COVID-19: Loan Options and Payment Relief

Lenders are offering low-rate, small-dollar loans and options to defer payments in response to the COVID-19 crisis.

Annie MillerberndJune 17, 2020

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The COVID-19 crisis is sparing almost no one when it comes to finances. For some, stimulus checks and debt relief won’t be enough, and they’ll need to borrow money. Those already carrying personal loans may be looking for help with payments.

While some personal loan lenders are tightening approval requirements, others have introduced low-rate, small-dollar loans to consumers dealing with financial hardships. Other lenders are letting existing customers defer their personal loan payments without fees.

NerdWallet's Guide to COVID-19

Learn about your options to manage debt, how government aid works and what you can do to prepare.

If you need to borrow money

U.S. Bank and Capital Good Fund are two lenders offering small loans at reduced rates. Neither lender requires borrowers to show proof that the coronavirus crisis has had an impact on their finances.

U.S. Bank

U.S. Bank has two loans available to existing customers.

Simple Loan

The U.S. Bank Simple Loan is a short-term, small-dollar loan. As of March 13, the company reduced the loan’s fee from $12 for every $100 borrowed to $6.

Loan amount: $100 to $1,000, borrowed in $100 increments.

Fee: $6 for every $100 borrowed.

Term: 3 months.

Personal loan

U.S. Bank has also made temporary changes to its personal loan as of March 13. This loan usually comes with a 1% prepayment fee, but a spokesman says the fee won’t apply to loans less than $5,000. In addition, the temporary loans have smaller loan amounts, a fixed low rate and shorter terms.

Loan amount: $1,000 to $4,999.

APR: 2.99% for all borrowers approved for the loan.

Term: Up to 48 months.

U.S. Bank also offers a loan extension program for existing customers who can’t make their monthly payment, the spokesman says.

Capital Good Fund

Capital Good Fund is offering a Crisis Relief Loan to consumers in the five states where it operates: Delaware, Florida, Illinois, Massachusetts and Rhode Island. These small-dollar loans have a low APR 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 due starting after the first three months. Payments can be further deferred 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 consider a person's data from February 2020 to determine whether the borrower could repay the loan.

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

Salary Finance provides loans through employers and partnered 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, says Salary Finance CEO Dan Macklin. 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 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 fast options 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. It won’t have an impact on 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 hardships. If you need help but don’t see your lender listed here, check other options for financial assistance.

Some lenders’ phone lines may be overwhelmed, so try email or chat, when possible.

Best Egg

Best Egg has stopped all late fees until further notice.

The lender is also offering a temporary payment holiday that extends your payments by two months. Interest will still accrue, according to the company, but automatic payments will be adjusted to meet your new due date.

Contact Best Egg at [email protected] to explain your hardship.

Discover

Discover is offering personal loan customers “support related to payment timing, fees and late payments,” according to a spokesman.

Call 877-256-2632 or use the company’s mobile app to reach a Discover agent.

HSBC

HSBC Bank is offering to defer personal loan payments and waive late fees for 120 days from the time you enroll in the company's hardship program. At the end of the 120 days, borrowers can make a lump-sum payment to cover deferred payments or agree to new terms that extend the loan term.

You can log in to learn about your options, or call the bank at 866-949-2351.

LendingClub

LendingClub is allowing customers to apply for a payment plan that would defer two months of payments. During that time, the company won't post late fees to borrowers' accounts or report the payments as late to credit bureaus.

Borrowers can apply by signing in and answering questions about their hardship and how much they could make in monthly payments instead. The company says it takes up to 10 days to process applications.

In May, LendingClub launched a resource for existing personal loan customers called Member Center, according to a news release from the company. In addition to payment options that help borrowers get back to their regular payment schedule, the Member Center has a tool that helps customers manage their money and improve their credit. The tool, called Credit Profile, 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 COVID-19 crisis dissipates.

LightStream

LightStream is allowing borrowers to defer loan payments, but you can only defer a payment once, according to the company's COVID-19 response page. The option isn't available if the account is 90 days past due or within two days of a scheduled automatic payment. The payment is reported to credit bureaus as a deferment affected by natural disaster and won't negatively affect your credit score.

Deferred 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

OneMain offered to waive late fees on payments between March 15 and April 30. The company halted credit reporting on late or missed payments between March 1 and April 30, according to its COVID-19 resource page. The company has since removed the deferral offering from its page.

Oportun

Oportun can offer customers reduced payments and deferrals. 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

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

PenFed is allowing customers who are not paid 30 days ahead or who are more than 30 days delinquent to skip a single payment during the COVID-19 crisis, according to a COVID-19 response page. Fill out a short request form to apply.

PNC

Qualified PNC customers can get an emergency hardship loan. A spokeswoman for the bank declined to provide details about the loan or how customers can qualify but said the bank is relaying those details to customers.

Customers can log in to see if their product is eligible for deferment or call 1-800-247-5626.

Possible Finance

Possible Finance has a forbearance plan that will allow customers to push payments out. Customers reach the company via its general request form.

Upstart

Customers with an existing Upstart loan can defer up to two months of payments without interest or penalties, according to an Upstart spokesperson.

Contact Upstart by emailing [email protected]

Wells Fargo

Wells Fargo is waiving fees and deferring payments for personal loan customers in hardship, according to a news release from the company.

To reach a Wells Fargo customer service representative, call 877-269-6056.

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