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According to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2018, 39% of Americans couldn’t cover an unexpected expense of $400 with cash, savings, or a credit card paid off at the next statement.
Historically, there were few options if you didn’t have an emergency fund or credit card to fall back on for extra money. Most people had to turn to payday loans which come with hefty APRs.
Enter LendUp — a company offering a digital solution considered an alternative to traditional payday loans (although some offers are a lot like payday loans, with massive APRs).
LendUp provides short-term single payment loans to those who need immediate help, and installment loans to more seasoned borrowers who may be looking to build credit. (It also used to offer a LendUp credit card, the Arrow Card, but that offering has moved to another company — Mission Lane — as The Mission Lane Visa® Credit Card.)
The main benefit of LendUp is getting a quick, secure loan for emergency situations that pop up, even if your credit isn’t great (instead of turning to typical payday lenders). But we describe some other solutions below to look into first, however, before taking this route and incurring large amounts of interest.
In general, loans for shorter periods will have higher interest rates. So, if you use LendUp, review your options and pick the most cost-effective solution.
Here’s a snapshot of what LendUp offers (as of the publication date). Take note that the specific details will vary by applicant, loan type, and state of residence.
|Loan Types Offered||
|Average Annual Percentage Rate (APR) Range||
|Loan Amounts Available||
|Timeframe for Loan Funding||Money can be in your account by the next business day once approved.|
Essentially, LendUp offers two main types of loans — short-term loans and installments loans.
LendUp explains that applying for a short-term single payment loan won’t impact your credit scores. That’s because it doesn’t use a hard credit inquiry to check your finances for this loan type, but rather a soft inquiry. LendUp offers a quick online application and (usually) provides instant decisions 24/7.
Short-term loans are LendUp’s main product offering, but they’re only available in certain states, shown below.
LendUp also offers installment loans, but those are limited to even fewer states. Furthermore, to get an installment loan you need to progress through the LendUp Ladder by starting with short-term loans, as explained below. Installment loan applications will usually require a hard inquiry on your credit.
In addition to the approval requirements mentioned in the table above, because of the John Warner National Defense Authorization Act (which limits the APR on closed-end credit extended for 91 days or less), LendUp doesn’t currently offer short-term loans to military personnel and their dependents.
LendUp is currently (as of publication) accepting new customers for short-term loans in California, Louisiana, Mississippi, Missouri, South Carolina, Tennessee, Texas, and Wisconsin.
Long-term installment loans are available in the states above except for South Carolina.
In some states, like Texas, LendUp will not be the direct lender for certain loans, but rather is a Credit Access Business (CAB). This means it will attempt to arrange a loan between you and a third-party lender, then service that loan once it’s issued.
Get all the state-by-state loan details, guidelines, and interest rates here on LendUp’s website.
Since many of LendUp’s customers may have bad credit, the company looks outside the traditional credit bureaus to get an idea of creditworthiness.
LendUp’s website notes it uses multiple FCRA-compliant data sources. The underwriting team reviews traditional credit bureaus, non-traditional credit bureaus, and public records during the application process. LendUp also verifies your identity and assesses your ability and likelihood to repay the loan.
The loan amount you’ll qualify for depends on your individual state laws, personal eligibility, and other factors like income.
Select your state and LendUp will show you the available loan amounts, durations for loan repayment, and pricing. Depending on the state you live in, short-term loans usually range from $100–$500, while installment loans are from $100–$1,000.
Most of the loan options let you select how long you need, ranging from 8–30 days for short-term loans and 2–12 months for installment loans.
For short-term loans, LendUp suggests picking a date just after payday, so you know you’ll be covered.
Payments for short-term loans are completed via ACH transfer from the same bank account the funds were deposited into after the loan origination. This happens on the date selected by you when applying for and accepting the loan.
For installment loans, the payments happen on the agreed-upon date each month over the term of the loan (usually up to 12 months).
While on-time payments can help you build credit when reported to the three major credit bureaus, most LendUp loans aren’t reported to the major credit reporting agencies. Your credit won’t be impacted in any way, positive or negative, unless you’re a member of a higher tier in the LendUp Ladder program (and the availability for that varies by state).
LendUp only reports loan payments to the three main credit bureaus for installment loans at the Platinum and Prime levels of the LendUp Ladder (reporting is optional at Platinum and automatic at Prime).
If you’re looking to build credit history, we recommend checking out some other options like credit cards or credit builder loans, which we outline a bit later in this article.
If you’re not approved, the information regarding why will be available in your account dashboard once you log in. LendUp will send you an email once you’re eligible to reapply, but there’s no official time frame on how long that is.
After you pay off one LendUp loan, you’ll be able to get another one if you need it. You usually just have to wait approximately four days (though this can vary depending on your bank).
Some of the short-term loan options from LendUp have high APRs and are practically indistinguishable from payday loans. LendUp is a bit different from traditional payday loan lenders, however, because:
LendUp offers a helpful program called the LendUp Ladder, a way for people who successfully pay back single payment loans to qualify for installment loans at lower rates. It’s only available in the states mentioned above, though. Residents of those states can take advantage of the program by earning points to “climb the ladder.”
In addition to making on-time loan payments and paying off loans, participants can earn points by taking free financial education courses through LendUp or sharing their stories. In certain states, the highest levels of the ladder also offer credit reporting of account details and payments to the three major credit bureaus (Equifax, Experian, and TransUnion).
Here’s an example of the Ladder levels available in California:
Here’s what some sample loans through LendUp might look like in different states (based on loan amounts, fees, and interest rates available at the time of publication).
|State||Loan amount||Loan term||Repayment Amount
|State||Loan amount||Loan term||Repayment Amount
As mentioned before, exact details will vary depending on the state you live in and your eligibility.
While LendUp may be better than some traditional payday loan options because of slightly lower interest rates (in some cases) and more secure transactions online, you’ll still pay hefty amounts of interest.
Also, as previously mentioned, in most cases you won’t get the benefit of having your payments reported to the major credit bureaus.
LendUp was fined $3.63 million by the Consumer Financial Protection Bureau (CFPB) in September 2016. The CFPB found that LendUp didn’t provide the “opportunity to build credit and provide access to cheaper loans, as it claimed to consumers it would.”
LendUp hasn’t had any issues since then, though.
Regardless of whether you’re looking to cover an unexpected expense, reduce large amounts of debt, or build credit, there may be better methods available to you.
While there still aren’t many options, the emergence of fintech startups has led to more companies providing emergency loan funds. Earnin, an example of one of those startups, provides consumers with an app to get money earned at their jobs before payday. There are no fees or interest, but users can decide an amount they’ll pay (or “tip”).
While some companies can offer temporary relief (at a price), your best bet is to start building up an emergency fund today in case you face a financial hiccup or an unexpected cost hits your budget.
There are various strategies to reduce debt, including the debt avalanche and snowball methods. Also, some consumers use personal loans or balance transfer credit cards to consolidate or reduce the interest accruing from credit card debt. You’ll want to research your options and make sure you weigh any costs, like transfer fees and interest.
If you’re considering LendUp as a way to build credit, there are other options available including:
If you’re in a bind and need money immediately, LendUp can be one route to go. But interest rates are quite high, so check out other options first.
Consider making a plan for the future. Being proactive about building up an emergency fund and taking steps to pay down credit card debt can put you in a better position to cover those surprise expenses when they come up.
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