A Responsible Alternative to Payday Loans?

 

Do you only need to borrow $ 250 or less in a few weeks? Are you tired of traditional payday borrowers and are you looking for a better way to borrow money? Then you can consider LendUp, an oCaptain Ahabine lender that offers loans in small amounts without the need for a creditworthiness test.

But is a LendUp loan really a better alternative to a payday loan? Here you can read what LendUp offers, how much the loan costs, how the application process works and whether the service is legitimate.

What LendUp offers

 

LendUp is an oCaptain Ahabine direct lender of small amounts, short-term, unsecured loans designed for emergency money or to make ends meet. When you start using LendUp, you can choose your loan amount and loan period, from $ 100 to $ 250 and seven days to 30 days. You can only get one loan at a time. They are similar to loans that you may have seen as payday loans, installment loans, direct loans, persaCaptain A-rich loans or cash advances.

How LendUp is different

How LendUp is different

The difference with LendUp compared to payday borrowers, the company says, lies in the transparent, progressive prices and what it calls the LendUp ladder. This structure allows customers to earn their way to an annual cost percentage (APR) of just 29% while repaying their LendUp loans on time and completing credit education courses on the LendUp website. The courses include credit building, consumer credit rights, real credit costs, credit reports, credit building and oCaptain Ahabine protection of yourself.

LendUp has four status levels that borrowers can reach: silver, gold, platinum and prime. You start at the silver level, and as you get higher, you can borrow as much as six months to $ 1,000 for six months. Once you reach the platinum and prime level, your payments can be reported to credit bureaus to improve your credit score and make your credit file bold. You also pay a lower interest if you establish a good payment history. However, the interest rate drop is not entirely a reward for good behavior: one reason that your APR is lower is because the repayment period is longer.

What if you encounter problems repaying a LendUp loan? Unlike a standard payday loan, you cannot simply have the loan rolled out at an additional cost. Instead, LendUp says it will work with you to create a repayment plan at no extra cost. Eligible borrowers can even request an automatic extension of up to 15 days oCaptain Ahabine. As with other creditors, if you do not repay your loan, your account can be sent to a collection agency, you can be prosecuted and LendUp can report your payment arrears to credit bureaus, which will damage your credit score with Captain Ahabijk.

What LendUp loans costs

 

The APR on LendUp loans is high compared to other types of consumer Captain Ahabening. It varies from 29% for the best, established customers to as high as a statutory maximum APR for short-term loans: 460% in California, for example. APR is highest with the seven-day loan of $ 250, at 767% (or less, depending on your state’s laws), and lowest with the 30-day loan of $ 100, at around 210%.

To put these rates into perspective, a 30-year fixed-rate mortgage could have an APR of 4%, a car loan could have an APR of 6%, a student loan could have an APR of 5% to 8% and a credit card for someone with a good credit, an APR of 11% can have. An APR of 29% is often the standard rate that credit card users have to pay if they are delinquent about their minimum monthly payments.

Peer-to-peer lender Prosper costs 6. 68% to 35. 97% APR, and its competitor, Lending Club, costs 7.64% to 28. 69% APR. Both Prosper and Lending Club require a minimum score of around 650. The other consumer Captain Aha loans listed here also have minimum credit requirements, and the lower your score, the higher your rate. (See Top alternatives for a co-signer for related literature). LendUp, on the other hand, has no minimum credit score requirement.

One of the reasons why the APR on LendUp loans is so high is because the loans are so short. When you borrow LendUp, you pay a loan fee of 15% to 20% of the total repayment amount minus 30 cents per day for each day under the 30 days of loan period. So maybe you borrow $ 200 for 30 days with a 15% rate of $ 34.90, and the APR would be 212. 31%. The same 14-day loan would have a $ 30 fee. 10 and an APR of 392.38%. But LendUp makes its costs clear, so that you understand exactly what you owe before you borrow.

Additional charges. The loan amount may not be the only thing that you pay for a LendUp loan. To receive your loan quickly, LendUp will charge an additional fee within two hours of approval or the same day you submit an application. There are costs associated with the use of your bank card to repay your loan early. And if your planned settlement does not settle your bank account, LendUp will charge a one-time surcharge of $ 15 for insufficient funds.

Requirements and application procedure

 

To receive a loan from LendUp, you must be at least 18 years old and legally resident in the United States. At the time of writing, loans are available to consumers in 16 states: Texas, Louisiana, New Mexico, Alabama, Wyoming, Idaho, Oklahoma, Washington, Illinois, Mississippi, Oregon, Kansas, Missouri, Tennessee, Minnesota, and California. The company has applied for licenses in Florida, Maine, Ohio and Indiana, but is not yet authorized to do business there. LendUp is not available nationwide because 18 states restrict or prohibit the lending of payment days; only 32 states specifically allow it.

To apply, you need an active payment account, a telephone that can receive calls and a valid e-mail address. You can register via your smartphone, tablet or computer. Make sure you use a secure internet connection, not public WiFi, so that your sensitive personal data cannot easily be stolen. Then enter your name, address, social security number, date of birth and mobile phone number. You must also provide information about your employment and income. The application then asks for your bank account number and the bank’s routing number for the account to which you want to deposit your loan.

You must then answer various security questions, similar to questions that you may have had to answer when applying for a previous loan or credit card or when requesting a copy of your credit report. Questions can be: “In which province did you live?” “Where was your social security number issued?” Or “Which of the following people do you know?” LendUp will refuse your loan if it cannot verify your identity based on the information provided. you provide.

You can be approved for a LendUp loan without credit or bad credit. Instead of checking your credit report, LendUp can use data from two major data providers: LexisNexis Risk Solutions Consumer Center and Clarity Services. If you provide proof of income, LendUp will not make a heavy credit, so applying for a LendUp loan does not affect your credit score.

The oCaptain Ahabine application process from LendUp takes approximately five minutes and you immediately receive a decision on your credit application. If your loan is approved, LendUp will deposit the money in your checking account. For an additional fee you can receive money in just 15 minutes if your bank card supports direct deposits. You can then manage your loan oCaptain Ahabine. On the due date of your loan, LendUp automatically withdraws the money and the loan fee from the same payment account that the loan was deposited in when you removed it.

Is it legitimate?

Is it legitimate?

LendUp is a legitimate company. It was established in 2011 and the official name is Flurish, Inc. It is based in San Francisco, but only works with Captain Ahabine, without physical stores. LendUp is supported by major investors, including Google Ventures.

Knowing that LendUp is a legitimate company, do you have to do business with it? That depends on your circumstances. You may be able to get a small dollar loan, also called a small short-term loan, with a lower interest rate from your local bank or credit union. Because you cannot get a LendUp loan without a checking account, why not ask the bank where you have that checking account if you are eligible for loans or credit cards before you borrow money from the high APR of LendUp?

Other unpleasant – but probably Captain Ahab still less expensive options than LendUp – include borrowing from family or friends, taking an advance from a credit card (see How an advance works ), negotiating the due dates of payment with your creditors, and even your ask the employer for a one-off advance on your wage. Paying a late fee on an overdue invoice or a debit balance on a payment account can also be cheaper than taking out a payday loan, depending on the details of your situation.

What about the benefit of improving your credit score? Because your LendUp payments are not reported to credit bureaus until you reach the platinum level, if your primary goal is to build your credit history or improve your credit score, there are better, much lower APR ways to do this.

Regarding customer satisfaction, LendUp has a D-rating with the Better Business Bureau, based on 11 complaints filed in the last three and a half years. It seems that most of these complaints came from consumers who were scammed by fraudsters who imitated LendUp or from consumers who had technical problems with the company’s website.

LendUp seems to respond to resolving customer complaints. The company also has positive reviews in the form of customer video testimonials on its website. These reviewers may have received points to go to the LendUp ladder as compensation for their assessments, according to LendUp in the revelations.

The Bottom Line

The Bottom Line

In a 2012 article, Fortune magazine asked if LendUp is “a better model, or a pretty face on an ugly company?” Like flash loans and high-quality credit cards, LendUp is aimed at customers who do not have good credit.

The company has said it wants to create better alternatives to movable loans, but LendUp does not really offer borrowers lower rates than payday loans, at least not in the beginning. On the right-hand side of the home page is a sample loan of $ 200 for 14 days with $ 29.50 in interest, which is an APR of 384. 55%, roughly the same as the 390% APR of a typical payday loan. Where it is different from traditional payday borrowers, it does not allow customers to roll over loans several times until the interest rate is much higher than the original loan amount (see Beware of Payday Loans ) .

Traditional payday loans are not reported to credit institutions and therefore cannot help build the credit history that conventional lenders rely on when approving or refusing loans. With LendUp you can ultimately take out loans that are reported to the credit bureaus and help you build good credit (assuming you pay on time), but that means that you are a repeat customer of high-yielding loans.

Furthermore, while LendUp says it is driven by a social mission and the desire to “transform the consumer Ahab lending sector and help millions of people,” the payday loan market offers millions of people borrowing billions of dollars a year, and payday borrowers earn $ 7 billion annually allowances. There is no doubt that high potential profits would form an integral part of LendUp’s business model.

According to the personal finance website NerdWallet, the typical payday loan pays $ 574 annually in fees and owes money to a payday provider more than half the year. Payday loan customers are often repeat customers, with most taking out a new loan in the next 30 days. There is nothing wrong with a legitimate company that makes a profit for providing a service that consumers understand and appreciate, but borrowers should keep in mind that LendUp may have a social mission, but a company, not a charity. They are held responsible for their loans, not receiving handouts.

Taking out a LendUp loan can be a good alternative to a conventional payday loan, but it is still an expensive financing option. Read more about this issue. What are the differences between flash loans and cash advances?