Home » OneMain Financial Review 2022: Options for Those With Imperfect Credit, but Relatively High APRs

OneMain Financial Review 2022: Options for Those With Imperfect Credit, but Relatively High APRs

by Steven Brown

OneMain Financial is a subsidiary of OneMain Holdings, a financial services holding company. Originally founded in Indiana in 1927, the company currently has 1,400 branches in 44 states and serves over 2.2 million customers. 

OneMain Financial specializes in personal loans for non-prime consumers, meaning individuals with credit scores of 659 or below. Focusing on applicants’ ability to repay, it offers loan amounts as high as $20,000 and issues both secured and unsecured loans. But because non-prime borrowers tend to be riskier loan candidates and require more intensive service levels, OneMain Financial may charge higher interest rates than some other lenders. 

OneMain Financial can be a useful solution if you don’t have great credit but need a personal loan, as the option to add a co-applicant or collateral could give you a better chance of qualifying for a loan. Its 7-day cancellation policy also provides some flexibility if you change your mind about your loan. However, borrowers with good to excellent credit may qualify for better rates and higher loan maximums with other lenders, who may not require any collateral.

What to Know Before Getting a Personal Loan

Personal loans can be appealing when you have a financial emergency, need to fund a big expense, or want to consolidate your debt. Depending on the lender, personal loans can be either secured or unsecured. Secured personal loans require you to use your property, such as a car or other vehicle, as collateral to secure the loan. Unsecured loans do not require any collateral. 

When taking out a personal loan, only apply for the minimum amount you need to cover your goal. Depending on your creditworthiness and the lender you choose, personal loans can have relatively high fees and interest rates, so you may end up paying a substantial amount of money on top of the loan principal. In the case of secured loans, you also risk losing your property if you fall behind on your payments, so it’s essential that you only borrow what you need and have a plan in place to repay the loan on time. 

Before submitting your loan application, it’s wise to shop around and compare quotes from different lenders to find the best personal loan rates. 

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How to Qualify for a OneMain Financial Loan

To apply for a loan from OneMain Financial, you will need: 

  • A government-issued ID
  • Proof of residence, such as a driver’s license or utility bill
  • Proof of income, such as tax returns or pay stubs

In addition, OneMain Financial loans are not available in Arkansas, Alaska, Connecticut, Massachusetts, Rhode Island, or Vermont. 

OneMain Financial doesn’t have a minimum credit score requirement. When we reached out to the company for details, a company representative said that ”OneMain does not use commercially available credit scores (e.g., FICO or Vantage Score) in making lending decisions.” Instead, the company looks at “a number of different criteria including credit bureau and alternative data sources, application data, as well as any history [OneMain Financial] may have with an applicant,” according to the representative.

According to OneMain Financial’s 2020 annual report, most of its borrowers have had some financial difficulties in the past or have limited credit experience. In 2020, approximately 47% of the money OneMain Financial lent went to borrowers with credit scores of 619 or below. 

OneMain Financial doesn’t have a minimum income requirement, but a company representative said it does require “minimum monthly free cash flow levels including debt repayment for all approved loans.”

When evaluating your application, OneMain Financial will review your household budget, your capacity to repay the loan, and the value of your collateral, if applicable. If you are requesting a larger loan amount, you may need to provide collateral. OneMain Financial accepts the following as collateral: 

  • Automobiles
  • Trucks
  • Motorcycles
  • Boats
  • Campers
  • RV’s

Instead of an appraisal, OneMain Financial uses “an industry-standard valuation tool, which considers the age, mileage, and options on the collateral,” as well as images of the collateral, to determine its value, according to a company representative. To protect your collateral, OneMain Financial requires customers applying for secured loans to have full coverage insurance for the vehicle.

If you’d like to get a larger loan, OneMain Financial does allow you to add a co-applicant to your application. A co-applicant can increase your chances of qualifying for a loan and securing a better interest rate. 

Who Should Get a OneMain Financial Loan

With OneMain Financial, you can borrow up to $20,000 and you may be able to get your money as soon as the same day your application is approved. Because loans are disbursed quickly, OneMain Financial can be a good option if you’re facing an emergency expense, such as: 

  • Car repairs
  • Broken appliances
  • Medical bills
  • Unplanned emergency travel

About 25% of the company’s customers live in credit-insecure counties —  areas where residents have limited access to traditional forms of credit. With that in mind, OneMain Financial’s personal loans are best for borrowers that have less-than-perfect credit scores or that have struggled to qualify for other types of credit in the past. 

OneMain Financial is also useful if you prefer a lender that offers in-person assistance. If you need help applying for a loan, you can meet one-on-one with a OneMain Financial representative at one of the company’s local branches. 

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