Balance Credit Personal Loans Review: Beware of High Rates
Balance Credit offers unsecured personal loans to consumers in select states. While these loans can provide access to fast funding, interest rates can be in the triple-digits, making them a last resort in most cases.
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What we like:
Low minimum borrowing limit
|Rates (APR)||Not disclosed|
|Loan Terms||Up to 36 months|
|Loan Amounts||$100 – $5,000|
|Fees||Prepayment penalty: None|
One option for a personal loan with fast approval and next-day funding is Balance Credit personal loans. Headquartered in Illinois, Balance Credit is a licensed credit services organization (CSO) in Texas and Ohio; it’s also licensed to lend in a handful of other states, including New Mexico, Delaware, Illinois, Mississippi, South Carolina, Wisconsin, Missouri, Virginia, Utah, and California.
Balance Credit operates online to provide personal loans for those with less-than-ideal credit situations. It primarily offers unsecured personal loans through either a third-party lender or its own funding sources.
Although getting a personal loan from Balance Credit may be an easy process, the interest rates are well over our recommend maximum of 36%. Before taking out a loan through Balance Credit, be sure to look around for cheaper alternatives.
In this review:
Applying for Balance Credit Personal Loans
A Balance Credit personal loan is relatively easy to apply for since the entire process is completed online. To get started, a borrower simply needs to visit the Balance Credit website and provide the following required information:
- A valid e-mail address and password for account creation
- Full name
- Housing payment type (rent or own)
- Phone number
- Date of birth
- Social Security number
- Income sources
- Reason for the loan
- Bank account numbers
Balance Credit requires borrowers to be at least 18 years old, be a U.S. resident in a state where the lender operates, and have verifiable income. Once this information is provided and Balance Credit takes a look at your credit score, loan approval can be obtained in a few minutes, with funding as fast as the next business day.
Balance Credit Loan Terms, Rates, and Other Important Details
Balance Credit offers only unsecured loans, meaning no collateral is required. However, loan terms vary based on the applicant’s credit history and income.
- Loan amounts from $100 to $5,000 (minimum and maximum loan amounts vary by state)
- Repayment terms up to 36 months
- Biweekly, semi-monthly, or monthly payment schedules
- Autopay available
- No origination fees or prepayment penalties (late fees and returned check fees apply)
The amount of interest you’ll pay on a Balance Credit personal loan vary by state. For instance, let’s assume you live in Texas and request a $1,000 loan with a five-month repayment term. According to a calculator on the Balance Credit website, you’ll end up repaying a total amount of $2,147.75, which represents an annual percentage rate of 404%.
Personal loan interest rates offered in other states may be higher or lower, but overall, many Balance Credit borrowers are paying back more than twice as much as they borrowed in the first place.
For this reason, Balance Credit should be used as a last resort. You should first consider other options such as secured personal loans, secured credit cards, or bad credit personal loans with rates under 36%.
Benefits of a Balance Credit Personal Loan
Although the costs are high for Balance Credit loans, they do offer some benefits to certain borrowers:
- Individuals with less-than-perfect credit may be eligible
- Funding in as little as one business day
- Flexible repayment terms
- Streamlined application process
- No collateral required
Downsides of a Balance Credit Personal Loan
While Balance Credit personal loans have a short list of benefits, the downsides can have a much bigger impact:
- High APRs make this an extremely expensive borrowing option
- Maximum loan amounts of $5,000 mean borrowers may not be able to access all of the credit they need
- High CSO fees charged in states where Balance Credit is not an authorized lender
There is a significant risk of getting trapped in a cycle of fees and interest charges with a Balance Credit personal loan. Should you miss a payment or have a hard time keeping up with payments over the life of your loan, you may be charged additional fees that increase the cost of borrowing even further.
Balance Credit personal loans may be beneficial for borrowers who are in serious need of some quick cash. The short online application combined with fast approval and funding can be attractive to consumers who find themselves in a financial bind. However, Balance Credit personal loan applicants need to proceed with caution.
Because the total interest charges and fees associated with taking out a Balance Credit personal loan are so high, borrowers with good or excellent credit should definitely apply elsewhere.
Paying finance charges that more than double the cost of the original loan is a costly endeavor that can possibly lead to a cycle of debt that is difficult to get out from under.
Borrowers who have bad credit or no established credit should carefully understand the repayment terms offered before signing on the dotted line with Balance Credit.
Author: Melissa Horton