Oportun review: A personal loan lender with a controversial past

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In a Nutshell

Oportun offers personal loans ranging from $300 to $10,000. But the company came under fire in 2020 after a news investigation found it was filing a high number of lawsuits for unpaid debts during the coronavirus pandemic. In response, the company made significant changes, including implementing a cap on its interest rates for all new borrowers.

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Pros Cons
Possible quick loan funding High maximum interest rates
May qualify for a loan with limited credit history Not available in most states
Prequalification application available Larger loan amounts only available to returning customers
Recent controversy over its debt collection practices

What you need to know about an Oportun personal loan

Oportun is a lender that markets its personal loans as an alternative to expensive payday loans and title loans. Based in California, Oportun offers both unsecured and secured personal loans, with loan amounts ranging from $300 to $10,000.

You can apply for loans online, in person or over the phone and, if approved, you may receive the money quickly. Just keep in mind that the exact timing will depend on your bank.

If you’re considering using an Oportun personal loan to pay for an unexpected expense or other financial emergency, here’s what you should weigh before submitting an application.

Recent controversy over its debt collection practices

Oportun came under scrutiny in 2020 because of its debt collection practices.

An investigation by ProPublica and The Texas Tribune found that Oportun was one of the leading filers of debt lawsuits in spring 2020 during the coronavirus pandemic. Even during the pandemic, Oportun continued to file lawsuits against borrowers who fell behind on payments. The company admitted it had become the largest filer of small claims in both California and Texas.

In response, Oportun announced changes to some of its business practices. The company instituted a cap on its interest rates at 36%, dismissed all pending cases and suspended new filings.

You may qualify for a loan even if you have bad credit or no credit history

If you have poor credit or no credit history at all, it can be difficult to qualify for a personal loan.

For people with less-than-stellar credit, Oportun may be a useful option. Oportun says it looks beyond your credit scores, considering other information such as your income and personal references. Even if you’ve declared bankruptcy in the past, you still may qualify for a personal loan from Oportun.

High interest rates

While Oportun positions itself as an alternative to costly payday and title loans, it still has higher-than-average maximum interest rates on its personal loans.

Even with the new interest rate cap, its rates go well into the double digits and even exceed the average APR for credit cards. With such a high rate, you may end up paying much more than you originally borrowed, making it difficult to get out of debt.

Potentially fast loan disbursement

If you need money to cover a bill or replace a flat tire, you may need cash right away and don’t have days to wait for a check to arrive. If approved, Oportun says you may receive your money in as little as two hours. But remember, it may take longer depending on your bank.

Larger loan amounts available only to returning customers

Oportun advertises loan amounts ranging from $300 to $10,000. But not all applicants are eligible for the higher loan amounts.

Maximum loan amounts vary by state, and loans of $6,000 or more are only available to returning Oportun customers. If you’re a first-time borrower and need $6,000 to $10,000, you’ll need to work with another personal loan lender.

A closer look at Oportun personal loan  

Here’s some more information about Oportun.

  • You’ll make biweekly payments — With Oportun, repayment terms range from seven to 35 months, and you’ll make biweekly payments instead of monthly payments. Making all of your payments on time can help you build your credit.
  • You need personal references to qualify for a loan — As part of the application process, Oportun may ask you to submit up to four personal references, including friends, family members or your employer.
  • There are no prepayment penalties — Making extra payments and paying off your personal loan early is an excellent way to save money on interest charges. With Oportun, you can pay off your loan ahead of schedule without incurring prepayment penalties.
  • Secured loans available — In addition to unsecured personal loans, Oportun also offers loans that are secured by your car title. With a secured loan, you might qualify for a higher loan amount, lower APR or a longer repayment term. But if you fall behind on your payments, you risk losing your car.
  • Available only in certain states — Oportun personal loans aren’t available nationwide. Only residents of the following states are eligible for loans: Arizona, California, Florida, Idaho, Illinois, Missouri, New Jersey, New Mexico, Nevada, Texas, Utah and Wisconsin.
  • Accepts co-signers — Oportun may allow applicants to add co-signers to their loan applications, which can improve their chances of qualifying for a loan or getting more-favorable terms.

Should I apply for an Oportun personal loan?

If you’re in a bind and need money fast, you might be considering taking out a payday loan or title loan. But these loans can have extremely short repayment terms and sky-high interest rates. In fact, a typical two-week payday loan has fees that equate to an APR of nearly 400%, according to the Consumer Financial Protection Bureau.

Oportun personal loans may be more manageable since interest rates are capped and you can have months to repay your loan.

But Oportun’s loans still have higher-than-average interest rates when compared to other personal loan lenders and even credit cards. Before applying for a loan, try some other options.

  • Request a payroll advance. With a payroll cash advance, you can get a portion of your next paycheck early. You may be able to request one from your employer, but apps like Dave let you access part of your paycheck ahead of schedule.
  • Use a credit card. Even if your credit isn’t perfect, you may be eligible for a credit card with a lower APR than you’d get with Oportun. See our picks for best credit cards for people with bad credit.
  • Apply for a payday alternative loan. If you’re a member, some federal credit unions offer payday alternative loans. These small-dollar loans have interest rates capped at 28% — less than Oportun’s cap.

If you decide to apply for a personal loan with Oportun, apply for the minimum amount you need to cover your expense and create a budget and repayment plan ahead of time. Make all of your payments on time to build and maintain your credit. If possible, make extra payments to cut down on interest charges.

How to apply for a personal loan with Oportun

In most states where Oportun loans are available, you can apply online, in person or over the phone. But if you live in Idaho, Missouri or Wisconsin, you can only apply online. 

Oportun does have a prequalification application, so you can find out if you may qualify for a loan — and how much you may be able to borrow — with just a soft credit inquiry, which doesn’t affect your credit scores. If you decide to proceed with the loan application, Oportun will perform a hard credit inquiry at that time, which could lower your scores by a few points.

When you apply, Oportun will prompt you to provide several documents.

  • A valid photo ID
  • Proof of income, such as paystubs or bank statements
  • Address verification
  • Up to four personal references

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

  • Earnin: Earnin allows you to access some of your paycheck early, and it doesn’t charge mandatory interest or fees.
  • Avant: If you need to borrow more money than Oportun offers, Avant has larger personal loan maximums. 

About the author: Kat Tretina is a personal finance writer with a master’s degree in communication studies from West Chester University of Pennsylvania. Obsessed with her many side hustles, she focuses on… Read more.