OneMain Financial personal loans: 2017 comprehensive review

OneMain Financial provides personal loans to borrowers with fair to poor credit. While the average loans tend to be smaller, it’s easier for borrowers who might not qualify at other online lenders or brick-and-mortar banks

While there are unsecured personal loans available, the application process is a little more involved. In the event that you do not qualify for an unsecured loan, you might be able to qualify for a secured as long as you provide collateral.

Who are OneMain personal loans good for?
Lending terms
Minimum borrower requirements
Fees and penalties
How to apply
What to do if you’re turned down

Who are OneMain personal loans good for?

  • Someone with below average credit.The average OneMain customer has a FICO score of 622. The average FICO score for all U.S. consumers is 695.
  • Someone with a modest income. The average annual income for a OneMain borrower tends to be somewhere in the neighborhood of $47,700.
  • Borrowers who want to file a joint application.Unlike most lenders, OneMain Financial allows for multiple borrowers on a single loan.
  • Someone who may not qualify for an unsecured loan but is willing to use their vehicle as collateral.
  • Someone who prefers a traditional banking experience. Unlike other personal lenders, OneMain borrowers need to visit a branch to complete the application process.

Who should not accept a loan

  • Anyone with good or better credit. If you a credit score of 660 or higher, you may qualify for better rates elsewhere.

Consider applying for a balance transfer credit card with a no-interest introductory period, which could help you consolidate debt for less.

If you have poor credit, you may still be able to secure a OneMain loan using your vehicle or even an RV as collateral. Doing this might make you eligible for lower APR or a bigger secured loan. However, you run the risk of losing the vehicle should you default on the loan.

Lending terms

OneMain offers loans that range from $1,500 to $25,000. Its personal loans carry a fixed annual percentage rate of 17.59% to 35.99%, depending on creditworthiness. The rate quote you receive is based on multiple factors, including credit history, the amount you’re asking for, and if you want 24, 36, 48 or even 60 months to pay it off.

To help you see if OneMain personal loans are right for you, we’ve put together this example of a potential OneMain borrower:

OneMain Financial borrower snapshot
Borrower average
Loan size $6,500
Annual percentage rate 27%
Income $47,700
Credit score 622

OneMain charges an origination fee that is built into the monthly payments. For example, if you are approved to borrow $10,000 and you’re charged a 3.5% origination fee, you’ll only receive $9,650. Keep in mind, though, that you’ll be making payments on the entire $10,000. You should factor the origination charge when calculating the total amount you’re looking to borrow. The origination fees vary by state.

Once you’re approved online, you have to go into a physical location for an in-person interview to finalize the loan. If you require collateral to secure your loan, this is the time to bring it.

Minimum borrower requirements

  • OneMain Financial does not set a minimum credit score for eligibility
  • Ability to provide collateral in the event of a secured loan
  • Creditworthiness and proof of income

As of Dec. 31, 2016, 43% of the 2.2 million outstanding loans through OneMain Financial were secured by collateral, according to a company filing.

Fees and penalties

  • OneMain charges an origination fee that varies by state. Repayment will be spread out over the life of the loan.
  • Late fees and returned payment fees vary by state.
  • You won’t be penalized for paying off your loan early.

How to apply

  1. Go to OneMain Financial’s online application and enter basic personal information.
  2. Include the desired loan amount, purpose of loan, net monthly income, employment information, if you own property, and if you have a bank account.
  3. Receive an almost instant response along with an e-mail containing more detailed information.
  4. Schedule an in-person appointment with the loan specialist to close any personal loans.
  5. Present proof of identity, employment, income, and collateral if you’re using your car or other motorized vehicle.
  6. All lenders will do a “hard” credit check which can adversely impact your credit score.

The whole process takes on average two to three days, although it is possible to receive your money the same day you apply.

How OneMain Financial compares
OneMain Lending Club
Loan amounts $1,500 to $25,000 $1,000 to $40,000
APR range 17.59% to 35.99% 5.98% to 35.89%
Origination fee Varies by state 1% to 6%
Minimum credit score No minimum 600
Time to funding Same day A week or longer
Soft check with application? Yes Yes

What to do if you’re turned down

If OneMain rejects your application and you believe your financial standing is strong enough, consider asking for clarification. The explanation could be as simple as a processing error. Or there may be a negative mark on your credit report that you need to investigate.

If your credit is weak, consider applying for a personal loan from LendUp. A secured credit card is another option, which can help you rebuild your credit.

A brief history of OneMain Financial

Unlike other personal lenders, OneMain Financial has a long history and can trace its origins to 1912 when it was called Commercial Credit and provided “working capital to manufacturers and building contractors.” Today, this hybrid online/brick-and-mortar institution provides secured and unsecured personal loans to borrowers with fair to poor credit.

OneMain Financial operates in all but six states: Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island and Vermont. They have about 1,700 branches.