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8 Top Personal Loan Companies Online: Unsecured Loans, Small Personal Loans, Low Interest Personal Loans & More!

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Many people will need or want to use a personal loan at some point in their life. Whether you want to consolidate credit card debt or perhaps make an improvement to your home, personal loans can be an easy, responsible way to handle your finances.

However, just like any major financial decision, you need to make this one carefully. 

Do your research about online loan providers, and make sure you can responsibly fulfill the terms. Unfortunately, there are many predatory lenders out there who try to offer you hope or a big advance amount but will end up jeopardizing your future and ruining your credit history.

We took a look at some of the most famous personal loan companies to help you find the best personal loan for your needs. Continue reading to see the best personal loan lenders.

Top Personal Loan Providers: First Look

  1. Best Personal Loan Provider Overall – LoanPioneer 
  2. Best for Low Rate Unsecured Personal Loans – Quicken Loans (Rocket Loans) 
  3. Competitive Personal Loan Rates – LightStream
  4. Best for Personal Loans for Tuition – SoFi
  5. Flexible Loan Purposes – Upstart
  6. Best lender for bad credit – Avant
  7. Best for Canadians – Fairstone
  8. Connects High-Risk Borrowers to Loan Lenders – ZippyLoan

1. LoanPioneer – Best Personal Loan Provider Overall

Pros

  • Fast cash approval
  • No fees
  • No prepayment penalties
  • Flexible loan use

Cons

  • Hard-pull credit checks
  • Non-competitive APRs

LoanPioneer connects you to its trusted network of lenders. And because the company doesn’t charge a thing for its service, it might make them stand out from the pack, unlike some top picks on our list. Ensure you’re a US citizen or permanent resident before getting your hopes high, though.

While it may conduct hard-pull credit checks, LoanPioneer’s fast approval rate might come in handy if you need the money for emergency use. You can have your funds ready as early as the next business day!

This company boasts non-competitive APRs, at least comparatively, starting from 5.99%. But they don’t limit your use of the loan, unlike some providers. Whether you want to consolidate debt, improve your home, go on vacation, etc., you could qualify for a loan with one, or more, of LoanPioneer’s lenders.

  • Min Credit Score: >500
  • APR: 5.99% to 35.99%
  • Term Lengths: 3 months to 36 months
  • Origination Fee: Information unavailable
  • Prepayment Penalty: None

2. Quicken Loans (Rocket Loans) – Best Providers for Low Rate Unsecured Loans

Pros

  • No prepayment penalties
  • Easiest online application
  • Fast cash approval
  • High maximum loan amount

Cons

  • Non-competitive APRs
  • Moderate/High origination fees
  • Late fees

Quicken is the giant in the room when it comes to online financial management. They finance large loan amounts and mortgages through a second brand, Rocket Loans. For mortgage refinancing, here are a few home mortgage refinance lenders to consider.

They can approve applicants with credit scores as low as 640, which is pretty forgiving. If you have a great credit history, you can get an APR as low as 7.141%.

Because of Quicken’s established online processes, they can often offer some of the fastest cash approval, sometimes within 2-4 days. Quicken only grants loans to U.S. citizens or permanent residents.

  • Min Credit Score: 640
  • APR: as low as 7.161%, up to 29.99%
  • Term Lengths: 36 months, 60 months
  • Origination Fee: 1%-6%
  • Prepayment Penalty: None

3. LightStream – Competitive Personal Loan Interest Rates

Pros

  • No prepayment penalties
  • No fees
  • ‘Rate-Beat Program’ – will beat opponent’s APR by 0.1%
  • Fast cash approval

Cons

  • Requires 660 credit score
  • No prequalification process
  • Hard-pull credit checks

LightStream offers very competitive interest rates. Not only are the rates low, but they guarantee lower rates than competing lenders and will beat any other APR by 0.1%.

With good credit history, you can get a decent APR. With an excellent credit score, you can get an APR as low as 2.49%! But be forewarned, LightStream conducts ‘hard pull credit checks, which can affect your credit score.

LightStream can sometimes approve loans and deposit cash within a single day.

With the best personal loan rates, Lightstream offers the best personal loans and is best for debt consolidation for qualifying U.S. citizens or permanent residents.

  • Min Credit Score: 660
  • APR: 2.49% to 19.99%
  • Term Lengths: 2 to 12 years
  • Origination Fee: None
  • Prepayment Penalty: None

4. SoFi – Best for Personal Loans for Tuition

Pros

  • No origination or late fees
  • No prepayment penalty
  • Promotional cash gifts
  • Flexible use for loans

Cons

SoFi is another online personal loan lender. They are currently offering a cash gift of $360 if you get a soft credit check and approval for a loan from them.

Unlike some of the other lenders in this article, you can use SoFi’s loans to cover expenses, like tuition, that are usually forbidden for loan amounts.

SoFi’s approval process is relatively slow compared with Rocket or LightStream. Approval can take up to 11 days. SoFi only grants loans to U.S. citizens or permanent residents.

