U.S. Bank Simple Loan: 2021 Review

To review U.S. Bank’s Simple Loan, 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: In an emergency, after you’ve explored less expensive options.

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 a short-term loan in amounts from $100 to $1,000 that’s repaid with three monthly payments.

You must have a relationship with U.S. Bank before you borrow. The bank reviews your transactions and other banking history to qualify you. A lender that evaluates your ability to repay 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, but it’s an expensive option when you need quick cash. Be sure to explore alternatives first.

» 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 $15 for every $100 borrowed and has a term of three months. That translates to an annual percentage rate of about 88%. For borrowers who set up autopay, the fee is $12 per $100, or a 71% APR.

That’s much cheaper than typical payday loans, where the average rate is above 300%. The Simple Loan is also repaid over three months, not the two-week cycle that's common of payday loans. There are no origination fees, late fees, missed-payment fees or prepayment penalties on the U.S. Bank Simple Loan.

Loan example: A $500 loan with an APR of 71% repaid over three months would carry:

• Monthly payments: $187.

• Total interest: $60.

• Total amount due: $560.

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 exceeds this, but it may cost less than some high-interest loans.

OppLoans, for example, 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.

Loans from Oportun have lower APRs than the Simple Loan, and the lender doesn't require that borrowers have a credit score. The company prides itself on helping consumers build credit. Borrowers can get a larger loan with an APR up to 36%.

» MORE: Best installment loans

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

• You're trying 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 cash elsewhere: NerdWallet recommends exhausting cheaper alternatives first, even in an emergency. Take the quiz below to explore your options:

Before you take a Simple Loan

1. Try all other options: If none of the alternatives listed above 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 with the cost of not taking it: Calculate the cost of not being able to cover your expense — whether it’s an actual cost like a late fee or a longer-term effect like missing work because your car won’t start. Then weigh that against the typical cost of a Simple Loan.

If you take a Simple Loan

If you decide to take a Simple Loan, carve out room in your budget to pay the loan off as soon as you can to save on interest charges. These loans may be much cheaper than payday loans, but they are still too expensive to be a long-term or repeat solution for your finances.