OneMain Financial® is a leading lender that offers personal installment loans in most states. If you are considering a personal loan, this review will address what you need to know before applying.
First, a little background in case you are not familiar with the company. OneMain Financial® used to be known as CitiFinancial, and remains part of CitiGroup, Inc. And while they have an online loan application process, the company focuses its marketing efforts by promoting its large network of local branches.
So, if you are looking for a well regulated direct online lender that also offers one-to-one local service, OneMain Financial® probably should be at the top of your list.
OneMain Financial® offers personal installment loans, which they describe as "a credit product with fixed monthly payments, no pre-payment penalties, and is generally not secured by personal property or real estate."
You can use a personal loan from OneMain for any personal or household purposes, such as consolidating debt, paying medical bills, financing a wedding, or making home improvements or car repairs.
OneMain loans cannot be used for business purposes, tuition, or student loans.
You can choose between an unsecured and a secured loan, depending on your credit history. Unsecured loans do not require any collateral but they require better credit. If you have a lower credit score or you want a lower rate, you can use a car as collateral for a secured loan.
OneMain Financial® specializes in personal loans with an amount between $300 and $15,000, with a maximum amount that depends on the regulations in your state.
For online loans, the cap is $9,999. You will need to turn to a local OneMain Financial® branch if you need a larger loan amount.
Important Loan Terms
While all loans through OneMain Financial® have a fixed rate with fixed payments that include both principal and interest, there are actually very few upfront disclosures of available rates or terms.
The specifics of what is available to you will not be disclosed until your application and credit history are reviewed. But OneMain promises clear and easy to understand loan terms. Plus, they make a knowledgeable representative available to you to answer your questions.
While OneMain is hardly unique this process, we do wish they did a better job of disclosing a range of available interest rates and other options that may be offered. We understand that available terms will vary among customers based on their credit history and state of residence. But some level of up-front disclosure would, in our opinion, make the process less intimidating.
This shortfall, however, is more than made up for by their offer of a 14-day guarantee. If you change your mind about the loan within 14 days, you may return the loan proceeds and you will not be responsible for any interest.
Your repayment terms will depend on your loan amount and your state of residency.
If you get a loan of $5,000 to $15,000, you will likely have 48 to 60 monthly payments.
There is some flexibility in how you make payments. You can choose to make:
Online payments - and these can be one-time or recurring on a monthly or bi-weekly basis.
In-person payments at your local branch.
Mail a check.
OneMain Financial® loans have no prepayment penalty, which means you can pay off the loan early without an additional fee. Or you can just make your regular payments and have the loan amortize to zero over its normal repayment terms.
Your interest rate with One Main Financial® will range between 12.99% and 35.99% APR, depending on your creditworthiness and state of residence.
All loans from OneMain Financial® have interest that accrues daily. This means that if you make payments more often (such as bi-weekly instead of monthly), it will come out to your advantage.
However, even if you just pay the minimum each month, you will still be paying down your outstanding principal balance on a gradual basis.
Qualifying for a OneMain Financial® Loan
OneMain Financial® has a few loan requirements:
Your loan must be for family, household, or personal reasons.
You must have some credit history established with a credit score of at least 600.
You must be 18 (or 19 in Nebraska and Alabama).
You must be employed with verifiable income. You can establish your income with paystubs or a few years' worth of tax returns if you are self-employed.
You cannot have filed for bankruptcy.
Also, be prepared for questions about your monthly income and expenses. OneMain Financial® will review how you spend your money, your debt-to-income ratio, and your general cash flow, in makings its credit decision.
One tip we discovered in our research:
If you want to use the loan to pay off debt, it's best to have OneMain Financial® issue checks directly to your credit card companies. This way, OneMain will not count your credit card payments along with your new loan payment when considering your debt-to-income ratio. This will help you qualify for a bigger loan.
Note: OneMain Financial® does not accept loan applications from people who live in Arkansas, Alaska, Connecticut, Massachusetts, Nevada, Rhode Island, Vermont, or Washington, D.C.
The Application Process
You can choose to apply for your loan online (for up to $9,999) but you will still need to visit a local branch to finish the loan process. The online loan process is fairly standard and results in a hard inquiry on your credit report. Afterward, you will get an instant response letting you know if you've been approved.
If your online application is approved, you will be referred to your local branch. At this point, you will be given the opportunity to discuss your options with one of their loan specialists. You may also be required to provide additional information that OneMain can use to verify your income, address, and identity.
After your information is verified and you sign your loan documents, you will get a check that you can deposit into your bank account, or OneMain Financial® will issue checks directly to your credit card companies.
You can typically get your loan the same-day (if approved prior to Noon) or the next business day.
Unlike many lenders, OneMain Financial® offers a 14-day guarantee.
Essentially, this works like a return process. If you change your mind about the loan within 14 days, you have the option to return the loan proceeds. Your loan will be cancelled and you will not be responsible for any interest.
We are not aware of any other leading lenders offer this type of guaranty. It means you do not need to worry about a hard-sell, making a mistake, or deciding later you do not like the loan terms.
We think it is a great benefit for consumers.
The Bottom Line
OneMain Financial® is different from most online personal loan providers in that it focuses on a personal and traditional experience by focusing on interaction with local branches.
We also love that they offer of a 14-day grace period to change your mind. And we like the availability of flexible payment options and the one-on-one personal services offered by their local branches.
We highly recommend the installment loan program offered by OneMain Financial®.
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