NetCredit 2020 Review: High-Interest Personal Loans

NetCredit offers high-interest installment loans to borrowers with bad credit. You may have cheaper options.

Annie MillerberndMay 14, 2020

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Our Take

The bottom line: NetCredit installment loans are an option in an emergency if you can’t qualify for a loan with a lower APR and you have no other options.

NetCredit

NetCredit

Min. Credit Score

None

Est. APR

34.00 - 155.00%

Loan Amount

$1,000 - $10,000

Pros & Cons

Pros

  • Able to fund loans the same or next business day.

  • Soft credit check with pre-qualify.

Cons

  • Rates are high compared with other bad-credit lenders.

  • May charge an origination fee.

  • Some loan payments may not initially go to principal.

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Full Review

To review NetCredit, 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 personal loan product. Loan terms and fees may vary by state.

When to consider: As a last resort in a true emergency after you’ve exhausted other options.

NetCredit is a Chicago-based online lender, offering personal loans with high interest rates and short repayment terms. Borrowers with bad credit can get a NetCredit installment loan for $1,000 to $10,500. The lender says it can fund a loan as quickly as the same day it’s approved or the following business day.

Borrowers typically get NetCredit loans for unexpected bills or to consolidate other debts, says Kirk Chartier, chief marketing officer at NetCredit’s parent company, Enova International. Still, the loans have high annual percentage rates, and NerdWallet recommends considering this type of loan as a last resort.

Enova also owns online payday lender CashNetUSA, and some applicants seeking a NetCredit loan could also see advertisements for CashNetUSA, says Enova's head of consumer marketing, Kelly Jordan. More commonly, she said, CashNetUSA borrowers see NetCredit marketing materials.

Qualifying for a NetCredit loan

The lender uses the VantageScore to assess borrowers' risk but also considers employment history, residential history and other factors. NetCredit looks into borrowers’ credit history to review the pattern of on-time and missed payments that Chartier says can get lost in a traditional credit scoring model.

Requirements:

  • Must be at least 18 in most states.

  • Must have a verifiable source of income.

  • Must have a Social Security number.

  • Must have a personal checking account.

  • Must have an email address.

NetCredit loan features

NetCredit boasts fast funding and flexible terms. Here are some of the loans' consumer-friendly features:

  • Reports payments to Experian and TransUnion.

  • Gives option to customize loan amount and term.

  • Offers financial education resources, including budgeting and savings.

Refinance option: NetCredit lets some borrowers with a history of on-time payments refinance a loan to lower their monthly payments, the company says. Borrowers can’t apply for this option, though; instead, those who qualify for refinancing see a button on their online account that says, “I Want to Lower My Payments.”

If you choose to refinance, calculate the cost to be sure you’re not paying more in interest than you would without refinancing. Loans with lower payments and longer terms can be more expensive.

NetCredit loan example

NetCredit loans are cheaper than most payday loans, but they’re still an expensive option — for the average loan, you could end up paying more than double what you borrow.

The average NetCredit borrower has a 620 credit score and an annual income of $58,000. The average loan is $3,200 with an annual percentage rate of 87%.

A $3,200 loan with an 87% APR and two-year repayment term would carry:

  • Monthly payments: $285.

  • Total interest paid: $3,644.

  • Total amount repaid: $6,844.

How NetCredit compares

Here’s how NetCredit stacks up against similar lenders:

OppLoans offers similar APRs and loan amounts. Unlike NetCredit, OppLoans doesn’t require a credit check. OppLoans borrowers can change their payment date online.

Oportun offers personal loans with maximum APRs of 36% to borrowers with little or no credit history. Like NetCredit, Oportun boasts fast funding and reports on-time payments to credit bureaus. But Oportun allows co-signers.

Rise loan APRs can be much higher than NetCredit's. NetCredit's loan amounts are higher. Rise lets borrowers track their TransUnion credit scores and refinance for a lower rate after 24 on-time payments.

What to know about NetCredit

Interest rates: In some states, the lender offers loan amounts seemingly designed to circumvent state-mandated interest rate maximums. For example, California caps APRs on loans between $2,500 and $10,000 at about 36%. NetCredit offers loans up to $10,500 in that state, while APRs on loans from $10,100 to $10,500 range from 36% to 65%.

Amortization: Some borrower complaints published by the Consumer Financial Protection Bureau say that payments aren’t going toward the loan’s principal. In some cases, Jordan says, the first few payments on a NetCredit loan may go to interest only.

Virginia lawsuit: The Commonwealth of Virginia sued NetCredit in 2018, alleging the company operated there without a license and misled borrowers in an effort to avoid the state's rate caps.

NetCredit isn't a good idea if

Your main goal is to build credit: NetCredit reports on-time payments to two of the three major credit bureaus to help borrowers build credit. But there are ways to build credit without incurring high-interest debt.

You can get cash elsewhere: NerdWallet recommends exhausting all your options before considering a lender with high-interest rates. Even in an emergency, you may have other, cheaper options. Take the quiz below to explore alternatives:

Before you take a NetCredit loan

  • Exhaust all other options: If none of the above alternatives work for you, try to buy time from your creditor or work out a payment plan. Also, consider facing the short-term consequences of not paying, like 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 a NetCredit loan in your state.

If you take a NetCredit loan

After considering your alternatives and weighing costs, you may decide that a NetCredit installment loan is your best option. In that case, do what you can to carve out room in your budget to pay off the loan as quickly as possible. For most people, this loan is too expensive to be a long-term or repeat solution.

Personal Loans Rating Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including: soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus, and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews. Read our editorial guidelines.