Elastic, offered by Republic Bank, promotes itself as being a “responsible” credit option for non-prime borrowers. It’s touted as a useful solution for consumers who might not be able to borrow money from other sources if they encounter an unexpected or emergency expense. The company also highlights what it describes as flexibility in how customers borrow money.
But as with any product, especially for non-prime borrowers, it’s important to know what’s in the fine print so you can be aware of how much this product will cost you.
How Does Elastic Work?
Elastic is a line of credit product, designed when people need access to money immediately. Potential borrowers can apply online and may receive a response immediately. For someone to apply for an Elastic line of credit, they have to enter relevant personal information, and they may be asked to submit a copy of their driver’s license or some other form of an identifying document.
Credit lines available range from $500 up to $3,500. Once someone is approved for a particular limit, they can borrow up to that anytime. While a line of credit may be available, that doesn’t mean the borrower is required to use all of it. For example, the borrower may opt just to have $100 of a $500 credit limit deposited into their checking account via direct deposit.
There are finance charges, and borrowers can create their own payment schedule. Most payment schedules are designed around when the consumer is paid. For example, if someone is paid every two weeks, they can set up a payment schedule for their line of credit reflecting this.
AutoPay is available so that repayments are drafted directly from the borrower’s bank account. If this isn’t an option, the borrower can pay via personal check, money order or certified check.
Describing themselves as being dedicated to responsible lending, Elastic does include a cooling-off period. If the borrower maintains a balance above $0 for 10 months in a row, accounts go into a cooling-off period. During that time the borrower can’t request any cash withdrawals until they’re able to maintain a $0 balance for 20 days, consecutively.
What Are the Benefits of Elastic.com?
For a lot of borrowers, there are a few primary advantages to this financial product. First, borrowers don’t have to meet the more stringent credit requirements of a traditional credit or loan product. Second, Elastic can provide funding quickly, which is useful in an emergency situation.
Elastic is relatively flexible when it comes to how funds are actually used. Borrowers can just take what they need, as long as it’s within the amount that’s available to them, and no collateral is required.
It’s a simple, straightforward process overall, which can be ideal for consumers in a difficult position.
Elastic also provides an alternative to higher-interest short-term loans. There’s a cash advance fee charged upfront, which can amount to lower costs than some other short-term loan products.
Each payment period includes a cash advance fee, which is ultimately based on the outstanding balance. Fees become lower every month while borrowers pay down the loan. In theory, it’s a less predatory version of a payday loan.
What Are the Downsides of Elastic.com?
Any short-term lending product is going to have potential downsides. In reviews, some consumers consider Elastic to be a variation on a payday loan. While an Elastic Account doesn’t accrue what they call traditional interest, there is a fee for every cash advance. There is also a minimum charge on the principal balance. That minimum charge can be as much as $270 on a principal balance ranging from $3,250.01 to $3,500.
When a customer is making a bi-weekly or semi-monthly payment, their minimum principal payment amount is the higher of either $50 or 5 percent of the principal balance. If the principal balance is less than $50, the entire balance is due. For customers who have monthly payment dates, the minimum principal payment amount is either $100 or 10 percent of the principal balance.
As with the majority of short-term loans, borrowers are likely to end up getting financing that’s expensive in the long run.
Another possible downside of Elastic is no brick-and-mortar locations, and it’s not available in every state. Some borrowers may prefer a lending service where they can visit a physical location and talk with someone in person to learn more about terms and specifics, or if an issue arises.
In online reviews, such as on the Better Business Bureau’s website, some consumers have complained about unclear fees and erroneous charges when dealing with Elastic. Before you apply for any loan, be sure you’re clear on the terms and conditions. And if you do have issues, it’s important to try to work with the lender to solve the problem. If you can’t resolve the issue with the lender, contact your state consumer agency or the Consumer Financial Protection Bureau.
There are plenty of better deals than a short-term line of credit or payday advance with much lower interest rates, including personal loans and credit cards. With that being said, for someone with less-than-optimal credit, they may have no other lending options aside from something with higher fees like Elastic. It’s not the most expensive short-term lender, and there are some advantages including the flexibility and the clear way they spell out terms and conditions.
If a consumer is considering Elastic, they should read through the terms carefully, and make sure they’re aware of all repayment terms before taking funding from an approved line of credit.
Author: Jeff Gitlen
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