Earnest took a look at his earnings potential, savings and bill-payment habits, and a few other factors and decided he was good for a $3,000 loan at percent Annual Percentage Rate the actual yearly cost of funds over the term of a loan including any fees or additional costs associated with the transaction interest to be repaid at the rate of about $250 a month.

Earnest charges qualifying borrowers what it considers a fair rate on a loan that must be paid off in a year the loans can range in size from $1,000 to $10,000 and Earnest’s 6 percent APR would be less than half the average interest currently charged on a personal loan or credit card.

The rates charged on unsecured loans are much steeper than 6 percent.

AvantCredit charges between 26 percent and 95 percent; credit cards extract 15 percent interest rates, and Lending Club collects between 15 percent and 18 percent interest with fees between 1 percent and 5 percent.

Earnest also dispenses with a significant amount of paperwork that must be mailed to a lender during the loan application process.

Because investors believe that Earnest is going to be good at picking borrowers who repay their loans, it is able to obtain financing for those loansat a low rate.

If you think you can qualify for one its loans and you really need the money, that 6 percent rate sounds pretty low to me.