LoanMe Personal Loans Review — Know the Risks
LoanMe Personal Loans can be a solution for some borrowers in need of fast financing for major expenses. However, there are risks involved, including a near-predatory interest rate charged on new loans for those who have less-than-perfect credit.
LoanMe, an online lender headquartered in California, offers both small business loans and personal loans to residents of select states. Currently, borrowers in California, Delaware, Arizona, Idaho, Kentucky, Missouri, New Mexico, South Carolina, Utah, and Wisconsin are eligible to apply with LoanMe.
LoanMe personal loans are geared toward borrowers with poor credit scores who need cash fast. Unfortunately, LoanMe charges substantial interest rates and fees on new loans compared to traditional financial institutions like banks and credit unions.
As you can imagine, LoanMe’s willingness to take on borrowers with spotty credit histories is helpful to a select demographic. However, it is crucial to review the overall costs associated with these types of loans so you can understand the risks you’re taking on with a triple-digit interest rate.
Here’s what you need to know about LoanMe personal loans, including the application process, the pros and cons, and alternatives to consider along the way.
In this review:
- How to Get a LoanMe Personal Loan
- Rates, Fees, & Other Basic Info
- The Benefits of LoanMe Personal Loans
- The Downsides of LoanMe Personal Loans
Getting a LoanMe Personal Loan
One of the nice things about LoanMe Personal Loans is the breezy application process. Applicants need only provide:
- Proof of income, such as a paystub or income tax return
- Valid identification, such as a passport or driver’s license
- A recent bank statement
You can also apply for a LoanMe installment loan over the phone, although you’ll need to provide the loan agent with the required documents to finalize the application process. Once this information is received, LoanMe can approve and fund a loan in as little as three to four hours. Loan proceeds are deposited directly into your bank account.
LoanMe offers personal loans that can be used for just about any financial need, including debt consolidation, vehicle repairs, medical expenses, and other financial emergencies. Unlike secured loans, LoanMe personal loans don’t require collateral.
Basic Information: Rates, Terms, Fees, & Limits
LoanMe personal loans may be simple to get, but applicants should be aware of the terms before borrowing.
- Rates: Interest rates vary widely, but can be anywhere from 9.90% to 179%
- Terms: 180 months for prime borrowers who own their own home; for subprime borrowers, repayment periods start at 47 months
- Fees: Loan fees (also called origination fees) can range from a flat $75 to 33% of the loan amount, depending on the type of loan and your credit score; no prepayment fees
- Limits: $2,600 to $100,000, although higher loan amounts are reserved for customers with excellent credit
As you can see, LoanMe borrowers pay a hefty price in exchange for convenience and fast funding.
The Benefits of LoanMe Personal Loans
Getting a personal loan from LoanMe does offer some inherent benefits, the most notable including the ability to get funding in as little as three to four hours after applying. LoanMe also requires autopay, making it easy for you to stay current with your account. Fixed monthly payments also provide predictability in budgeting.
Overall, LoanMe personal loans may be of great benefit to borrowers who do not have strong credit or who have been turned down for a loan elsewhere.
The Downsides of LoanMe Personal Loans
LoanMe personal loans may be convenient for some borrowers but come with significant disadvantages compared to the best personal loanproducts.
High APRs and Fees
The biggest downside to working with LoanMe is the high cost of borrowing. Applicants with poor credit face both exorbitant loan fees and sky-high interest rates.
For example, a $7,600 loan made in California with a 33% loan fee, 136.42% APR, and 48-month repayment term comes with a monthly payment of $582.45. The total payback amount is nearly $28,000, while you’ll only receive slightly more than $5,000 in loan proceeds.
Borrowers who have mediocre credit may think LoanMe is a great option because of the fast funding, but the fees significantly eat away at any perceived benefits. Further, LoanMe is only available in a select few states.
Negative Customer Reviews
LoanMe may have an A+ from the BBB, but 94% of their customer reviews on the site are overwhelmingly negative. The complaints range from miscommunications and wrongful charges to crushing debt resulting from the high borrowing costs.
Alternatives to Consider
Borrowers interested in fast-cash personal loans should definitely consider their alternatives before applying with LoanMe. Checking with a bank or credit union is a logical place to start because most traditional financial institutions offer personal loans with far lower interest rates.
Additionally, some online lenders may offer personal loans without triple-digit APRs even if you have poor credit. If you have collateral, you might have a better shot at qualifying for a secured loan because you represent less risk to the lender. Credit cards are sure to come with lower fees and interest rates, too, even for a cash advance.
If you have struggled with credit issues in the past, including late payments, bankruptcies, court judgments, or collection accounts, there are a handful of bad credit personal loan options available. Because LoanMe has some of the highest fees and rates in the personal loan marketplace, it should always be considered a last resort.
LoanMe personal loans may have a low barrier to entry as well as a simple application process and fast funding, but the risks involved are high. The triple-digit interest rates are borderline predatory and can create a serious financial drain.
Before taking out a loan with LoanMe, consider your alternatives through other channels. Individuals with strong credit should look elsewhere for a personal loan, while those with credit issues may be able to find a personal loan with fewer overall costs.3.83 LoanMe Personal Loans
Author: Melissa Horton
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