When to consider: A last resort in a true emergency after you’ve exhausted other options
Oportun is an online and storefront lender that makes small loans to low-income consumers with bad credit or no credit history.
Oportun’s rates are lower than traditional storefront and online payday lenders, and it’s more affordable than similar payday alternative lenders NerdWallet has reviewed.
Still, an Oportun loan is an expensive form of credit when you need quick cash. NerdWallet recommends exploring all your alternatives before taking it.
Oportun rates and terms
|APR range||20% to 66%|
|Loan amounts||$300 to $8,000 (Loans above $6,000 are available to qualified returning customers only)|
|Repayment schedule||Biweekly; Typically 7 to 42 months|
|Time to funding||Typically same day|
|Payment flexibility options||Choose your payment date upon approval|
Oportun personal loan review
To review Oportun, NerdWallet collected more than 30 data points from the lender, interviewed company executives and compared the lender with others that seek the same customer or offer a similar loan product. Loan terms and fees may vary by state.
Oportun calls itself an alternative to traditional payday lenders, which make quick, high-interest loans to borrowers with low credit scores, allow rollovers and can be aggressive about collecting payments, often leading borrowers into a cycle of debt.
Oportun does not allow rollovers and emphasizes building credit with its loans. Its underwriting process considers borrowers’ income and expenses, and loan payments are typically around 5% of a borrower’s monthly income, says Sarah Livnat, vice president of community engagement and impact at Oportun. That 5% threshold is recommended by consumer advocates as an upper limit of affordability for most borrowers.
Community focus: Oportun focuses on lending to people in low-income communities who may have low credit scores, thin credit files or no experience with credit, says Livnat.
The company is a federally certified Community Development Financial Institution, which means its primary mission must be promoting community development. It must also provide financial education among other requirements.
It also partners with nonprofit organizations that offer financial education, credit counseling and job coaching in the communities it serves.
Based in California, Oportun has more than 275 storefronts across eight states and is online-only in three other states.
How to qualify: Unlike payday lenders, Oportun does not require you to have a bank account when you apply, and nearly half of its customers have no credit score. You can choose to receive your loan funds through a prepaid debit card.
Oportun says it requires proof of regular income in the form of bank statements or pay stubs, and it checks databases that collect information on consumers with low credit scores. If you have a credit profile, the company factors in data from your credit report as well. If you cannot qualify for a loan based on your own income, you can use a co-signer.
The average Oportun borrower makes $40,000 a year and takes a loan of $1,800 at 34% APR, according to the company.
Loan example: Let’s look at a state example. The average Oportun borrower in California takes a $500 loan with a repayment term of 7 months at 59% APR. That works out to:
- Monthly payments: $86.
- Total interest and fees: $103.
- Total repayment: $603.
Oportun allows borrowers to choose a payment date, and it reports all payments to two of the three major credit bureaus, which can help your score. It also reports late payments — which can hurt your score — and charges a late fee for missing payments.
How Oportun compares
As a community lender, Oportun differs slightly from online-only lenders such as LendUp, OppLoans and Rise. The company is federally required to re-apply for certification every year, serve a specific target market such as low-income communities, and provide financial education related to its product, says Livnat.
Oportun’s rates are significantly lower than those of LendUp, OppLoans and Rise, which issue loans with APRs in the triple digits.
All four lenders offer consumer-friendly features to differentiate themselves from traditional payday lenders. They report borrowers’ payments to the credit bureaus to help build credit. LendUp and OppLoans report to all three major credit bureaus; Rise and Oportun report to two.
Rise and LendUp also allow borrowers to qualify for lower rates with successive loans through on-time payments or, in the case of LendUp, by watching financial education videos.
Oportun says it allows borrowers to refinance into a larger loan only if they have made on-time payments and repaid a certain portion of the principal. Returning borrowers get a lower rate, according to the company.
Oportun is not a good idea if you:
- Are trying to build credit: Oportun offers a path to building credit, but a secured credit card, credit-builder loan or paying off existing debt are faster and cheaper ways to do so. Learn ways to build credit. If you don’t know your credit score, get a free score on NerdWallet.
- Can get cash elsewhere: NerdWallet recommends exhausting cheaper alternatives first, even in an emergency:
|Alternatives to high-interest loans|
|1. Ask family and friends for a loan through lending circles or a loan agreement|
|2. Seek assistance from local nonprofits, charities and religious organizations|
|3. Get a payday alternative loan from a credit union|
|4. Ask your employer for a paycheck advance|
|5. Use an app like Earnin to get a paycheck advance|
|6. Go to a pawnshop|
Before you take an Oportun loan
- Exhaust all other options: If none of the alternatives listed above works for you, see if you can buy time from your creditor, work out a payment plan or face the short-term financial consequences of not paying, such as a late fee.
- Compare the cost of taking the loan to the cost of not taking it: Calculate the overall cost of not having funds for your purpose, then weigh that against the typical cost of this loan in your state.
If you take an Oportun loan
If you decide to take an Oportun personal loan, carve out room in your budget to pay the loan off to save on interest charges. Loans from Oportun are much cheaper than other payday alternative lenders, but they are still an expensive solution for your finances.