LendUp Personal Loans: 2020 Review

LendUp features

Here's a breakdown of some of the benefits and drawbacks of LendUp personal loans.

LendUp bills itself as an alternative to payday loans, but it uses a similar model. It gives cash-strapped borrowers funds in exchange for full repayment plus interest with the borrower’s next paycheck.

However, these short-term loans can lead to big-time charges. For example, a 30-day, $100 loan in the state of California can accrue a fee of $17.60, which is an annual percentage rate of just over 210 percent.

The company uses its LendUp Ladder system to determine lending rates. A repeat borrower who pays on time can earn points to “climb” the ladder, with each ascending rung allowing you to apply for a loan at better rates.

The ladder starts at Silver and progresses to Gold and then to Platinum, the tier that gets you the best rates and the option to report timely payments to the three major credit bureaus. You can climb the ladder by making payments, referring customers or taking free online education courses.

Because LendUp’s interest rates can be significantly higher than those of other lenders, if you have good credit, you should comparison-shop for your personal loan before making a choice.

LendUp snapshot

Pros and cons of LendUp personal loans

Before submitting your application for a LendUp personal loan, consider the benefits and drawbacks of the lender.

Pros:

• LendUp Ladder rewards: LendUp distinguishes itself from payday loans with the “LendUp Ladder,” a program that allows you to receive better rates and larger loans the longer you are a customer. You can earn “LendUp Ladder points” by paying back loans in a timely manner or taking free financial education courses.
• Loans for those with poor credit: Someone with a thin credit file or damaged credit might qualify for a loan from LendUp. The lender claims that good credit is not required.
• Quick processing: LendUp loans are intended for customers who need quick cash before their next paycheck — it offers funding in as little as one business day.

Cons:

• Doesn’t always report to credit bureaus: LendUp is not a good option if you’re looking to build your credit. It reports to the three major credit bureaus only once you have reached the Platinum level on the LendUp Ladder.
• Loan amount varies. If you are just starting with LendUp, the amount you are able to borrow will be lower, as you start at the bottom of the Ladder. For first-time borrowers, available loan amounts may be more limited, and as low as $100.
• Limited availability: LendUp is available in only 24 states, and it is currently not accepting new applications in many of those states.
• High APRs: LendUp’s APRs vary by state, but the lowest rate for an installment loan is currently 41.89 percent. That’s higher than the maximums for most online lenders. In some cases, a loan with LendUp may be more expensive than one with a payday lender, with some APRs climbing into the thousands.

Lending terms

LendUp offers short-term fixed-rate loans that range roughly from $100 to $250, payable in seven to 30 days, depending on the laws of the state in which you reside. In many states, LendUp also offers installment loans from about $500 to $1,000 and payable in up to five months where available. LendUp operates in 24 states: Alabama, California, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Louisiana, Maine, Minnesota, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming.

You’ll repay your loan with an additional fee, which serves as a form of interest. For example, a $250 loan in Wisconsin with a 14-day repayment period incurs a $60 fee, for a total repayment amount of $310. This would make the APR an astronomical 625.7 percent.

Fees and penalties

LendUp’s fees vary by state but may include a verification fee or insufficient funds fee. Additionally, if you repay your loan early with a debit card or if you repay your loan with a MoneyGram, an extra charge will apply.

How to apply for a loan with LendUp

LendUp does not disclose eligibility requirements, such as minimum income or minimum credit score. To apply for a loan, you’ll need a bank checking account that accepts ACH transfers and proof of employment, as well as your address, income and Social Security number.

The application process is simple. Just fill out the online form with your name, address, Social Security number and bank checking account routing number for direct deposit. In several states, you’ll also have to upload a copy of your most recent pay stub to verify your income. LendUp, like most payday lenders, performs only a soft credit check, so it won’t adversely affect your score to apply.

You’ll get a decision almost instantly, and, in most cases, LendUp offers delivery of funds into your account by the next business day. You can set up an automatic repayment from your checking account, or pay by MoneyGram, personal check or debit card.

But if your credit is strong enough, you should consider other borrowing alternatives, particularly if a short-term cash infusion isn’t necessary — many other personal loan lenders offer much better APRs and terms. If your credit is damaged, a secured credit card is another option, which can help you rebuild your credit without the huge interest charges.

How Bankrate rates LendUp

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.