Business Insider's personal finance team compared OneMain Personal Loans to the best personal loans and found it to be in need of improvement, due to high interest rates, poor communication, the impact that applying can have on your credit score.
OneMain Financial Personal Loan Overview
What Are OneMain Personal Loans?
OneMain personal loans are a worthwhile option for borrowers with low credit scores. However, you will want to consider an alternative if you have a good credit score because you can get lower rates elsewhere. The best personal loan for you will depend on your credit score, which determines what you qualify for and can lower your rate.
Key Features and Benefits
OneMain offers both secured and unsecured personal loans, but we're focusing on the company's unsecured personal loan options. Unsecured loans are more common with OneMain and with competing lenders. An unsecured personal loan doesn't require any collateral, such as a house or car, while a secured loan allows you to put up collateral in exchange for a rate that is often lower.
The company could be a good option if you need cash quickly. If your application is approved before noon on a business day, you could receive your money the same day.
However, it has a high minimum interest rate, so borrowers with good credit will likely find a better rate with a different lender.
OneMain Financial Personal Loan Terms and Rates
Interest Rates and APR
Fixed-rate personal loans with OneMain have APRs ranging between 18.00%-35.99%. This is higher than interest rates you can get with many other lenders, so consider other options before applying to OneMain.
Loan Amounts and Terms
OneMain offers personal loans between $1,500 and $20,000 with terms from 24 to 60 months (two to five years). It also offers the option to change your payment due date two times within the life of the loan.
OneMain Financial Loan Eligibility and Application Process
Eligibility Requirements
OneMain doesn't have explicit eligibility requirements for personal loans, but factors that impact eligibility include:
- Credit history: There's no minimum credit score requirement, but applicants should have a credit history.
- Income: Borrowers must have enough to cover their expenses and monthly loan payments.
- Expenses: Your regular expenses will be considered when your application is reviewed.
- Collateral: If you apply for a secured loan, the collateral you put up against the loan must meet certain requirements.
Other factors that impact your eligibility include the loan's purpose, your state of residence, and whether or not you've filed for bankruptcy.
Step-by-Step Guide to Applying for a OneMain Personal Loan
1. Fill out personal information on OneMain's website. Choose if you're applying for an individual or joint loan, a secured or unsecured loan, and your loan's purpose. You'll also need to request a loan amount. You'll also enter your name, Social Security number, and income history. You'll get an estimated monthly payment and APR range.
2. Formally submit an application and await approval. When submitting a formal application, you'll need to send in proof of income, like a W-2, tax returns, or other financial documents.
3. Sign loan agreement and get your money. You'll potentially be able to receive your personal loan funds fast with OneMain. If your application is approved before noon on a business day, you could receive your money the same day.
4. Make a plan to repay your loan. Fit your monthly payments into your budget, and make sure you have enough money to cover all of your financial responsibilities.
OneMain Financial Personal Loan Fees and Costs
Are There Any Fees?
With OneMain, borrowers can expect origination fees, the amount of which is contingent on the borrower's state of residency. For instance, flat origination fee amounts vary by state, ranging between $25 and $500. Percentage-based fees vary by state and range from 1% to 10% of the total loan amount, subject to state limits. OneMain also charges late payment fees, and insufficient funds fees. It does not charge any prepayment penalties, which means you can pay off your loan early without paying extra charges.
Late payment fees vary based on the state where your loan originated. Late payment fees are either a flat fee ranging from $5-$30 per late payment, or they're a percentage of your monthly payment amount, ranging from 1.5% to 15%. Insufficient funds fees are charged when a check payment or electronic ACH debit is returned because of insufficient funds. This fee amount varies depending on state law, and typically ranges from $10 to $50 per returned payment.
Understanding Origination Fees, Late Fees, and Prepayment Penalties
Origination fees are typically small fees that lenders charge for processing and disbursing a loan. This amount will typically be withdrawn from your overall loan amount, but be sure to check with your lender to get a full grasp of your loan's fee structure. Late fees are, as one could guess, fees imposed on borrowers for making late payments. Usually, This is a percentage of your unpaid balance, but it varies by lender. Prepayment penalties arise when borrowers make early payments or pay off their loan amount early.
How OneMain Compares to Other Lenders in Terms of Fees
OneMain is similar to many other lenders that charge late payment and insufficient funds fees. However, many lenders don't charge origination fees, and their fee structures are much more straightforward than OneMain's.
OneMain Financial Personal Loan Repayment and Flexibility
Repayment Options
There are several ways to repay your personal loan from OneMain. The lender offers online payments, in-branch payments, by-phone payments, by-mail payments, and payments via the OneMain app. It also allows payments at participating retailers using the free PayNearMe service at participating CVS®, 7-Eleven, Walmart, Casey's General Store®, or Family Dollar locations.
