Take a Look Around Before You Consider These High-Cost Loans
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OppLoans, a Chicago-based online lender, offers personal loans to people with bad credit as an alternative to costly payday loans. OppLoans does not check a borrower’s credit score with major credit bureaus. Instead, OppLoans examines alternative data and the borrower’s employment and income details.
Approved applicants can borrow anywhere from $500 to $4,000. These loans are expensive and have short repayment terms. OppLoans, along with its partners FinWise Bank (First Electronic Bank) are listed on the National Consumer Law Center’s High-Cost Rent-a-Bank loan Watch List. The NCLC states that rent-a-bank schemes, which predatory lenders use in order to circumvent state interest rate limits, are a questionable practice.
How to Get a Personal Loan?
Personal loans are a popular option to quickly borrow money when you have the need. Experian reports that there were 42.7 millions personal loan accounts open in the U.S., with an average balance $16,458. This type of loan offers a lot of flexibility but it is important to understand how they work before you take one out.
Personal loans allow you to borrow money in one lump sum and then repay it over time. Usually, this is between one and five years. These loans are either secured or unsecure. Unsecured loans do not require collateral. Secured loans offer lower interest rates but you risk losing your collateral if payments are not on time.
Alternatives to Personal Loans
Although personal loans are a great way to pay for large expenses, they’re not your only option. Personal loans can be used in lieu of personal loans.
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Home equity loans, home equity lines of credit (HELOC), and cash-out refinances are all options. These options allow homeowners to borrow money with their home equity as collateral. You may be eligible for lower rates with these loans than you would with an unsecured personal loan. Each option has its pros and cons that you need to be aware of.
A balance transfer credit card. A balance transfer credit card is a good choice if you are looking to consolidate multiple debts. They typically offer a 0% introductory APR for a period of time, usually between 15 and 18 months. It is important to verify the fees before you apply for a balance transfer credit cards. You could lose any savings you make by using the balance transfer credit card. Plan to repay the card by the end of the promotional period. Otherwise, interest will accrue on any balance remaining.
Personal savings. Consider saving for the future if you don’t have the cash right away. Because you don’t have to pay interest or fees, paying cash is more affordable than borrowing money.
Credit counseling. Credit counseling. Although they won’t lend you money, they can offer advice and direct you to resources that will help you get your finances in order. If you need assistance managing your finances or getting out of debt, many non-profit organizations offer free or very low-cost credit counseling services.
Do You Qualify for an OppLoans Loan
- OppLoans loans are not recommended
Personal loans from OppLoans come with high interest rates, up to 199%, and very short terms. They can quickly become expensive. OppLoans is marketed as an alternative to payday loans. It’s true that the loans have longer terms, higher loan amounts and may be subject to lower interest rates than traditional payday loans. It’s not a good choice for personal loans, however. OppLoans’ APRs exceed 36%, which is considered predatory by the NCLC. These loans should be considered as an option only if there is no alternative source of funding. Consider other personal loan lenders offering lower APRs.
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- Alternatives to an OppLoans Loan
If you are looking for money and have bad credit, there are other options than the OppLoans personal loans. These are some options to consider:
Personal loans for people with bad credit. Personal loans are available to people with bad credit, with lower APRs. Ask the lender if they offer a prequalification before you apply. This allows you to compare terms and find out the best rate.
How do you qualify for an OppLoans loan?
OppLoans will not pull credit scores from any of the major credit bureaus. However, it will check credit data provided by Experian and Clarity Services. This agency collects information about consumers with low credit scores. OppLoans will examine your application to determine if you are eligible for a loan.
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Your employment status. If you are receiving income from the government, you may be required to show proof of employment. Income details. OppLoans checks that you make at least $1,500 per calendar month before taxes. You will also receive direct deposits (except for New Mexico residents).
