OneMain Financial, a financial services holding firm, is a subsidiary to OneMain Holdings. The company was founded in Indiana in 1927 and currently has over 1,400 branches across 44 states.
OneMain Financial is a specialist in personal loans for nonprime consumers. This means individuals with credit scores below 659. It offers loans up to $20,000, and can issue both secured and unsecured loans. OneMain Financial might charge higher interest rates because non-prime borrowers are more likely to be a risky borrower and may require more extensive service.
OneMain Financial is a good option if you have poor credit but still need a personal loan. The option to add a coapplicant or collateral may increase your chances of getting approved for a loan. The loan cancellation policy is flexible and allows you to change your mind within 7 days. Borrowers with excellent credit may be eligible for higher rates and larger loan amounts with other lenders. They may not need collateral.
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How to Get a Personal Loan
Personal loans are attractive if you are in financial trouble, have to pay a large expense or consolidate debt. Personal loans are either secured or unsecure depending on the lender. Personal loans that are secured require collateral such as a vehicle or car to secure the loan. Unsecured loans don’t require collateral.
Personal loans should only be applied for the amount necessary to reach your goal. Personal loans may have high interest rates and fees depending on your creditworthiness. You could end up paying more than the principal. Secured loans can also lead to the loss of your property. It is important that you only borrow the amount you need and that you have a plan for repaying the loan on the due date.
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Alternatives to Personal Loans
It’s worthwhile to look at all other options before you commit to a personal loan. You can also use these financial tools:
Home equity loan, cash-out refinance loan, or home equity line credit (HELOC): If your home has equity, you can borrow against it with a loan or HELOC. You can also use a cash out refinance loan to get a second mortgage for more than what you owe on the current one, and then use the difference to pay for your expenses. You should be aware that your house is collateral for all these options. If you fail to make your payments, the bank could foreclose on your house.
An employer paycheck advance. A paycheck advance app is different than a paycheck. You may be eligible to receive a portion of your next paycheck earlier by contacting your employer’s payroll department or human resources department. Pay advances are a great option because they don’t have interest or fees and can be deducted from your next paycheck.
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You can use a balance transfer credit card. A balance transfer credit card is a way to lower your interest rates if you have high-interest credit cards debt. You’ll have 12 to 18 months depending on which card you choose to use to pay off your balance at 0% APR. If you have a balance after the intro period, the normal credit card interest rates will apply. This can be quite high.
Payday alternative loans. Credit unions may offer small-dollar loans which are cheaper than expensive payday loans. The loan can be borrowed between $200 and $2,000 with a repayment period of up to six months. Payday alternative loans can only be offered by federal credit unions. They cannot charge more that 28% APR as required by the National Credit Union Administration.
Credit counseling. A non-profit credit counseling agency can help you if you are having trouble managing your finances and are in deep debt. Credit counselors can help you create a budget plan and debt repayment plans. Look for an agency that has been approved by the United States Trustee program to ensure you find a reliable one.
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OneMain Financial: The pros and cons
Pros
- Acceptance of non-prime applicants
- Accepted co-applicants
- Assistance in person available
- No prepayment penalties
- Available same day financing
- Access to VantageScore credit scores for free
- 7-day cancellation policy
Cons
- High origination fees
- State-specific loan minimums and maximums differ.
- Sometimes collateral may be necessary
- For collateral, full coverage is required
- High APRs
- It is not available in AK. AR. CT. MA. RI.
