U.S. Bank Simple Loan Review

U.S. Bank lets customers borrow up to $1,000 in $100 increments with its Simple Loan. The lender charges a $6 fee for every $100 borrowed, and the loan is paid back in three monthly payments. A Simple Loan may be a smart alternative to online or storefront payday loans, which come in similar amounts but often charge triple-digit interest rates.

You must have a U.S. Bank checking account to be eligible for a Simple Loan. You can apply online or in the mobile app. If approved, you’ll receive the money within minutes.

U.S. Bank’s Simple Loan can be a convenient and fast way to handle an emergency expense, but it’s probably not a good option for repeat borrowing because the interest rate is relatively high.

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U.S. Bank Simple Loan at a glance

U.S. Bank Simple Loan requirements

To apply for a Simple Loan, you must have a U.S. Bank personal checking account that’s at least six months old and has at least three months’ history of recurring direct deposits. You’ll also need to supply your Social Security number as part of the application.

The bank does not list a minimum credit score requirement, but it likely reviews your transactions, banking history and credit information to qualify you.

You can take one Simple Loan at a time. Once your first loan is paid off, you must wait 30 days before applying for another. With payday loans, there's usually no "cooling off" period between loans. A break between high-interest loans can help borrowers avoid overextending themselves and slipping into a cycle of debt.

U.S. Bank may perform a hard credit pull when evaluating your Simple Loan application, which is common when applying for credit and temporarily drops your credit score by a few points. According to the lender, applicants typically know whether they’ve been approved in less than a minute. Funds will be available in your U.S. Bank checking account soon after approval.

U.S. Bank Simple Loan costs

The Simple Loan costs $6 for every $100 borrowed and has a term of three months. That translates to an annual percentage rate of just under 36%.

That’s much cheaper than typical payday loans, where the average rate is almost 400%. The Simple Loan is also repaid over three months, not the two-week cycle that's common for payday loans. There are no other fees, including no fee for late or missed payments and no fee for paying off the loan early.

Loan example: A $400 loan with an APR of 35.65% repaid over three months would carry:

• Monthly payments: $141.33.

• Total interest: $24.

• Total amount due: $424.

How U.S. Bank Simple Loan compares

Consumer advocates consider 36% to be the maximum APR for a loan to be affordable. The Simple Loan meets this threshold. Other small-dollar bank loans, like Bank of America’s Balance Assist, may offer a cheaper small-dollar loan based on the amount borrowed.

Some credit unions also offer loans under $1,000, though you’ll need to become a member before applying. Credit unions tend to look more favorably on fair- or bad-credit applicants (those with a credit score of 300 to the low 600s) and offer lower interest rates compared with other lenders.

Online loans are available, with most starting at $1,000 or higher. Some online lenders accept applicants with bad credit or a thin credit history. These lenders also fund loans quickly — often the same or next day — but may charge high interest rates.

» COMPARE: Best bad-credit online loans

U.S. Bank Simple Loan isn't a good idea if:

• You only want to build credit: A secured credit card (which U.S. Bank offers) or a credit-builder loan are cheaper ways to build credit over a longer repayment term. If you don't know your credit score, you can check it for free on NerdWallet.

• You regularly overdraw your account: Though the Simple Loan can provide quick cash, you’ll need to pay it back with almost 36% interest. Payments can beare automatically deducted from your checking account, so a Simple Loan could be risky if your balance is frequently low. Review your budget before choosing to borrow, and make sure you have enough money in your checking account to cover the three monthly repayments.

• You can save or earn cash in the short term: Cash is always the cheaper way to pay since there’s no interest. Identify ways to earn extra money before borrowing from a bank or other lender.

• You need to borrow a large amount. The maximum amount for a U.S. Bank Simple Loan is $1,000, and you’ll need to wait at least 30 days after repayment to take out another Simple Loan. Many lenders offer maximum loan amounts of $40,000 to $50,000.

Alternatives to U.S. Bank Simple Loan

Here are alternatives that may be cheaper than a Simple Loan: