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.
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LoanMe, an online lender headquartered in California, offers both small business loans (see review) 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.
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 mainly offers two different types of personal loans: “Prime Loans” for borrowers with a credit score of 760 or higher and “Less Than Prime Loans” or “Short Term Loans” for borrowers with lower credit scores.
Loan terms vary widely based on where you live, but the following table shows what you can generally expect.
|Prime Loan||Less Than Prime|
|APR||Up to 13.34%||85% – 468.25%|
|Origination Fee||17%||$0 – $500|
|Loan Amounts||$12,500 – $100,000||$600 – $20,000|
|Terms||Up to 180 months||Up to 84 months|
As you can see, LoanMe borrowers often pay a hefty price in exchange for convenience and fast funding.
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.
Downsides of LoanMe Personal Loans
LoanMe personal loans may be convenient for some borrowers but come with significant disadvantages compared to the best personal loan products.
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 lenders offer bad credit 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. Secured credit cards also usually have lower fees and interest rates, as well.
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.
Author: Melissa Horton