NetCredit Personal Loans: 2022 Review
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Our Take
3.0
The bottom line:
NetCredit installment loans have triple-digit APRs, and payments may not always go toward the principal. Consider this loan as a last resort.
Full Review
on NerdWallet's secure website
Pros & Cons
Pros
- Fast funding.
- Offers pre-qualification.
- Option to change payment due date.
Cons
- High interest rates.
- Interest may add up to more than 50% of the loan amount.
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Full Review of NetCredit
NetCredit is an online lender that offers personal installment loans with high interest rates to borrowers with bad credit. Loan amounts are from $1,000 to $10,500, depending on the state.
Borrowers typically get NetCredit loans for unexpected bills or to consolidate other debts, says Kirk Chartier, chief strategy 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 see advertisements for CashNetUSA in the application, says Enova's head of global marketing, Kelly Jordan. More commonly, she says, CashNetUSA borrowers see NetCredit marketing materials.
NetCredit personal loan rates, fees and terms
APR range | 34% - 155%. |
Loan amount | $1,000 - $10,000. |
Fees | Fees vary by state.
|
Repayment terms | 6 months to 5 years. |
States where available | AK, AL, AR, AZ, CA, DE, FL, GA, HI, ID, IL, IN, KS, KY, LA, MI, MN, MO, MS, MT, ND, NE, NJ, NM, OH, OK, OR, RI, SC, SD, TN, TX, UT, VA, WA, WI and WY. |
How to qualify for a NetCredit personal loan
NetCredit uses information from TransUnion and Clarity Services, an alternative credit bureau, to evaluate loan applications. The lender also reviews applicants’ bank accounts to see transaction history and verify income.
Requirements:
Must be at least 18 years old, in most states.
Must have a verifiable source of income.
Must have a personal checking account.
Must have an email address.
NetCredit loan pros and cons
A NetCredit loan is an option for borrowers who don’t qualify for a loan with a lower interest rate. Before you borrow, consider the pros and cons.
Pros
Borrowers with low credit scores may qualify. NetCredit loans are designed for borrowers with low credit scores who struggle to qualify for other types of credit. A bad credit score (FICO score of 629 or lower) may not prevent you from getting this loan.
Pre-qualification. You can pre-qualify for a NetCredit loan to preview your potential loan offer without affecting your credit score. NetCredit calls this feature MyScoreSaver. The lender will perform a hard credit inquiry if you accept the offer.
Adjustable payment date. NetCredit lets borrowers change their payment date more than once during the loan’s lifetime. This is a helpful feature if you change jobs and have a new payday or add a new bill and need to balance expenses. Borrowers can move individual due dates or update their full payment schedule online or over the phone. The lender says more flexibility may be available by phone.
Fast funding. NetCredit says it typically funds loans the day after an application is approved. Applications submitted before 7 a.m. Central time may be funded the same day.
Help saving money. NetCredit’s website has a module that helps consumers find resources to help lower utility bills, spend less on food, and search for a job. This resource is publicly available on NetCredit’s website.
Cons
High interest rates. Most consumer advocates say 36% is the highest annual percentage rate a loan can have and still be considered affordable. NetCredit’s rates reach 155% in some states.
Interest may add up to more than 50% of the loan amount. You may end up paying more than half of what you borrowed in interest alone, depending on the rate and repayment term you get. For example, a $5,000 loan repaid over three years at 78% APR (the average, according to NetCredit) would cost $8,053 in interest alone — more than the loan itself.
Should you get a NetCredit loan?
Consider NetCredit loans as a last-resort option in an emergency. It can be easy to fall behind on payments toward high-interest loans. Missing a payment will hurt your credit and put you in a worse financial situation than when you started.
Depending on your goal, you may have better options. 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 cheaper options.
How NetCredit compares
OppLoans offers similar APRs but lower loan amounts. Unlike NetCredit, OppLoans doesn’t require a credit check and offers shorter repayment terms.
