OneMain Financial personal loan review: A good option for less-than-perfect credit

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In a Nutshell

OneMain Financial offers unsecured and secured loans to people with less-than-perfect credit. But its interest rates are relatively high, and an in-person visit to a local branch is required.

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Pros

Cons

Offers unsecured and secured personal loans

Charges an origination fee

Small loan amounts available

Larger loan amounts require lien on automobile

Rates are higher than you’ll find with some other personal loan lenders


What you need to know about a OneMain Financial personal loan

OneMain Financial is a large lender that offers personal loans to people with bad to fair credit. Its loans come with fixed rates and terms that range between 24 and 60 months. 

You may be able to receive loan funds the same day as approval for a OneMain Financial personal loan, but you’ll first need to meet with a loan specialist at a local branch to complete the application process.

Offers unsecured and secured loans

You can choose from two types of loans: unsecured and secured. An unsecured loan doesn’t require any collateral. But if you take out a secured loan, you’ll need to secure it to an asset like your car. While a secured loan may be easier to get, OneMain may take your car if you default on your loan.

Small loan amounts available

OneMain Financial personal loans range from $1,500 to $20,000. That’s good news if you need a bit of cash to cover a smaller expense like a minor car repair or medical procedure. But if you need to borrow more money, you’ll have to look elsewhere.

Larger loan amounts require a lien on your automobile

For larger loan amounts, OneMain requires that you use your car as collateral. Your car can’t be more than 10 years old, and you must have the title in your name and a valid insurance policy.

These secured loans are similar to high-cost title loans, so be wary of pledging your vehicle — which you could lose if you fail to make minimum monthly payments on time and default on the loan — without being very confident you can pay back your loan.

Relatively high interest rates

Even though you might not need the best credit scores to qualify for a OneMain Financial personal loan, you may face a higher interest rate. Compared to other personal loan lenders, OneMain’s rates are relatively high.

OneMain also charges an origination fee, which, depending where you live, may be a flat amount or a percentage of your loan amount. OneMain doesn’t specify on its website what that range could be.

Although personal loans from OneMain Financial may cost you less than a title loan, you should still shop around and compare other options if possible.

A closer look at a OneMain Financial personal loan  

If you’re considering a OneMain Financial personal loan, here are a few more details to think about.

  • Prequalification option — You can start the application process online to see if you prequalify. The prequalification will come with a soft credit inquiry, which won’t affect your credit. But keep in mind that your final loan terms and rate could change after you officially apply.
  • Fees — If you don’t make your payments on time, you may be on the hook for late fees. OneMain also may charge an insufficient funds fee if there’s not enough money in your account to cover your payments.
  • Nationwide branch network — There are about 1,500 OneMain branches across 44 states. That’s nice to know if you prefer in-person service.
  • Cancellation policy — If you take out a OneMain Financial personal loan and decide you no longer want it, you’ll have seven calendar days to cancel and return your funds.
  • Joint applications accepted — OneMain accepts joint applications, so if you apply with someone who has good credit, you may have a better shot of approval or getting a better rate.

Who is a OneMain Financial loan good for?

If you have less-than-perfect credit and have found it difficult to get approved for other personal loans, a OneMain Financial loan may be a good fit. You may be able to take out a secured loan that’s backed by your car and potentially receive more-favorable terms.

A OneMain Financial loan also may make sense if you only need to borrow a small amount of money and like in-person service.

But if you have good credit, you’ll likely find better rates elsewhere. And if you aren’t sure you can afford to make loan repayments, it’s better not to risk an important piece of property like your car.

How to apply with OneMain Financial

Even if you don’t have stellar credit, you can apply for a OneMain Financial personal loan. But if you’re an active-duty military member or a dependent of one, you won’t be eligible for a secured loan because of the Military Lending Act, which doesn’t allow vehicles to be used as collateral.

To begin the application process, you can apply to prequalify online. OneMain will ask you to provide information, including …

  • Your name, address and email
  • Desired loan amount
  • The last four digits of your Social Security number
  • Income and source of income

If you decide to move forward and apply officially, you’ll need to fill out the online application and agree to a hard credit inquiry. If you receive loan approval, you’ll need to visit a branch to meet with a loan specialist to show proof of income and verify your information.

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

  • Oportun personal loan: If you don’t have a credit history and would like to build one, an Opportun personal loan is an option to explore.
  • LendingPoint personal loan: If you’d like to complete the entire loan process online, LendingPoint may be a solid choice.

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA… Read more.