LendingPoint Personal Loans Review
Jordan Wathen is a personal finance expert with a deep professional and personal expertise on credit cards. His articles have appeared on sites such as MSN, CNBC, and Yahoo.
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LendingPoint launched its first personal loans in 2015 to provide credit to borrowers who are largely ignored by personal loan companies that only lend to prime and super-prime borrowers. In just three years after launching, LendingPoint is on its way to $1 billion of funded loans by providing personal loans for bad credit that others had left behind. Our below LendingPoint personal loan review will show you the key benefits and drawbacks of applying.
Features of LendingPoint personal loans
Not every lender is a perfect fit for every borrower. Below, we’ll walk through some of LendingPoint’s distinguishing features that set it apart from the many other personal loan companies out there.
- Credit problems are OK -- LendingPoint is simply less selective than other personal loan companies, writing on its website that it specializes in “consumers with credit scores in the 600s.” It is also one of the few personal loans for bad credit. The company clearly says it will work with borrowers who have recent bankruptcies (must be at least 12 months since discharge).
- Low income requirements -- Of the companies that disclose income requirements, LendingPoint’s are some of the lowest. The company only requires that you have a minimum annual income of $20,000 per year, which approximates the full-time income of a minimum wage worker in many of the most populous U.S. states and cities.
- Small loan sizes -- You can get a LendingPoint personal loan for as little as $2,000 or as much as $25,000. While the maximum is well under other lenders (which will make loans in amounts up to $40,000), the $2,000 minimum is one of the lowest. This makes it a good fit for people who need to borrow sums that are too small to meet the minimums of other lenders.
- Short loan terms -- LendingPoint currently offers loans that are paid back over 24 to 48 months. So, while it doesn’t match the long repayment periods of some other lenders who offer up to 72 months, it does offer 24-month financing, which makes it unique among our picks for personal loans.
- No limits on how you use the loan -- Personal loans are primarily used to consolidate debt at a lower interest rate, but they can also be used to cover personal expenditures (unforeseen emergencies, home repairs, moving expenses, and so on). LendingPoint isn’t just a debt consolidator, though it works well for debt consolidation, too.
- Next business day funding -- Once approved, funds can be transferred to your bank account by the next business day. That’s a plus if you need to get quick access to cash.
- Getting a quote won’t hurt your credit score -- Like many other lenders, LendingPoint allows you to get a quote for a loan without a “hard pull” on your credit report. Thus, you can shop around with the peace of mind of knowing that getting a quote won’t hurt your credit score. Only upon accepting an offer will LendingPoint do a hard pull, which will then show up on your credit report.
LendingPoint personal loan vs. credit cards
Because LendingPoint specializes in borrowers who have lower credit scores, it can’t match the low APRs of other lenders who specialize in borrowers with good or excellent credit scores. That said, LendingPoint loans can be a less expensive source to consolidate credit card debt than a credit card, depending on the APR you receive.
The table below shows you how a $5,000 LendingPoint loan at an APR of 15.49% compares to a credit card at typical APRs of 18% and default APRs (what you might pay after a late payment) of 29.99%.
|Type of financing||LendingPoint Personal Loan||Credit Card (Normal APR)|
|Monthly payment (three-year payoff)||$174.53||$180.76|
|Total interest paid||$1,283.04||$1,507.43|
Of course, the math is highly dependent on how much you want to borrow, how long you’ll take to pay back the loan, and the APR you ultimately qualify for. If you are paying a high APR on existing credit card debt, a LendingPoint loan could be a money-saving way to pay off debt and pay less in interest.
The company’s less stringent requirements for borrowers come with a couple of drawbacks that prospective borrowers should know about:
- Moving due dates -- If you choose to use LendingPoint, it would be advantageous to set up automatic payments. That’s because the majority of its loans require a payment every 28 days, which means your due date will move from month to month. Given late payment fees of up to $30, you don’t want to pay late.
- Origination fees -- Borrowers who use a LendingPoint loan should be aware of the fact it charges an origination fee of 0% to 6% of the loan amount, which is either added to the amount you borrow, or subtracted from the proceeds when it is disbursed to your bank account (you choose). The best way to compare the true cost of a loan is to compare based on APR, which takes origination fees into account. To be fair, origination fees aren’t unique to LendingPoint, and they’re more common with “fair credit” lenders.
Is a LendingPoint personal loan right for you?
Still on the fence about whether LendingPoint is a good fit for you? If all the statements below apply to you, LendingPoint should likely be on your short list of companies to get a quote from.
- You have less than stellar credit -- Because LendingPoint specializes in making loans to people who have lower credit scores, it isn’t a good fit for people who have higher credit scores, who may be eligible for lower APRs from other lenders. Of course, if you are in fair credit territory, your odds of getting approved for a personal loan are likely higher with LendingPoint than the average lender.
- You need a loan quickly -- Being able to get a loan disbursement in one business day can be an advantage, particularly if you need to quickly get your hands on cash to avoid a late penalty on a bill or cure an overdraft on your checking account.
- You have a recent bankruptcy -- Bankruptcy isn’t the end of your financial world, but it will make it harder to borrow money shortly after your bankruptcy is discharged. LendingPoint is one of a few lenders that will make a loan to someone as little as 12 months removed from bankruptcy.
- You need a smaller loan -- That LendingPoint can offer loans as small as $2,000 is a big benefit over other lenders, which often have minimums twice as high. For obvious reasons, if you only need a $3,000 loan, it doesn’t make sense to apply for a loan from a company that can only issue loans sized at $5,000 or more.