Flexibility in Repayment Terms
You can request a payment due date change by calling, mailing, or emailing your local OneMain branch, which will review your request and ultimately make a decision. Those hoping to change their loan due dates must meet certain conditions, including:
- Request only one due date change in a 12-month period.
- No more than two due date changes may be processed over the life of a loan.
- Due date may not be advanced more than 15 days.
- Due date may not be changed if the account is 10 or more days past due.
- Due date may not be changed until the first contractual loan payment has been made.
Early Repayment and Its Benefits
Payments for OneMain Personal Loans are due monthly, but you can make as many early payments as you'd like. This is a huge plus for many borrowers who are looking to pay off their loans early, as OneMain does not charge prepayment penalties.
OneMain Financial Personal Loan Customer Experience
User Reviews and Ratings
OneMain has 4.7/5 starts on TrustPilot, with the most consistent negative feedback highlighting inconsistencies in communication, loan terms, and conversations with loan officers. OneMain also earned 4.08/5 stars on BBB, with an A- rating from the BBB itself.
Common Praises and Complaints
Borrowers with OneMain have cited an easy application process, communicative agents, and fairly swift loan processing. However, several borrowers have reported monthly payments being withdrawn twice from their bank accounts, and other inconsistencies in how the loan overall was managed by OneMain.
OneMain Personal Loan Use Cases
Ideal Scenarios for Using a OneMain Personal Loan
OneMain recommends using its personal loans for the following purposes:
- Debt consolidation
- Home improvement
- Auto purchases
- Medical procedures
- Emergency funding
- Auto refinancing
- Moving
- Wedding expenses
- Auto repairs
- Financing vacations
You cannot use a OneMain personal loan as a student loan, for business or commercial purposes, to purchase securities, or to gamble or engage in illegal activities.
OneMain Personal Loan Alternatives
OneMain Financial vs. Avant Personal Loan
OneMain and Avant have similar loan terms and loan amounts, but borrowers looking for same-day funds might find that OneMain has an advantage. Additionally, a minimum credit score requirement of 580 might exclude some borrowers.
Avant could be a stronger option than OneMain due to OneMain's higher interest rates. Avant fees could be lower, as this lender caps its origination and administrative fees at 4.75%, while OneMain's fees could go up to 10%, or $500 depending on your state.
Read our Avant personal loan review.
OneMain Financial vs. LendingClub
LendingClub's personal loan minimum credit score requirement of 600 might leave some borrowers out. With interest rates starting higher, borrowers who qualify with LendingClub could get lower rates from OneMain.
LendingClub doesn't offer a secured loan option, which could give OneMain an advantage for anyone who wants to lower their interest rate with collateral. Funding through LendingClub will take at least four business days, according to the lender's site, giving OneMain's same-day funding another advantage.
Read our LendingClub personal loan review.
OneMain Personal Loan Pros and Cons
Advantages
- No minimum credit score for approval. Most personal loan lenders require credit scores above 660 to apply, but OneMain doesn't have a minimum.
- Potential for a small loan. You can get a loan for as little as $1,500, which is lower than what many lenders offer.
- Get your loan quickly. You may be able to get your loan on the same day that you apply with OneMain.
Disadvantages
- High origination fees. OneMain charges an origination fee on loans, which can either be a flat fee or percentage-based, depending on what state you live in. Flat fees range from $25 to $500, while percentage-based fees range from 1% to 10% of the loan's value.
- High starting interest rates. Interest rates for OneMain's personal loans range from 18.00% to 35.99% APR. In contrast, Avant's personal loans start at 9.95% APR.
OneMain Personal Loan FAQs
The main benefits of a OneMain Personal Loan include flexible loan amounts, quick approval and funding, personalized loan terms, and the ability to use the loan for various purposes, such as debt consolidation, home improvement, and major purchases.
How do OneMain Personal Loans compare to other personal loans?
OneMain Personal Loans have flexible loan amounts and terms, and it's known for accommodating borrowers with less-than-perfect credit. Compared to other lenders, OneMain provides personalized service through its branch network.
OneMain charges an origination fee, late fees, and insufficient funds fees if and when applicable. Review the loan agreement for specific fee details.
Applying for a OneMain Personal Loan will affect your credit score, because OneMain performs a hard credit check when you apply. However, it consider factors beyond just the credit score, making them a viable option for those with diverse credit profiles.
You're eligible for a OneMain Personal Loan if you're a US citizen or permanent resident, are at least 18 years old, and meet minimum credit and income criteria. Specific requirements vary, so check OneMain's official website for detailed information.
To maximize the benefits of your OneMain Personal Loan, use the loan for reasons that provide the most value, such as consolidating high-interest debt or making home improvements that increase your property's value.
Why You Should Trust Us: How We Rated OneMain Financial
We rate all personal loan products on a scale of one to five. The overall rating is a weighted average considering seven different categories, judging some more heavily than others. We look at the following criteria, specifically:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths and loan amounts (15% of rating)
- Funding speed (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
See more on how we rate personal loans >>
