LendUp loan review: A payday loan alternative with multiple repayment options

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In a Nutshell

LendUp offers single-payment and installment loans and will consider people with less-than-ideal credit. But in some cases, LendUp’s APRs can be very high, which could make them even more costly than payday loans.

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Pros Cons
Multiple payment options Loans carry high APRs
An incentive program to get larger loans at lower APRs Need an active checking account
Not available in all states

What you need to know about a LendUp loan

LendUp is an online lender that offers unsecured loans starting at $100. The company offers two distinct products: single-payment loans, which are similar to payday loans and have a maximum amount of $255-$300, and installment loans, which have a maximum of $400.

LendUp says it considers people with bad credit or no credit — but the lender still considers several factors, including your source of income, when you apply.

LendUp loans are available in California, Louisiana, Mississippi, Missouri,  Tennessee, Texas and Wisconsin. Take note that the maximum loan amount you can borrow will depend on your state laws, eligibility and other factors.

Here are some things to keep in mind before you apply for a LendUp loan.

High APRs

LendUp touts itself as an alternative to payday loans because of its fee transparency and interest rates.

But though LendUp offers an incentive program known as the “LendUp Ladder,” some annual percentage rates can surpass double digits. The rates for some of the lender’s single-payment loans can even exceed the costs of some payday loans, which can serve up fees equivalent to an APR of around 400%, according to the Consumer Financial Protection Bureau.

If you have good credit, you may want to find a lender offering lower interest rates.

LendUp Ladder

The LendUp Ladder is a program that incentivizes people to earn points and progress to higher tiers within the program — which is what LendUp refers to as “climbing the ladder” — and then get rewarded with larger loans with lower interest rates. LendUp borrowers are rewarded points for tasks that include making on-time payments and taking LendUp’s financial education courses.

The ladder has up to three levels (Silver, Gold and Platinum), and credit reporting is offered only under certain circumstances at the Platinum level. As you earn points and get to the top tier, it could help to improve your credit scores if you make payments on time.

This program is offered in California, Louisiana, Mississippi, Missouri, Tennessee, Texas and Wisconsin.

Multiple payment options

LendUp loan terms can range from seven to 31 days for single-payment loans or up to four months for installment loans. The exact terms depend on the amount you borrow and where you live.

If you take out a LendUp loan, you’ll have multiple payment options. You can make your loan payments via automatic withdrawals from an active checking account, a debit card transaction, a personal check or MoneyGram.

Additional fees may apply depending on your repayment method.

A closer look at LendUp loans

LendUp has a mission to “provide anyone with a path to better financial health,” according to its website. Here are a few other details you should know about LendUp loans.

  • Potentially fast funding — If you’re approved for a LendUp loan by 5 p.m. PT Monday through Friday, your funds may be electronically deposited by the next business day.
  • Checking account required — To qualify for a LendUp loan, you must have a checking account that accepts electronic transfers.
  • Cash for unexpected expenses — You may want to consider LendUp if you need funding and can’t get it elsewhere.

Who a LendUp loan is good for

If you have poor credit or no credit and need an emergency loan to cover a sudden expense, LendUp may help you solve your temporary financial need.

LendUp’s single-payment loans in particular can be quite costly, so they should be used only after exhausting all other options.

And if you’re trying to build credit, LendUp’s single-payment loans aren’t a good fit, because your on-time payments aren’t reported to the three major consumer credit bureaus. So you may have a better chance to build credit or get out of debt faster with a secured credit card or a credit-building personal loan.

Can you get a small loan with bad credit?

How to apply for a loan with LendUp

If you decide that a LendUp loan is right for you, check if the lender offers loans in your state by visiting the website. If available, you can apply online for a single-payment or installment loan. You’ll start by creating an account and then entering some of your personal information.

If you’re approved, read your loan agreement thoroughly. If you sign, you may receive your funds in as little as one business day.

If a LendUp loan isn’t right for you, consider these alternatives.

  • Avant: Avant personal loans could be right for you if you need a larger loan amount and want multiple repayment options. Read our review of Avant to learn more.

About the author: Ashley Chorpenning is a personal finance writer and content creator. In addition to being a contributing writer at Credit Karma, she writes for solo entrepreneurs and Fortune 500 compani… Read more.