U.S. Bank Simple Loan: 2022 Review

When to consider: When you urgently need cash, before other high-interest loans, but after exploring interest-free alternatives.

U.S. Bank is one of few mainstream banks to offer small-dollar installment loans as an alternative to online or storefront payday loans. The Simple Loan is offered in amounts of $100 to $1,000 that’s repaid with three monthly payments.

You must have a bank account with U.S. Bank before you borrow. The bank reviews your transactions, banking history and credit information to qualify you. A lender that evaluates your ability to repay by checking your credit or reviewing your bank account is less likely to offer a loan you can’t afford.

U.S. Bank’s Simple Loan is a fast way to handle emergency expenses if you have bad credit (below 630 FICO score) or thin credit history. Compare this loan with alternatives before you borrow to ensure it’s the best option.

» MORE: U.S. Bank personal loans review

U.S. Bank Simple Loan at a glance

U.S. Bank Simple Loan details

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 about 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 origination fees, late fees or prepayment penalties with the U.S. Bank Simple Loan.

Loan example: A $500 loan with an APR of 36% repaid over three months would carry:

• Monthly payments: $177.

• Total interest: $30.

• Total amount due: $530.

Requirements

To qualify, you must have a U.S. Bank checking account that’s at least six months old and has at least three months’ history of recurring direct deposits.

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 does a hard credit pull when evaluating a Simple Loan application. Though it checks only one of the three major credit bureaus, you still may see a temporary dip in your score.

» MORE: Installment loans for bad credit

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, while other small-dollar lenders may not.

Rates on Oportun loans are also capped at 36% and amounts reach up to $10,000. The lender doesn't require borrowers to have a credit score or be an existing customer. The company prides itself on helping consumers build credit.

OppLoans also offers higher loan amounts than U.S. Bank, but they come with higher APRs, too. The lender doesn't check your credit score when you apply for a loan, but it does report payments to all three credit bureaus on most loans.

» MORE: Best installment loans

U.S. Bank Simple Loan is not a good idea if:

• You only want to build credit: A secured credit card (which U.S. Bank also offers), a credit builder loan or paying off existing debt are cheaper ways to build credit. If you don't know your credit score, get it for free on NerdWallet.

• You can get interest-free cash elsewhere: NerdWallet recommends exhausting cheaper alternatives first, even in an emergency.

Alternatives to U.S. Bank’s Simple Loan

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.

If you take a Simple Loan