OneMain Financial offers potential for individuals looking for personal loans with less than perfect credit scores. If you need a personal loan for a family-related reason (i.e., not business or education related) and you’re worried about your credit, you may be able to qualify for one of OneMain’s options. This financial institution offers both secured and unsecured personal loans; secured loans use some form of collateral (your car, in this case) to help reassure the lender that it’s not going to be losing money when it extends credit to you.
The Basics
There’s a number of criteria to meet before you apply for a OneMain personal loan. To start, you need a minimum income level, and the company can’t accept applications from residents of the following states:
- Alaska
- Arkansas
- Connecticut
- Massachusetts
- Rhode Island
- Vermont
- Washington, D.C.
Applicants generally cannot have filed for bankruptcy and must have some sort of verifiable credit history in order to qualify. OneMain verifies that you can make the monthly payments required to pay back your loan and uses your credit score and income to determine your loan rate. Loan amounts range from $1,500 to $20,000, and the maximum you can borrow varies by your state of residence. Depending on the amount received, loan terms last 24, 36, 48, or 60 months.
OneMain Financial reviews indicate homeowners receive lower interest rates from OneMain regardless of what their credit scores are, so if you don’t own a home, you may want to look elsewhere. If you’re having trouble getting approved elsewhere, this deal may be better than what you can get through a payday lender or no-credit-check installment loan. OneMain also has more than 1,600 physical locations where you can discuss your loan in person, which gives the company a leg up on other internet lenders; aside from applying online, you can visit your local OneMain branch and apply for the loan there. Loans are funded same-day if you’re approved in person and within 3 days if you apply online, and you can cancel your loan within 7 days of receipt without penalty should you decide borrowing from OneMain isn’t the right move for you.
OneMain Loan Comparison
With the option to take out a secured personal loan and the benefit of physical locations, OneMain does have a certain appeal for some consumers in the market for a personal loan. See what you can find when you shop around with some of OneMain Financial’s competitors.
SoFi
The SoFi personal loan has some qualities that are attractive to individuals with poor credit who are considering a OneMain loan, but those positive attributes are paired with other features that may quickly exclude much of OneMain’s audience. While SoFi offers attractive rates and doesn’t have a stated credit minimum, the company generally limits itself to high income earners and is considered a highly selective lender.
With fixed rates from 5.990%–17.67% APR with auto-pay, SoFi offers a clear advantage over OneMain, and SoFi also provides loans in amounts from $5,000 to $100,000 with 32 to 7 year terms. Lenders tend to offer the better rates to the most creditworthy applicants, so it’s arguable that these excellent rates are indicative of SoFi’s selective nature. If you have low credit, low income and a short financial history, you might not want to risk the hit your credit score takes to apply for a SoFi personal loan.
Earnest
The Earnest personal loan takes factors other than credit score into account, including your income, payment history and even potentially your education. Earnest can be ideal for borrowers with a short credit history, but not with bad credit. Though the company doesn’t have an explicit credit minimum, it usually looks for applicants with scores above 700, which means an Earnest personal loan is not as competitive with OneMain for those with poor credit.
Earnest does offer more attractive rates than OneMain — including fixed rate APRs that start at 5.99% — but if you’re in a position where you’re having to consider OneMain’s interest rates in the first place, your credit score and other financial attributes may not be a good fit for Earnest.
Prosper
Prosper personal loan has its highest interest rate on par with OneMain’s, though its lowest rates are much lower, starting at 6.95% fixed APR and moving up to 35.99% fixed APR. Prosper has a minimum credit score requirement of 640, and it’s a peer-to-peer lending service that uses individual investment rather than backing from a financial institution. The low income earners with bad or poor credit to whom OneMain appeals may not have credit scores high enough to be attractive to Prosper’s investors.
Summary
If you have less than perfect credit and feel like you don’t have many options available when it comes to personal loans, OneMain offers a lot of incentives even with its potentially high rates, whether you need personal loans for debt consolidation or otherwise. One of OneMain’s loans might be an especially smart deal if you own a home and a car that you can use as collateral. Just be aware that using your car as collateral is a risk; if you can’t afford to lose your car, you shouldn’t use it as collateral for a personal loan, especially if you’re taking that loan out to do something like go on a vacation.
If you don’t own a home, you may also want to think carefully about whether the high APR is feasible. There are times when personal loans can help save consumers from financial disaster, but paying greater than 30% on a loan of several thousand dollars may turn out to be a burden. If you don’t qualify for a loan with one of OneMain’s competitors and you still need a loan, paying that high rate may feel like a relative relief.
