in that it offers a 12-month term loan, which is on average, shorter than many loan companies. This shorter term loan may be a good option for borrowers that will be able to promptly pay back the loan. 

With Axos Bank’s more stringent prequalification requirements, such as a 720 credit score, many potential borrowers may not be approved for a loan. However, if you meet these strict requirements, it may prove to be beneficial as the bank may offer more competitive APY rates. 

We recommend reviewing origination fees with an Axos Bank representative and comparing it with other lender companies before accepting an offer. 

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