  • Min Credit Score: 640
  • APR: 5.99% – 20.99%
  • Term Lengths:  2-7 years
  • Origination Fee: None
  • Prepayment Penalty: None

5. Upstart – Flexible Loan Purposes

Pros

  • Approval not necessarily based on credit history
  • Flexible loan purposes

Cons

  • $50,000 maximum loan amounts
  • Potentially high fees
  • High APRs

Upstart was founded by ex-Google employees, so you can be sure that they will think outside the box when it comes to personal loan approval. Their approval is not only based on your credit. 

Rather than focusing solely on your credit history, Upstart will look at literally thousands of different factors while considering your loan application. However, don’t let your credit score slide—it’s still the primary factor in getting a low APR.

While Upstart’s personal loan rates aren’t as competitive as others in this article, they will allow you to use your loan money for the largest variety of purposes. After all, if they think outside the box, you can also. 

In addition to being a U.S. citizen or permanent resident, Upstart requires that you have a minimum annual income of $12,000.

  • Min Credit Score: 620
  • APR: 6.18% to 35.99%
  • Term Lengths: 36 months, 60 months
  • Origination Fee: 0%-8%
  • Prepayment Penalty: None.

6. Avant – Best Personal Loans for Bad Credit

Pros

  • Offers secured loans
  • Approval with a bad credit score

Cons

  • High APRs
  • Moderate origination fees
  • $35,000 maximum loan amounts

If you have a poor credit score, Avant might be the best option for you. They accept applications based on your credit scores as low as 580.

Avant also offers guaranteed loans. This means they can provide lower interest rates and lower origination fees if you have a car that you are willing to put up as collateral.

Because they finance riskier borrowers, they naturally have higher interest rates and late payment fees. They boast next-day approval and cash availability.

  • Min Credit Score: 580
  • APR: 9.95% to 35.99%
  • Term Lengths: 24 months to 60 months
  • Origination Fee: from 2.5% up to 4.75%
  • Prepayment Penalty: None

7. Fairstone – Best Online Lender for Canadians

Pros

  • Offers secured loans for homeowners
  • Longest payback periods (with secured loans)
  • No origination fees

Cons

  • For Canadian citizens only
  • $35,000 maximum loan amounts
  • Prepayment penalty

Because most banks require U.S. citizenship, Canadian citizens have limited options for personal loans. Fairstone is a Canadian lender who specializes in personal loans for Canadians.

Fairstone, unfortunately, offers loan interest rates that are comparable to credit card interest rates. However, if you are a homeowner, you can offer your home as collateral for a secure loan. Secure loans have lower interest rates and longer payback periods, giving you a very low monthly payment. 

Just remember that you will be making these payments for a long time, and the total amount paid will be excessively large. Fairstone only grants loans to Canadian citizens or permanent residents. It is the best option for Canadians.

  • Min Credit Score: Information unavailable
  • APR: 19.99% to 39.99%
  • Term Lengths: 36 months to 60 months, or 120 months for a secured loan
  • Origination Fee: None
  • Prepayment Penalty: Yes, for secured loans. Unsecured loans have no prepayment penalty

8. ZippyLoan – Connects High-Risk Borrowers to Lenders

Pros

  • Bad credit scores accepted
  • Offers lowest minimum loan amount

Cons

  • Very High Fees
  • Short payback periods
  • Late payment fees

ZippyLoan is not actually a lender. They are a service connecting high-risk borrowers to lenders. As such, ZippyLoan can help customers with very low credit scores and history. But as you might expect, rates will be high, and terms will be unforgiving.

The fees associated with ZippyLoan personal loans can be as high as 30% of the loan amount. This works out to amazingly high interest debt.

Loans like this are often called “payday loans” because they are meant to be paid back when paychecks are deposited. Payday loans usually have the lowest minimum loan amount.

ZippyLoan usually only accepts applications from borrowers with a regular paycheck.

  • Min Credit Score: None
  • APR: Varies
  • Term Lengths: 6 months to 6 years (some can be paid off in a few weeks)
  • Origination Fee: 15%-30%
  • Prepayment Penalty: None

Choosing the Right Lender: Your Questions Answered

How Do Personal Loans Work? 

A personal loan (also called an installment loan) is a type of loan where the lender provides you a large upfront amount, which you repay in monthly installments for a certain period of time.

The loan amount can range from $1000 to $100000, depending upon your credit score and your debt to income ratio (DTI).

The repayment period usually ranges between one and seven years.

Personal loans differ from other loans also based on the purpose of the money. For example, most lenders will not grant a personal loan for the purposes of paying tuition, business expenses, or with the intention of gambling.

What Are the Qualification Requirements for a Personal Loan?

Aside from having a good credit score and a low DTI, there are other qualifications that you will probably have to meet to get a personal loan online.

Citizenship: If you apply for a loan from a U.S. financial institution (or even many online lenders), they may require you to prove your citizenship or permanent residency. You will need a social security number for almost any kind of loan. 