Oportun offers personal loans with maximum APRs below 36% to borrowers with little or no credit history. Like NetCredit, Oportun boasts fast funding and reports on-time payments to two credit bureaus.
» MORE: Installment loans for bad credit
Lawsuit against NetCredit
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 interest rate caps. NetCredit requested that the case either be dismissed or that arbitration agreements between borrowers and the lender be upheld, rather than having to pay the commonwealth for damages. The request was denied once in 2019, appealed and denied again in 2021.
NetCredit loan example
Compared to a payday lender, NetCredit offers large loans with high APRs and long repayment terms. Though you’ll have more time to repay this loan than you would a payday lender, you could still pay exorbitant interest costs.
A $1,000 loan with a 78% APR and one-year repayment term would carry the following costs.
Monthly payment: $123.
Total interest paid: $471.
Total amount repaid: $1,471.
Alternatives to NetCredit loans
Here are some alternatives that may be cheaper than borrowing.
For help meeting basic needs: Seek assistance from local nonprofits, charities and religious organizations. They can help you get food, clothing and access to transportation for job interviews.
For help with rent or utilities: Contact your utility company, landlord or mortgage issuer for help deferring a payment. If you need long-term help, consider seeking other housing, or contact a housing counselor.
To pay medical bills: Learn about ways to cover medical costs, including payment plans.
To cover other one-time emergency expenses:
Ask a friend or family member for a loan, or form a lending circle to borrow from those you trust without accruing interest.
Ask your employer for a paycheck advance, or use a loan app to borrow against your next paycheck.
Get a payday alternative loan or a small personal loan from a credit union. You have to be a member to use this option, but it’s one of the most affordable ways to pay for an emergency.
Try other ways to make money. You need some extra time to make this option work.
Before you take out 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 out the loan to the cost of not taking it out: 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 a NetCredit installment loan is your best option, 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.
How to get a NetCredit loan
Here are the steps to get a NetCredit loan:
Select "Check Your Eligibility" on NetCredit’s website and you’ll be asked questions about how much money you want to borrow and why.
Enter your address, date of birth, whether you rent or own, your email address and your Social Security number.
Create an account with your name, phone number and email address.
If approved, choose a loan amount and repayment term that works for you.
When you submit a formal application, the lender may ask for more information to verify your income and identity. According to NetCredit, loans are typically funded the next business day.
on NerdWallet's secure website
Methodology
NerdWallet rates lenders that offer high-interest personal loans separately from other lenders due to the consumer risk associated with these loans. We define high-interest loans as those with rates that exceed 36%, which is the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. The maximum allowable rating for high-interest lenders that we review is four stars. We award points to lenders that offer loans that minimize harm to consumers through affordability, transparency and practices that prioritize consumers’ needs. This includes: checking credit and reporting payments to credit bureaus, monthly payments that don’t exceed 5% of a borrower’s monthly income, fully amortizing repayments, transparency of loan rates and fees, and accessible customer service and financial education. NerdWallet does not receive compensation for our star ratings.
Read more about our methodologies for personal loans and our editorial guidelines.
Find the Best Personal Loan
Frequently asked questions
In states where personal loan interest rates are capped to protect consumers from predatory lending, NetCredit structures its loans so it can offer high-interest loans without breaking the law. The Commonwealth of Virginia sued NetCredit in 2018 for allegedly operating there without a license and misleading borrowers in an effort to avoid the state's rate caps.
Some borrower complaints with the Consumer Financial Protection Bureau state that payments did not go toward the loan’s principal, and NetCredit has said not all loans are fully amortizing from the start.
NetCredit does not offer payday loans. Though NetCredit loans can have triple-digit APRs, they don’t reach the 300% or higher rates typical of payday loans. Also, NetCredit loans are repaid in biweekly or monthly installments, while payday loans are typically repaid on your next pay date.
Enova International, the company that owns NetCredit, also owns CashNetUSA, which is a payday lender.
