In today’s world your credit score matters for everything, from getting a mortgage to getting a job. If you want to buy a car or get a personal loan, your credit score will be considered.  How much does your credit matter when getting a personal loan from a place like OneMain Financial? Do you know your credit score?  In 2019, the average credit score was 706, which is considered good. Yet, there are 12% of Americans who have a FICO score below 550. There are even 26 million Americans who have no credit history at all, rendering them credit invisible

If you are hoping to get a personal loan from OneMain Financial, what kind of credit score will you need? What other requirements do they have for lending? Read on to learn all about OneMain Financial and their lending practices, pros, and cons.

What Is OneMain Financial?

OneMain Financial is a lender offering personal loans. They do both secured and unsecured personal loans, available in 44 states across the United States.   OneMain Financial is generally straightforward with their offers on their website, so you can see what’s available without impacting your credit score.   People often use OneMain for personal loans for many things, including:

  • Debt consolidation
  • Wedding expenses
  • Medical expenses
  • Home improvement projects
  • Auto financing

OneMain Financial will look at your credit score and credit history when you apply. They also consider your debt to income ratio when considering your loan application.

Review Of OneMain Financial

There are few things to consider if you want to get a personal loan from OneMain Financial. This lender offers personal loans that are both secured and unsecured. They are probably a good lender, for this reason, for someone who has poor credit. They have lending terms that allow you to set up a loan and loan repayment that will work for you. 

However, their interest rates stay the same, whether you have good credit or not so good credit. Thus, they might not be the best lender for someone who has good credit and could get a loan with a better interest rate from another lender. 

Let’s dive into some of the pros and cons of OneMain Financial.

Pros Of OneMain Financial

OneMain Financial allows you to apply online for your loan. They have a pretty quick turn around time from application to funding. Sometimes, you can get a loan the same day. Mostly, you can get your loan application funded within 5 business days of applying.  They offer loan amounts as high as $20,000. Their minimum loan amount is $1,500.

This amount can even apply for an unsecured loan amount, yet they do offer secured loans too. They allow you from 24 to 60 months to repay the loan. Another positive of OneMain Financial is they don’t charge your prepayment fees if you can pay off your loan early.  In addition to secured loans, you can also get a joint loan with another person who might allow you to get a higher amount. 

People who have used OneMain Financial give it good reviews for their online and phone customer service. They also offer access to a free credit score once you are a lender.

Cons Of OneMain Financial

While OneMain Financial does give out loans to some that might not qualify with other lenders, there are some things to know about them.   Their interest rates are high when comparing them with similar lenders. Their interest rates vary from 18.00% APR on the low end to a whopping 35.99% APR on the high end. If you’re considering a loan with them, you want to know what rate you will get. 

Interestingly enough, OneMain Financial does not disclose its minimum requirements for income requirements. This can make it tricky to decide if you will be a good candidate to apply to them before actually making the application.   Since OneMain Financial is not available in all states, some of their lending practices depend on the state in which you live, so you will need to do your homework. They do charge an origination fee for the loan, which varies depending on your state. 

They will also charge you late fees for late payments. This fee will also vary depending on the state in which you live. 

OneMain Financial Loan Requirements

OneMain Financial does not choose to disclose their minimum credit requirements. Because they don’t disclose a minimum credit score, it means they consider many factors.   You might have a score slightly before that and have a high income, which might make you a candidate for one of their loans. As already stated, they also choose not to disclose their minimum income requirements. 

If you have a credit score below 600, don’t fret that you won’t qualify. Remember, OneMain also offers some secured loans. This might allow you to get a loan with a little lower score.  If you decide to go the secured loan route, you will need some type of collateral, often a car, RV, boat, or truck that you already own. 

Applying For A Loan From OneMain Financial

To apply for a OneMain Financial loan, you must be at least 18 years old. You are also required to live in one of the 44 states where they service loans.  They will want your social security number or a valid passport for identification when applying. You must be a US citizen. If you are not a US citizen, you must be a permanent resident or an immigration visa holder.

There are a variety of ways to apply both online and in-person for a OneMain loan. You can even find out if you prequalify online without it impacting your credit score. It should be noted that your credit score will be negatively impacted once you apply since they run a hard check on your credit for the application. 

If you want to do an application, you can go to the OneMain website. There you will be asked for your personal information. You will also need to supply employer information. They will also want some other details on financial information to help them know if you can actually afford to repay a loan. 

Once you have applied, you will get an email back from them about whether they can set up a loan for you. If you are approved, you must go into one of their brick and mortar locations to finalize the loan.

Interest Rates, Fees and Loan Terms

One Financial does charge pretty high-interest rates. Their loans start at 18% APR and cap out at 35.99% APR. There are loans available for those with better credit for a lower interest rate. OneMain gives a range of interest rates because they consider several factors when deciding on your loan. 

They will consider your:

  • Credit
  • Income
  • Debts
  • Where you live

Whether you get a secured or unsecured loan also factors into the decision on rates.   Some states restrict the amount you can get for an unsecured loan. So, you can’t get the full $20,000 in an unsecured loan. You would need to offer collateral and get a secured loan. Some states with limits include:

  • Florida: $8,000
  • Iowa: $8,500
  • Maine: $7,000
  • Mississippi: $7,500
  • North Carolina: $7,500
  • Texas: $8,000
  • West Virginia: $14,000

OneMain does charge an origination fee for getting a loan. This fee is dependent on the laws in your individual state. In some cases, they charge a flat fee between $25 to $400. They could also charge a percentage of the loan. This percentage can vary between 1% to 8% of your loan amount, depending on the state you live in.   They offer loans with terms from 24, 36, 48, or 60 months. The longer the loan term, the more interest you pay. Yet, taking a longer-term might make the payment more manageable. 

How Can OneMain Financial Improve?

A few advantages to OneMain is both their secured and unsecured loans. They also offer in-person services for evaluating your loan.  Yet, there are a few ways they could do better. This includes offering a better interest rate if you have a higher credit score. They currently don’t have a lower, more competitive rate for those with scores that are a little higher. 

They could also be more upfront about fees and what those would be. Often you have already completed an application, which can impact your credit before you know the fees.   Many would prefer to handle the entire loan process online versus requiring an in-person visit to one of their locations. 

What To Know About OneMain Financial

OneMain Financial does offer personal loans to those who couldn’t otherwise get loans. These loans can be costly, depending on the interest rate you get based on your credit.   If you consider a personal loan, you need to know about your credit and credit score.