OneMain Financial personal loans: 2017 comprehensive review

OneMain Financial provides secured and unsecured personal loans to borrowers with fair to poor credit who might not qualify for loans from other online lenders or brick-and-mortar banks. Its average loan tends to be somewhat smaller than what other lenders approve.

OneMain is a hybrid of an online lender and a traditional brick-and-mortar institution. While borrowers can fill out applications online and receive instant approval, they still have to meet in-person with a representative to close the deal.

The lender operates about 1,700 branches located in all but six states: Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island and Vermont.

Who is this loan good for?
Lending terms
Minimum borrower requirements
Fees and penalties
How to apply
What to do if you’re turned down

Unlike other personal lenders, OneMain 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.”

If you have damaged credit, you may only be approved for a loan by securing your vehicle as collateral. If you secure a loan with your car, motorcycle or RV you may be able to qualify for a lower APR or a bigger loan, but you also run the risk of losing your ride if you default on the loan.

Who is a OneMain personal loan 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. OneMain borrowers have an average annual income of $47,700. Real median household income in the U.S. is about $56,500.
  • Borrowers who want to file a joint application. OneMain Financial is one of a few lenders that allows multiple borrowers on a single loan. By considering multiple incomes, OneMain may approve a loan it might not otherwise have with a single applicant.
  • Someone who may not qualify for an unsecured loan but is willing to use their vehicle as collateral. If you can’t get approved for a large enough unsecured loan, OneMain allows you to reapply for a secured loan.
  • 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.

Lending terms

OneMain offers loans that range from $1,500 to $25,000. Its personal loans carry a fixed annual percentage rate of 12.99% 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 36 to 60 months to pay it off.

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

Unlike other lenders, OneMain does not set a minimum credit score for eligibility. “Our credit decisions are based on factors relating to an individual’s creditworthiness and ability to repay the loan,” a company spokesman says. “This considers factors including credit history, income and an ability to provide collateral.”

As of Dec. 31, 2016, 43% of the 2.2 million outstanding loans through OneMain 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’ll be charged a $2.95 fee for making a paying by phone using a debit card.
  • Payments may be made at a Wal-Mart service desk, but you’ll be charged a fee of $1 to $1.50 for each payment.
  • You won’t be penalized for paying off your loan early.

How to apply

OneMain Financial has a fairly straightforward online application. Enter your basic personal information along with the loan amount you want, what you’ll use the money for, net monthly income and employment information, if you own property and if you have a bank account. Based on that criteria, you’ll receive an almost instant response to your request along with an e-mail containing more detailed information about your loan.

How OneMain Financial compares
OneMain Lending Club
Loan amounts $1,500 to $25,000 $1,000 to $40,000
APR range 12.99% to 35.99% 5.99% to 35.89%
Origination fee Varies by state 1% to 6%
Minimum credit score No minimum 660
Time to funding Same day 14 days
Soft check with application? Yes Yes

Unlike other Web-based personal loan services, in order to close your loan, you have to then make an in-person appointment with the loan specialist. At this meeting, you’ll be asked to bring proof of identity, employment, income, and if you’re using your car or other motorized vehicle as collateral, you’ll usually be asked to bring that, too.

Before finalizing your loan, OneMain, like 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.

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.