Editorial Review

Oportun Installment Loans: 2020 Review

Oportun offers small installment loans at rates that are lower than payday loans, but still high. On-time payments help you establish credit.

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Our Take

The bottom line: Oportun loans are for borrowers who need fast cash and want to establish credit. High rates make it an expensive option.

Oportun

Oportun

Min. Credit Score

None

Est. APR

20.00 - 67.00%

Loan Amount

$300 - $8,000

Pros & Cons

Pros

  • Financial education and counseling available.

  • Option to add a co-signer.

  • Rates are low compared to other lenders that don’t require credit history.

Cons

  • Available in a limited number of states.

  • Rates are high compared to banks and other online lenders.

Full 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.

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 installment loans to low-income consumers with no credit history or bad credit due to limited credit history. Common reasons for getting a loan include paying for auto repairs, covering temporary cash shortages and paying off higher-interest debt.

Oportun’s rates are high, but they’re lower than payday lenders, and making payments toward the loan can help you establish a credit history. The lender prioritizes borrowers’ income and expenses in a loan decision.

An Oportun loan is an expensive form of credit when you need quick cash. NerdWallet recommends against getting a loan with a rate above 36% unless you’ve exhausted all other options.

Oportun loan details

Requirements:

  • Proof of identity.

  • Proof of regular income.

  • Have a verified address and phone number.

  • Live in one of 12 states where Oportun operates.

Consumer-first features:

  • Certified Community Development Financial Institution.

  • Choose a payment date upon approval.

  • Financial education and access to financial counseling.

  • Rate reduction on subsequent loans.

  • Reports payments to Experian and TransUnion.

  • Allows co-signer.

Community focus: Oportun 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.

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 by check or prepaid debit card or have them transferred to a bank account.

Oportun says it requires proof of 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 apply with a co-signer.

The average Oportun borrower makes $43,000 a year and has been in his or her job for seven years. Half of Oportun’s borrowers have a family, the lender says, and the average borrower takes a loan of $3,885 with a 32-month repayment term.

A loan of that amount and term loan would carry:

  • Monthly payments: $185.

  • Total interest and fees: $2,041.

  • Total repayment: $5,926.

Measuring payments: Pew Charitable Trusts, a nonprofit policy research organization, recommends that small-dollar loan payments not exceed 5% of a borrower’s monthly income. Oportun says it adheres to that standard.

The company also says some part of every full payment a borrower makes goes toward the loan’s principal, unlike with many payday lenders.

Oportun allows borrowers to choose a payment date, and it reports payments to two of the three major credit bureaus. Reported on-time payments can help your credit score, while late and missed payments can hurt it. Oportun says it has helped more than 830,000 customers establish credit history.

How Oportun compares

Oportun’s rates are significantly lower than other lenders whose primary customers have bad credit or no credit history.

Here’s how it compares with three of those lenders.

OppLoans reports on-time payments to all three credit bureaus but offers APRs as high as 199%. Maximum repayment terms with this lender often reach 18 months.

NetCredit lets borrowers customize their loan amount and term, but loan APRs can reach 155%. Loan amounts reach $10,000, which is much higher than most payday lenders. NetCredit also reports payments to two of the major credit bureaus.

Rise loan APRs reach 299%, which is comparable to some payday lenders. Rise offers loans in 31 states, and reports payments to two major credit bureaus.

In some states, Utah-based FinWise Bank originates loans for Rise and OppLoans. The lenders both offer APRs above state-mandated maximums. Oportun, which funds its own loans, says its loans adhere to state laws.

Oportun is not a good idea if you:

  • Have established credit and are now trying to build it: Oportun offers a path to establishing and building your credit, but there are cheaper ways to build credit. If you don’t know your credit score, you can get a free score on NerdWallet.

  • Can get cash elsewhere: NerdWallet recommends exhausting cheaper alternatives first, even in an emergency.

Before you take an Oportun loan

  1. Exhaust all other options: If you've explored your alternatives and decide that they don't work 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.

  2. 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.

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.