COVID-19: Loan Options and Payment Relief
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The COVID-19 crisis is sparing almost no one when it comes to finances. Though a second relief package from Congress could help bridge the financial gap left by unemployment and other hardships, some may still turn to loans. If you already have a personal loan, you may need help making your payments.
While many personal loan lenders have tightened approval requirements, others have introduced low-rate, small-dollar loans to consumers dealing with financial hardships. Lenders that previously had catchall hardship plans in place for customers affected by COVID-19 have switched to a more case-by-case approach.
If you need to borrow money
It may be worth calling local nonprofits, charities or credit unions for access to low-cost emergency funds. Alternatively, here are lenders that may help if you need to borrow short-term cash.
Capital Good Fund
Capital Good Fund is offering a Crisis Relief Loan to consumers in the six states where it operates: Delaware, Florida, Illinois, Massachusetts, Rhode Island and Texas. These small-dollar loans have a low annual percentage rate and deferred payments for the first three months.
Loan amount: $300 to $1,500.
APR: 5% for all approved borrowers.
Term: 15 months, with payments starting after the first three months. Payments can be deferred further if the COVID-19 crisis continues beyond that. Interest will accrue during the 90-day deferment period, says CEO Andy Posner.
The lender prioritizes banking history in its underwriting process. Instead of using a borrower’s current income and expenses, Posner says Capital Good Fund will try to understand if an applicant can afford the loan on current income, and if not, the lender will consider whether the applicant could have afforded the loan before the crisis.
The loans have no application, closing or prepayment fees and require no collateral. Borrowers can expect a decision two days after submitting an application, and Posner says applications for the Crisis Relief Loan will be prioritized over other applications.
Salary Finance provides loans through employers and partners with Equifax to give companies insight into employees' financial health. The partnership was in the works before the COVID-19 crisis began, says Salary Finance CEO Dan Macklin, and its offering isn't contingent on the pandemic's influence on the economy.
Through the partnership, employers get a view of anonymized worker credit information, Macklin says. Companies can use the data for free to spot which groups are experiencing the most financial stress and address it.
Salary Finance is typically offered through human resource departments as a benefit for employees, Macklin says. Payments made on Salary Finance loans are reported to all three credit bureaus.
Loan amount: $1,000 to $5,000, up to 20% of an employee's salary.
APR: 5.9% to 19.9%.
Term: 6 to 36 months.
Other borrowing options
Credit unions: These not-for-profit institutions offer some of the most consumer-friendly loans. A credit union loan often comes with a lower APR and more flexible terms than one from a bank or online lender.
Fair- and bad-credit borrowers (629 or lower FICO) may have a better chance of getting approval from a credit union because the underwriting processes tend to involve more than credit information.
Some credit unions also offer payday alternative loans, which are safer than high-interest, short-term payday loans. These loans have a maximum APR of 28%.
Online lenders: Online lenders can be a fast option for emergency loans. You’ll likely need good credit and a steady income to qualify in today’s climate. If you’re not sure whether you would qualify or what rate you’d get, you can pre-qualify for an online loan with NerdWallet. Pre-qualifying does not impact your credit score.
If you’re concerned about making payments
Some lenders are offering help, like deferred payments and waived late fees, for consumers facing hardship. If you need help but don’t see your lender listed here, check other options for financial assistance.
» MORE: Here's how deferment works
Customers may be able to choose from payment deferrals, adjusted payments or a debt management program that can reduce monthly payments across all debts, according to a company spokesperson.
Discover previously made a one-month deferral available. A spokesperson confirmed that the program has since ended, and the company encourages borrowers to call for help with the loan instead.
Customers who need assistance for more than one month can call 866-248-1255 or use the company’s mobile app to reach a Discover agent.
If you’re struggling to pay an HSBC personal loan, you can request a hardship plan by calling 800-524-9686. The company has different hardship programs for its products and doesn’t specify what modifications are available for personal loan borrowers. A spokesman didn’t respond to several requests for clarification.
LendingClub is still allowing borrowers affected by COVID-19 to defer payments and pay only interest during deferral, according to a spokeswoman.
The lender posts updates to its information page and has a line set up for hardship inquiries: 877-644-4446. The company says it takes up to 10 days to process hardship applications.
In May, LendingClub launched a resource for existing personal loan customers called Member Center, according to a news release. In addition to payment options that help borrowers get back to their regular payment schedule, the Member Center has a tool called Credit Profile that helps customers manage their money and improve their credit. It gives members a full view of their financial lives, including information like their debt-to-income ratio, credit utilization and credit score.
A company spokeswoman says the tool will remain available to customers after the COVID-19 crisis dissipates.
LightStream may allow customers affected by the pandemic or other natural disasters to defer loan payments. Email [email protected] to receive a phone number that will connect you with someone who can discuss your hardship. You can’t defer a payment if you're within two days of a scheduled automatic payment.
Deferments are reported to credit bureaus as a deferment affected by a natural disaster and won't negatively affect your credit score, the company says. These payments are tacked on to the end of your loan, and interest will accrue while payments are deferred.
Borrowers can log in and visit the Account Services page to request a deferment, or email [email protected] with questions.
OneMain will work with borrowers struggling to make payments. The lender’s borrower assistance program, which was part of the loan before the pandemic hit, can help borrowers receive deferred or reduced monthly payments, according to a spokesperson.
Oportun can offer customers reduced and deferred payments. The company says it won't report skipped payments as late to the credit bureaus if you make arrangements beforehand. Customers can reach the company via email at [email protected] or at 650-419-5779.
OppLoans is offering 30 days of missed payments with "no questions asked," for those who have been affected by COVID-19, says CEO Jared Kaplan. After that, customers can apply for a 90-day hardship program that will cut their payments in half. He says those accommodations won't negatively affect credit scores.
PenFed is offering to let eligible borrowers skip a payment. To see if you’re eligible, log into your account and select “Financial Assistance for Members Affected by COVID-19.”
PenFed also has a hardship center, where customers can apply for a temporary hardship program (less than six months) or a permanent hardship program (more than six months).
PNC says it may offer postponed or reduced payments to loan customers who are just now experiencing a hardship or whose hardship plans are about to expire. For most customers, the company says it can confirm eligibility for assistance immediately. To apply, visit PNC’s coronavirus hub page and click “Apply for Consumer Loan Hardship Assistance.”
Customers must enroll in online banking to access the online hardship request form.
Possible Finance has a forbearance plan that will allow customers to push payments out. The lender hasn't released much information on the plan since it published a blog post in March, but customers can still reach customer service via its general request form.
Upstart has loan modification options available to some customers affected by COVID-19, including an extended loan term or forbearance, according to an Upstart spokesperson. Previously, customers could defer up to two months of payments without interest or penalties.
Contact Upstart by emailing [email protected]
Wells Fargo will defer monthly payments for three consecutive billing cycles for eligible personal loan customers. Those who have already received assistance can still apply for more. Log in to your online account to see your options.
To reach a Wells Fargo customer service representative, call 877-269-6056.