Traditional lenders often shun borrowers with poor credit. That means that unless you have a strong income and a high credit score, you probably won’t be approved for a loan from the bank.
So what should you do if need cash and have a less than perfect credit score?
A slew of bad credit loan lenders has popped up online. OppLoans is a popular service geared toward people who mainstream lenders overlook.
The platform gives struggling people a chance to rebuild their finances without having to resort to using a cash advance. OppLoans offers its borrowers far more attractive rates than those seen in a typical payday loan. This post will explain the advantages and disadvantages of obtaining a loan through OppLoans.
What is OppLoans?
OppLoans is the online leg of Opportunity Financial, a Chicago lending company.
Their interest rates are steep compared to other personal loan companies, but OppLoans is targeting a specific customer. A lot of their borrowers don’t have a lot of options. OppsLoans’ terms are wildly attractive compared to those offered with most payday loans.
What Is an Opportunity Loan?
OppLoans offers opportunity loans. They’re similar to payday loans in that they’re a reasonable option for borrowers with bad credit. The difference, however, is that you get more time to repay an opportunity loan. An opportunity loan is designed for borrowers who normally wouldn’t be approved for a loan. Most lenders require that their customers have a decent credit score.
People with bankruptcies or missed payments in their pasts would be denied a loan. This would push them into payday advance companies where they settled for painfully high-interest rates and a short repayment schedule.
You can use the money to pay for anything that you want. It could go toward covering surprise medical expenses or paying off your credit cards.
Who Qualifies for a Loan?
You need to meet a few basic criteria to successfully work with OppLoans.
There’s no minimum credit score required to be an applicant, but it is not technically a no credit check loan. They will take into account your credit score, but it is more important that you have a job in order to pay back the loan. You’ll also need to make a certain amount of money per month. In most states, the amount is $1,500.
You should be at least 18 years old and not currently be serving in the military. When you apply for your loan, you’ll need to enter your bank account details. You must be paid via direct deposit to be approved.
How Much Will Your Loan Cost?
The company offers interest rates ranging from 36.00% to 199.00%. The rates are relatively high compared to those offered by more established lenders like banks. It should be noted that your interest rate will depend on what state you live in, your credit history, and how much money you’re asking for.
By comparison, someone with Excellent credit should be able to get a personal loan from a bank with an interest rate of 5.5% to 9.3%.
OppLoans asks for higher interest payments because they approve riskier borrowers, so if this is the only loan available to you due to a spotty credit history, it might be the best option.
Pros and Cons
OppLoans is an extremely attractive option for borrowers with a poor credit score or a nonexistent credit history. The company offers loans that are rarely available to people with an unusual financial history.
Here are some of the benefits.
There are a lot of reasons why a borrower might consider using OppLoans.
1. If you need to, you can borrow a lot of money. Depending on your state, you may be approved for up to $10,000.
2. You can rebuild your credit. Your loan repayments will be reported to the three major credit bureaus. If you make enough on-time payments, you might be able to improve your credit score.
3. You can receive funds quickly. The signup process is quick and easy. You should have a loan decision within minutes.
4. There’s no minimum credit score, but remember these are not personal loans with no credit check, as your score is still taken into account.
Here are some of the drawbacks.
While there are multiple benefits to how OppLoans operates, there are a few downsides as well.
1. The service only exists in some states. OppLoans doesn’t operate in nearly half of the states in the U.S.
2. Residents in some states have to pay extra fees. California borrowers, for instance, are required to pay a $75 administrative fee.
3. The interests rates are high relative to those of more traditional lenders. The rates are more reasonable than those offered by payday lenders, but they’re still expensive.
Overall, being a poor credit borrower can be tough. Nobody wants to accept steep interest rates, but sometimes you really need cash. If you have to borrow money before you can fix your credit, an opportunity loan could be an excellent option.
How Is OppLoans Different from Payday Lenders?
Opploans is still making a name for itself in the lending world. Opportunity loans aren’t available in most states, which is why most people haven’t heard of them.
The company isn’t a peer-to-peer lender as they lend directly from their own bank account, but that works to its advantage. You don’t need to wait for your loan to be posted to a marketplace, and for a dentist somewhere to decide to lend to you. Here is a good article about peer-to-peer loans if you would like to learn more.
OppLoans also isn’t a payday lender. Opportunity loans are much better for borrowers than payday advances. The interest rate is significantly lower and the repayment schedule is much more generous.
People with a credit score above 680 can likely find a loan with more reasonable terms than those offered by OppLoans. People with a lower score, however, would be smart to consider an opportunity loan before turning to a payday advance.
Find out More
OppLoans isn’t a perfect option. The interest rates are high and the repayment period is shorter than average. Borrowers with a strong credit score can likely find a better deal with another company.
However, there are a lot of advantages to working with Opploans. The company is willing to lend money to borrowers who would never be approved by traditional lenders.
Obtaining a loan isn’t your only option when you’re trying to rebuild your credit. If you don’t have a pressing need for cash, there are other things that you can do. For example, you can apply for a secured credit card.
We can help you navigate your financial options. Take a look at our learning center for tips on improving your credit.