MoneyLion loan review: Credit-builder loans for members

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In a Nutshell

MoneyLion is a financial services company that offers credit-builder loans to its members without a credit check. MoneyLion offers credit-builder loans at low interest rates, but you have to pay a membership fee, which adds to the overall cost of the loan.

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Pros Cons
Low APR available for credit-builder loans if you qualify Monthly membership fee
Reports to three major consumer credit bureaus Only low loan amounts offered
No hard credit inquiry required Loan funds may go to a reserve account until you pay back the loan

What you need to know about a MoneyLion credit-builder loan

Founded in 2013, MoneyLion is a financial services company that offers a membership program that includes online banking services, cash back rewards, credit-builder loans and more. You can create a MoneyLion account for free, which will give you access to a zero-fee checking account and an investment account. And with an account, you may be eligible for 0% APR for cash advances of up to $250. The upgraded Credit Builder Plus membership costs $19.99 per month and offers all of the above — plus access to the credit-builder loan.

Credit-builder loans could help you build credit if you’re having a difficult time qualifying for credit cards or other borrowing options. If you’re approved for a Credit Builder Plus membership, you can request a credit-builder loan. Based on MoneyLion’s review of your finances and linked checking account, a portion of the money may be placed in a reserve account that you can’t touch until you pay off the loan. Payments are reported to the three major consumer credit bureaus. After paying off the loan, you get the rest of the cash in a lump sum.

MoneyLion is unique because you might get immediate access to a little or even a lot of the $1,000 credit-builder loan if you’re approved. Any of the funds that aren’t deposited into your checking account go into an interest-bearing credit reserve account until your loan is paid in full. Signing up for a MoneyLion checking account is required to borrow money.

Low APR available if you qualify

MoneyLion offers credit-builder loans with interest rates that can range from 5.99% APR on the low end to 29.99% on the high end. An APR of 5.99% is low compared with rates on credit-builder loans offered by some other lenders. But you’re not guaranteed to be approved for a loan at this rate. MoneyLion says they’ll look at factors like your income to determine what APR you’ll be approved for. And don’t forget the $19.99 monthly membership fee.

Paid membership required

To apply for a credit-builder loan, you must become a Credit Builder Plus member and pay $19.99 per month. But you might be able to get part or all of your monthly membership fee offset by payouts from the Lion’s Share Loyalty Program.

In this program, MoneyLion members get rewarded for meeting certain requirements, such as logging into the app and making a certain number of purchases. Platinum is the highest Lion’s Share Loyalty Program tier. Members in the platinum tier could receive a $19.99 payout to your MoneyLion investment account — if they can meet the requirements: using the MoneyLion Visa® Debit Card to make at least 20 purchases (of $10 or more) each calendar month and logging in to the app every day of the month.

No credit check

You don’t need stellar credit scores to apply for a Credit Builder Plus membership to get access to the credit-builder loan. In fact, MoneyLion doesn’t pull your credit at all. Instead, MoneyLion reviews your primary checking account — which must meet certain criteria to qualify — to determine if you’re eligible for the loan. If you’re approved, MoneyLion will report your payments to the three major consumer credit bureaus: Equifax, Experian and TransUnion.

Near-instant funding

After reviewing your finances, MoneyLion will deposit — into an account of your choosing — the amount it agrees to give you immediate access to. Any of the funds that you don’t receive upfront are put into a reserve account until the loan is paid off.

If you’re approved for the Credit Builder Plus membership, you could get access to the upfront funds right away — based on your qualifications — if you choose to get money sent to your MoneyLion debit card or MoneyLion checking account. But it can take up to three business days to get funds deposited into a third-party checking account via ACH.

A closer look at a MoneyLion credit-builder loan

MoneyLion has a mobile app you can use to open an account and apply for Credit Builder Plus membership. Here are a few details you need to know about the credit-builder loan before applying for a membership.

  • Payments due on payday: You tell MoneyLion what your paycheck schedule is when you enroll in the Credit Builder Plus membership. Afterward, your membership and loan payments are set up according to that schedule. If you get paid biweekly, for example, your loan and membership payments will be due biweekly.
  • No prepayment penalty: You can pay off your MoneyLion credit builder loan early, and there will be no early payoff penalty fee.
  • Deferment support available: If you need to postpone a payment for some reason, MoneyLion might allow you to defer a payment if you submit an application for deferment.
  • Free credit monitoring: MoneyLion offers free credit monitoring powered by TransUnion. You’ll get a full credit report so you can review it for any potential errors or fraudulent activity.
  • Extra membership perks: The no-fee MoneyLion checking account that’s available with your account lets you earn cash back when you make purchases from participating brands.

Who a MoneyLion loan is good for

MoneyLion doesn’t perform a hard credit inquiry when you apply for its Plus membership, so it could be an option for you if you’re working on your credit or having trouble getting approved for a loan. But you shouldn’t necessarily count on this credit-builder loan to cover an emergency. It’s a relatively small sum, and some of the money may be placed in a reserve account until you pay off the loan.

On-time payments made toward the MoneyLion credit-builder loan could help you build a record of positive payment history. To cut down on your costs, consider paying off the loan early to minimize interest charges.

How to apply with MoneyLion

The MoneyLion credit-builder loan application process can be done on a desktop or through the mobile app. The first step is creating a MoneyLion account. To enroll in a MoneyLion account, you must sign up with your full name and address.

After completing this step, you can apply for Credit Builder Plus membership to request a credit-builder loan. The process includes setting up a MoneyLion checking account if you haven’t done so already. Here’s what you’ll need to complete the entire process.

  • Full name
  • Full email address
  • Social Security number
  • Home address
  • Verifiable phone number
  • Verifiable bank account that’s in good standing (at least 60 days old and has deposits that show steady income)
  • Paycheck schedule

Not sure if MoneyLion is right for you? Consider these alternatives.

  • Earnin: Earnin offers paycheck cash advances and may be a good alternative if getting access to cash is a higher priority right now than building credit.
  • Lendup: If you need money to cover a car repair, medical bills or emergency, LendUp offers funding in as little as one business day if your loan application is approved — and good credit isn’t required.