If you are not a U.S. citizen or permanent resident, you may be able to apply for a loan with an eligible cosigner who has U.S. citizenship.

State of residence: Additionally, most banks or lenders with physical offices will require that you have a permanent address in a state in which they conduct business. They might ask you for proof, such as utility bills mailed to that address.

Minimum age: Most banks and lenders will not approve a loan to anyone under 18 without a cosign.

Government-issued identification: Before applying for a loan, make sure you have a driver’s license, social security card, or another form of government-issued ID.

Steady Employment/Regular Income: You should be ready to show proof of employment (going back a few months, hopefully) or other sources of income. This will help determine your DTI as well. Lenders may ask for paycheck stubs, bank statements, or other documentation.

Meet credit score requirements: Each lender will have minimum credit score requirements. See our description of each lender for an estimate of each one’s minimum credit score.

How Much Do Personal Loans Cost?

Personal loans have three cost factors to consider before you sign on the bottom line.

Interest rates: Depending on your credit score, your personal loan might have an interest rate anywhere between 5% and 35%. Of course, you’ll want to improve your credit score as much as possible to get the lowest rate. Learn more about how to fix your credit.

You should also consider that the shortest payback period will help you save the most on interest payments. If you can pay off your loan in one or two years, that will be much cheaper than paying it off over seven years. 

Origination fees: Lenders typically charge a fee for processing and approving your loan application. This fee can be between 1%-6% of the total loan amount.

Early cancellation fee: If possible, you will want to find a personal loan without an early cancellation fee. Banks and other lenders charge this fee to make up for the interest payments they will lose if you pay off your loan early. 

Basically, this is a penalty for responsible loan management. Avoid it if at all possible, or try to get the smallest cancellation fee offered.

When Is a Personal Loan a Good Idea/Bad Idea?

A personal loan is usually a great idea if you have multiple debts with high interest rates, and you can consolidate them into a single loan with a lower interest rate.

If you have credit card debt with outstanding balances and high interest rates, a personal loan is a good way to save money on interest payments. However, there are several self-assessment indicators that you should not take out a personal loan:

Covering basic living expenses: If you are taking out a personal loan to make rent or utility payments, this is a dangerous indicator that you may be living above your means. Loan providers are hesitant to lend money in these situations because it indicates that you may have trouble making payments.

Paying for luxury items or events: It’s also not a good idea to take out a personal loan for expensive electronics, jewelry, or weddings, or vacations. This is a bad financial habit to get into, and it’s much better to save up for expenses like these.

Using the loan for investment: Investments always carry a risk, and it’s a bad idea to use loan money for a risky purpose. If your investment opportunity is safe, it will have a lower interest return than your loan conditions. If your investment suggests a higher return, that indicates a higher risk that you could actually lose money. 

Either way, it’s a bad idea to take out a personal loan for investment purposes.

Is Using a Loan To Pay off Debt a Good Idea?

Consolidating your debt into one loan with a low interest rate can be a great idea. But if you have multiple debts, this may be an indication of other financial problems.

Before listening to the commercials that promise ‘one low monthly payment,’ consider consulting a licensed financial manager. He can help you create a budget and make sure your spending habits fall within your means.

If you have gotten your budget under control, then the top debt consolidation loans are a great way to reduce your overall interest payments and simplify your debts.

Risk and Benefits

If you begin to miss your monthly payments on a personal loan, it will impact your credit score. Lenders might use debt collection agencies to recoup the loan, which can quickly turn unpleasant. You will also quickly find that other banks and lenders will not conduct business with you.

However, if you can responsibly make monthly payments, you might be able to get some quick cash necessary to improve your home, pay emergency medical bills, or consolidate debt. If you have a good credit score and a low DTI ratio, a single low monthly payment for a few years might take care of your immediate needs.

Best Personal Loans: The Takeaway

If your credit has seen better days, look into LoanPioneer. They offer flexible loans that can be used to sort out debt, pay for home improvements, go on vacation, and so on! Alternatively, Quicken Loans are a solid choice if you’re looking for potentially higher loan amounts. 

On the other hand, if you have good credit, LightStream can give you the best APR and payment plans. It’s a great choice for home improvement loans or debt consolidation. 

Payday loans like ZippyLoan are not recommended except in dire emergency cases. You should also consider looking into the best credit repair company for your unique needs before proceeding to your next loan. An improved credit score always translates to better rates.

Always be sure to compare monthly payments to your current payments before consolidating, and examine all of the fine print before signing a new loan.

 

The reviews and statements published here are those of the sponsor and do not necessarily reflect the official policy, position or views of Observer.

8 Best Personal Loans Online: Compare Online Lenders for Personal Loans in 2021

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Bad Credit

Inside the Highly Profitable and Secretive World of Payday Lenders

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Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



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What’s Questionable Credit and Can I Get a Car Loan With It?

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Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Entrepreneur Tae Lee Finds Her Fortune

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By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email [email protected]; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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