Possible Finance review: A payday loan alternative that can help you build credit

Man and woman standing outside in their garden, discussing getting a loan from Possible FinanceImage: Man and woman standing outside in their garden, discussing getting a loan from Possible Finance

In a Nutshell

Possible Finance touts its personal loans as alternatives to payday loans geared toward those with bad credit, but it’s important to know that the lender charges high interest rates. But if you’re approved for a loan, making on-time payments may help you build credit over time because Possible reports your payments to the three main consumer credit bureaus.

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Pros Cons
Can help you build credit High APRs
Only small loan amounts available Not available in most states
  Short repayment terms

What you need to know about a Possible Finance personal loan

Possible Finance offers small personal loans that it promotes as alternatives to payday loans. You’ll have to apply through its mobile app, and you might qualify for a loan even if you have bad credit. But that also means you’ll pay high interest rates, so you should shop around and consider other options before you take out a loan through Possible Finance.

High interest rates

Possible Finance considers itself an alternative to payday lenders and claims that “you’re more than a number” and won’t check your FICO score when you apply for a loan. But its interest rates are still high — in the triple digits. So even though its APRs may be lower than a typical payday loan, they’ll still cost you.

It’s also important to keep in mind that Possible Finance offers only short-term installment loans — you’ll have to pay them back in just two months. That may be a longer repayment period than with a payday loan, but you may want to consider a payday advance app like Earnin if you need only a small amount for an emergency expense.

Can help you build credit

Possible Finance’s biggest selling feature is probably that it reports your payments to the three major credit bureaus. So if you’re approved for one of its loans and consistently make payments on time and in full, you can build credit history over time. (On the flip side, a late payment or paying less than you owe could damage your credit.)

Small loan amounts available

If you need a small loan for an emergency situation like a car repair or other unexpected expense, Possible Finance typically offers loans up to $500, though you may be able to qualify for up to $750 if you’re a returning customer applying on Credit Karma.

That can be helpful if you need a small amount to tide you over and you want a month or two to repay your loan. Keep in mind that you can pay off your loan early without a prepayment penalty.

A closer look at Possible Finance personal loans

Here are a few more details to consider before applying with Possible Finance.

  • Not available in most states — Most people won’t be able to apply for a Possible Finance loan, since it’s licensed to originate loans in only seven states: California, Florida, Idaho, Ohio, Texas, Utah and Washington.
  • Potentially fast funding — If you need your money the same day you apply, you may be able to access it by having it deposited onto an eligible Visa debit card. Otherwise, you can opt for a direct deposit, which will typically take one to two business days.
  • Doesn’t work with all banks — Before you apply, you probably want to check if Possible Finance works with your current bank or credit union. While the company says it supports more than 9,000 financial institutions, that doesn’t mean it will be compatible with the one you use.
  • Credit checks — Possible Finance performs a soft credit inquiry when you apply, which won’t hurt your credit scores.

Should I get a Possible Finance loan?

You should think carefully before agreeing to a Possible Finance loan because of its high interest rates and short repayment terms.

If you’re strapped for cash, a better option may be a payday alternative loan from a federal credit union. Payday alternative loans come in small amounts, too, but financing is much less expensive — with rates capped at 28%.

On the other hand, if you don’t need to borrow money and your main goal is to build credit, you’re probably better off taking out a credit-builder loan or secured credit card.

If you think a Possible Finance loan could be a good fit for you, first do the math to figure out the total interest you’ll pay. For example, Possible charges a flat fee of $20 for every $100 borrowed in Idaho and Utah. So if you borrow $500, you’ll end up repaying a total of $600 — a good chunk more for an eight-week loan. Try to shop around for a lower rate if possible.

How to apply with Possible Finance

The only way to apply for a Possible Finance loan is through its mobile app. And you’ll need to meet some additional requirements, too.

  • An online checking account with a minimum monthly income of $750
  • A driver’s license or state-issued ID
  • Your Social Security number
  • Mobile phone with access to Apple iOS store or Google Play app store to download the Possible Finance app
  • Account information for your compatible checking account. A compatible account is supported by the app and has a positive balance, recent income deposits and a minimum of about three months of transaction history.

Possible Finance considers a range of factors when considering you for a loan, such as whether you have any returned checks or insufficient funds charges on your bank account, monthly cash flow and any deposits or withdrawals from other lenders.

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

  • Earnin: If you just need a little bit of money to tide you over until your next paycheck, Earnin — which asks for tips instead of mandatory fees — may be a good fit for you.
  • Kashable: If you work for a participating employer and need a larger loan amount, Kashable is worth considering.
  • MoneyLion: If you want to improve your credit, a credit-builder loan from MoneyLion may be a better fit.

About the author: Erin Dunn is an editor at Credit Karma who specializes in personal loans and is passionate about financial literacy and budgeting. She’s an award-winning business journalist and editor w… Read more.