OneMain Financial personal loan review: Considers people with lower credit scores

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In a Nutshell

OneMain Financial may consider borrowers for a personal loan even if they have lower credit scores. Even if your credit isn’t great, you might meet OneMain Financial’s criteria for a loan. But its top APR is higher than the APRs from some other lenders. On average, loans are funded quickly, but if you’re approved you’ll need to go into a branch to complete your application and close your loan.

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Pros Cons
On average, loans are funded quickly Loan process completed in branch
Considers more than just your credit scores Maximum APR is on the higher end
Rewards program

What you need to know about a OneMain Financial personal loan

OneMain Financial offers secured and unsecured loans, and considers people with a limited credit history or lower credit scores. While the application and funding process has an average turnaround of about one day, you’ll need to visit one of the lender’s roughly 1,600 branches in 44 states to finalize your loan.

Considers people across the credit score spectrum 

OneMain Financial looks at your entire financial picture — including income, expenses and loan purpose — when reviewing applicants.

OneMain Financial’s 2019 annual report shows it lends to people with a range of credit scores, and the company’s February 2019 investor presentation showed an average score of 635 for those who received an unsecured loan with the lender and 613 for those who received a secured loan.

Higher interest rates

Although OneMain Financial is willing to consider people with lower credit scores, this flexibility comes at a cost. Its starting annual percentage rates, or APR, are nearly 10 percentage points higher than many other lenders, and its maximum APR is on the higher end.

OneMain Financial’s investor presentation in February 2019 showed that the average interest rate on its unsecured personal loan in 2018 was nearly triple what the NCUA reported as the average APR on an unsecured 36-month personal loan from a bank as of December 2018.

Branch visit required

While you begin the loan process by applying for prequalification online, you’ll need to visit a OneMain branch to complete the application and close the loan.

If you like a traditional bank experience, this might be a benefit. For others, needing to visit a OneMain branch could be a hassle, especially if you don’t live in one of the 44 states where OneMain Financial has branches. But OneMain Financial estimates that 88% of Americans live within driving distance of a branch.

The good news is that funding can be pretty quick. If you’re approved for a loan, you might be able to receive funding that same day. If you choose to receive your loan by check, you can get the check at the branch during your loan closing.

Personal loan details

OneMain Financial said in its February 2019 investor report that it’s the largest branch-based personal loan lender in the U.S. Here are some other important details to know.

  • OneMain Financial offers a rewards and discount program. You can earn points that can be redeemed for merchandise, gift cards and other goodies.
  • Loan amounts range from as little as $1,500 up to $20,000 if you apply through the lender.
  • It offers loan terms of 24, 36, 48 or 60 months if you apply through the lender.
  • People commonly use a OneMain Financial loan for debt consolidation, household bills, auto-related expenses and home repairs. Its loans can’t be used to fund college or vocational education expenses, for business purposes, to buy securities or for gambling.
  • It offers both secured and unsecured personal loans. Cars, trucks, motorcycles, RVs, campers and boats can be used as collateral for a secured loan, which may allow you to qualify for a larger loan amount if you weren’t initially offered the amount you need.
  • It doesn’t charge prepayment penalty fees.
  • OneMain Financial allows co-applicants. If you’re struggling to get approved for the loan amount you need, a co-applicant could help.

Who a OneMain Financial loan is good for

OneMain Financial could be good for people who need a loan quickly but have trouble meeting other lenders’ credit requirements.

It might also be a good fit for someone who wants some choice in how long to take paying it back — loan terms range from two to five years. But keep in mind that the longer the loan term, the more interest you’re likely to pay.

Despite these benefits, OneMain Financial’s interest rates can be high. If you’re able to qualify for a loan with a lower APR elsewhere, that might be a better financial move.

How to apply with OneMain Financial

The first step of the loan process is applying for prequalification. This can be completed online in a matter of minutes and won’t affect your credit scores. Just remember that prequalification doesn’t mean you’re actually approved for a loan — it just gives you an idea if you might be approved and what the loan rates could be.

After applying for prequalification, you’ll see estimated interest rates and loan terms.

If you receive a loan offer, you’ll need to head to a OneMain Financial branch to complete the application and close the loan.

Not sure if a personal loan from OneMain Financial is right for you? Consider these alternatives.

If you aren’t sure if a loan from OneMain Financial is right for you, here are some others to consider.

  • LendingClub: A LendingClub personal loan could be a good choice for those with solid credit.
  • Citizens Bank: A Citizens Bank personal loan could be a fit for someone with good credit.

About the author: Erica Gellerman is a personal finance writer with an MBA in marketing and strategy from Duke University. She’s also the founder of The Worth Project: a weekly money newsletter you actual… Read more.