LendUp No Longer Offers Installment or Single-Payment Loans
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LendUp, an online lender that offered high-interest installment and single-payment loans to borrowers with poor credit, no longer originates new loans, according to a December 2021 announcement from the Consumer Financial Protection Bureau. LendUp agreed to stop making loans to resolve a lawsuit filed by the bureau earlier in 2021. The lender was the subject of multiple enforcement actions from the CFPB over the years.
The loans it offered were small — usually a few hundred dollars — with interest rates that reached as high as 1,250%. You can find small loans with lower rates at other online lenders, credit unions and banks.
Alternatives to LendUp
Online lenders, banks and credit unions can offer small loans to borrowers with imperfect credit or no credit history. Consider these alternatives, along with non-borrowing options, if you need cash fast.
Some online lenders have personal loans for bad-credit borrowers, or those with a FICO below 630.
Bad-credit loans tend to have higher annual percentage rates than banks and credit unions. The most consumer-focused online lenders won’t charge more than 36%.
Universal Credit offers loans starting at $1,000 and requires a minimum credit score of 560. The lender offers credit-building tools and a discount for setting up automatic payments.
Oportun offers loans starting at $300 to borrowers with fair credit (630 to 689 FICO) or no credit. Loan APRs are capped at 35.99%.
Capital Good Fund makes installment loans to borrowers with bad or no credit for things like emergencies, immigration expenses and home weatherization. Its loans are available in only a handful of states, and loan amounts and rates vary by purpose and state.
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Credit unions offer personal loans for as little as a few hundred dollars, but you have to be a member to borrow.
These not-for-profit institutions can have softer borrower requirements than banks. They consider credit and income as part of your whole financial picture, including your history as a credit union member, when reviewing your loan application. Federal credit unions cap APRs at 18%.
Navy Federal, which serves primarily military members and their families, offers loan amounts as low as $250.
First Tech’s minimum loan amount is $500. The credit union serves employees of certain telecom companies, employees of the state of Oregon and people who live in or work for Lane County, Oregon.
Payday alternative loans are credit union loans for up to $2,000 with APRs capped at 28% and repayment terms between one and 12 months. They’re not as common as personal loans, but hundreds of credit unions offer them.
Two major banks offer small-dollar loans.
U.S. Bank’s Simple Loan provides $100 to $1,000 with a fee of $6 or $15 per $100 borrowed.
Bank of America’s Balance Assist lets customers borrow up to $500 for a flat $5 fee.
Both loans are available only to existing customers and are repaid in three monthly installments. Both banks check your credit score with a hard credit pull when you apply for the loan.
What to look for in a lender
NerdWallet recommends borrowing from a lender that:
Checks your credit and reports payments to the three major credit bureaus, since on-time payments help you build credit.
Caps APRs at 36%, which is the highest rate an affordable loan can have, according to most consumer advocates.
Offers repayment terms of at least a few months, to give you time to repay the loan while keeping up with your other expenses.
What to know about LendUp
LendUp has a long track record with consumer and business oversight organizations. Over the years, these organizations have accused LendUp of violating consumer protection laws and ordered the lender to pay millions in refunds and penalties.
Here are the run-ins LendUp has had with regulatory agencies:
In 2016, LendUp agreed to pay $2.68 million in refunds, fees and penalties to settle a lawsuit with the California Department of Business Oversight, which alleged that LendUp violated the state's installment and payday loan laws.
In 2016, the CFPB ordered the company to pay $3.63 million in refunds and fines for misleading borrowers. The CFPB alleged that LendUp gave some consumers inaccurate information about the true cost of LendUp loans, advertised that all borrowers could get lower-cost loans when they couldn't and advertised that the company reported payments to the credit bureaus when it didn't. The company also failed to disclose some fees in its APR, making loans look cheaper than they were.
In a 2020 lawsuit, the CFPB alleged that LendUp had issued loans that violated the Military Lending Act beginning in October 2016. The law prevents lenders from issuing loans with annual percentage rates above 36% to active-duty service members and their dependents. According to the lawsuit, LendUp made over 4,000 loans with higher rates to more than 1,200 protected borrowers. The lender settled the lawsuit in 2021, agreeing to pay $300,000 to consumers and a $950,000 penalty.
In September 2021, the CFPB announced another lawsuit against LendUp for allegedly violating the 2016 consent order barring it from misrepresenting the benefits of borrowing, including advertising that repeat borrowing from LendUp would lead to lower rates. The lawsuit also accuses LendUp of failing to provide timely adverse action notices in some cases, and not accurately describing the reasons for credit denial on the notices in others. That accusation would put LendUp in violation of fair lending laws. To settle the lawsuit, LendUp agreed to stop making new loans, halt collection on some loans and to pay a $100,000 civil money penalty.