OneMain Financial Review
OneMain Financial is a private lender specializing in personal loans. Unlike many of the other leading companies that have made a foray into the online lending marketplace, OneMain Financial has a very long history and can trace its roots to 1912, when it was founded in Baltimore.
OneMain Financial has positioned itself as an excellent option for borrowers with less-than-perfect credit, and it offers a wide range of loans with appealing interest rates and flexible repayment terms.
Pros and Cons of OneMain Financial
Here’s what reviewers and customers like about OneMain Financial:
- A fast, easy, convenient prequalification process that does not affect your credit score
- A wide range of appealing options for borrowers with less-than-perfect credit
- The company offers a wider range of loan options (secured, unsecured, and joint borrower loans) than many other online lenders
- Fast funding upon approval
On the downside, OneMain Financial could stand to improve in some areas. These include:
- The company’s APRs are relatively high
- Origination and late payment fees vary from state to state
What Does OneMain Financial Offer?
Here’s a snapshot of what prospective customers can find with OneMain Financial as of January 2021:
- Loan types: Secured and unsecured personal loans
- Loan amounts: $1,500 to $20,000
- Estimated interest rate range: Approximately 18.00% to 35.99%
- Loan repayment terms: 24 months (2 years) to 60 months (5 years)
Borrowers enjoy flexible terms. Depending on the amount of your loan, you may be offered your choice of a 24-, 36-, 48-, or 60-month repayment period. This helps borrowers control their costs and manage their obligations with greater precision.
Interestingly, secured loans are an option with OneMain Financial. Relatively few other online lenders offer them, making OneMain Financial an intriguing option for borrowers considering this type of loan.
Secured loans require the borrower to offer up an asset as collateral in exchange for receiving the loan proceeds. They help people qualify for loans for which they would not otherwise have been eligible. Secured loans also typically come at lower interest rates than unsecured loans, creating the potential for significant savings.
To get a secured loan from OneMain Financial, you must own a car or other titled vehicle and provide the vehicle identification number (VIN) listed on its title. These loans can help borrowers secure higher loan amounts and lower rates, but they also put their vehicles at risk. If you take out a secured loan but end up defaulting on your payments, you run the risk of losing your vehicle. Keep this in mind if you decide to explore this option.
Fees and Loan Terms
Depending on your location, you could incur other fees when taking out a loan from OneMain Financial. Here’s a look at their additional fee structures:
- Origination fees: Varies from state to state
- Late fees: Vary from state to state
- Prepayment penalties: None
The only way to know for sure how much your specific loan will cost is to apply.
For some loans, OneMain Financial offers what is known as credit insurance. This optional add-on comes at an extra cost, but it also protects you in the event of a sudden injury, job loss, or other adverse event that affects your ability to repay the loan. If you opt for a secured loan, credit insurance could prove a valuable ally. However, under U.S. law, lenders cannot compel borrowers to purchase it.
OneMain Financial borrowers also receive free access to their VantageScore credit score. VantageScore is a FICO competitor, and this access offers a great way to monitor your financial health as you manage and pay back your loan.
How It Works
Getting prequalified for a loan through OneMain Financial is easy, and it will not affect your credit score. The company performs only what insiders call a “soft pull” of your credit file, meaning that the inquiry does not appear on your report and therefore does not weigh down your score the way a “hard pull” does. If you proceed with a loan application after receiving your prequalification, OneMain Financial will perform a “hard pull” that may affect your credit score.
To get started, visit OneMain Financial’s website and enter the amount of money you’re looking to borrow in the indicated field. From there, you will be redirected to a clean, simple prequalification form. To complete it, you will need the following information:
- Your full name
- Address and contact information
- Date of birth
- The last four digits of your Social Security Number (SSN), which the company only uses to verify your identity
- Monthly net income (before taxes)
- Income source or type
- Indicate whether or not you own a vehicle
After providing the necessary authorizations, your prequalification request will then be sent into the system. You will be notified when your loan offers are ready, and if you decide to take up one of the offers, you will be prompted to submit an application, provide bank account details and sign your loan documents.
OneMain Financial usually releases loan proceeds two to five business days after you’ve been approved.
OneMain Financial does not specify any minimum credit scores required to become a borrower. The service specializes in providing affordable loan options to people with damaged credit, so customers with less-than-perfect credit are welcome to apply and stand a good chance of approval. This is especially true if you own a vehicle and you’re willing to offer it up as collateral on a secured loan.
OneMain Financial may also evaluate your debt-to-income ratio when it assesses your application. This metric indicates how much debt you carry each month relative to the amount of money you make. It is widely considered a vital and reliable “stress test” for would-be borrowers.
What Others Are Saying
OneMain Financial has relatively few public complaints compared to many of its competitors. This is a good sign of its trustworthiness. Furthermore, OneMain Financial has been accredited by the Better Business Bureau (BBB) since 1985. Its BBB profile shows an average customer rating of 4 stars (out of 5), with more than 1,300 reviews.
These impressive metrics carry over to Trustpilot, where OneMain Financial enjoys a sparkling aggregate score of 4.8 out of 5. The sample size is also very large: more than 24,000 customers have weighed in, with 87% of them giving OneMain Financial a perfect score and 95% rating it at least 4 stars.
The Bottom Line
OneMain Financial has an excellent reputation and a very strong track record of customer satisfaction. Its APRs are relatively high, making it best for credit-challenged borrowers who struggle to find financing elsewhere. However, if you have excellent credit, you may find a better deal with another lender.
Disclosures from OneMain Financial
Not all applicants will be approved. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). If approved, not all applicants will qualify for larger loan amounts or most favorable loan terms. OneMain charges origination fees. Depending on the state where you open your loan, the origination fee may be either a flat amount or a percentage of your loan amount. Flat fee amounts vary by state, ranging from $25 to $400. Percentage-based fees vary by state ranging from 1% to 10% of your loan amount subject to certain state limits on the fee amount. Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes.
Example loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
Additional conditions for secured offers: Secured offers require a first lien on a motor vehicle that meets our value requirements, titled in your name with valid insurance. The lender places a lien on the collateral until the loan is paid in full. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral. If you are covered by the Military Lending Act, you are not eligible for secured offers.
Funding options; availability of funds: Loan proceeds may be disbursed by check or electronically deposited to the borrower’s bank account through the Automated Clearing House (ACH) or debit card (SpeedFunds) networks. ACH funds are available approximately 1 to 2 business days after the loan closing date. Funds through SpeedFunds can be accessed on the loan closing date by using a bank-issued debit card.
Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.
Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: North Carolina: $7,500