Besides, if the premise of the loan is that you don’t have enough room in your budget to make it until payday, how will you suddenly have the room next time to pay back the loan amount plus interest? The more payday loans you borrow, the less money you’ll be able to use out of each future paycheck.
But there are times when you might need help, which is challenging if you don’t have an emergency fund or other credit to fall back on. And if your credit score is low, it’s not exactly easy to get inexpensive loans. So if these loans are a necessary evil for some, are there any responsible versions available?
Online lender LendUp would say yes. While the interest rates are in the typical payday loan range, the company touts practices that help customers work their way toward better rates.
Here’s how it works, along with information from other LendUp reviews, and details about the company’s recent legal issues.
The lowdown on LendUp
So what is LendUp, exactly? Describing itself as a “socially responsible lender,” LendUp provides short-term credit to those who might not qualify for prime financial products.
While this isn’t very different from traditional payday lenders, LendUp distinguishes itself by also offering customers ways to improve their financial situation.
- LendUp offers a 30-day extension on single-payment loans to help borrowers who can’t pay it all back at once.
- The LendUp Ladder helps borrowers earn points to become eligible for better rates and payment reporting to the credit reporting bureaus.
- Borrowers can earn these points by paying off their loan, taking financial education courses online through LendUp, referring a friend, and more.
LendUp isn’t available throughout the U.S. Below are the states LendUp works in as of now.
- Single payment loans and installment loans
- Single payment loans only
- Installment loans only
- South Carolina
There are other states where LendUp has previously offered products but isn’t currently taking applications: Alabama, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Maine, Minnesota, New Mexico, Oklahoma, Oregon, Utah, Washington, and Wyoming.
LendUp specializes in short-term credit but offers it in a variety of ways. You can use LendUp to get a credit card, a single-payment loan, or an installment loan. The amount you can borrow for a single-payment loan, which is the product that most resembles a payday loan, depends in part on the state you live in. The maximum amount of an installment loan is $1,000.
Credit cards aren’t available to everyone as of right now, though you can be waitlisted by entering your email address on the LendUp credit cards page. And if you’ve already received an offer code from LendUp, you can enter it on the same page to start your application.
As mentioned above, LendUp offers courses to help its borrowers earn points to climb up the ladder towards better interest rates and reporting to your credit bureau, which can help you build your credit score. The LendUp education platform has a variety of videos, with topics including credit building, understanding your rights, the cost of credit and more.
Using the LendUp platform
LendUp has an online platform from which you can manage your loans. This is where you can upload application documents, such as proof of income, check the status of your application, and make payments.
The interface earns mixed reviews from customers. Some LendUp reviews report that applying is fast and easy, while others complain of occasional technical glitches, some of which LendUp might be slow to fix.
It’s important to know that LendUp currently has a notice on its website warning customers of scammers trying to imitate the company. LendUp doesn’t charge money upfront — if you receive an interaction that you’re not sure of, call LendUp at 1-855-2LENDUP or email email@example.com.
If you’re using LendUp and need to contact customer service, you can do so via the number listed for your state on the contact page.
LendUp interest rates and fees
Since LendUp doesn’t originate the loans and credit cards they offer, the interest rates will vary. You can check their rates and notices page to see what kind of rates you might be able to get in your state.
The fees LendUp can charge also vary by state. For single-payment loans, fees currently range from $25 to $45 per loan up to a maximum of 25 percent of the amount borrowed.
Fees for installment loans also come in different ranges and with different names. You might see what’s basically an origination fee referred to as an “administrative fee” or a “Credit Access Business (CAB) fee.” The amounts go from nothing at all to $50, or 5 percent of the loan amount all the way up to $24 to $40 per $100 borrowed.
These fees don’t include the interest rates, which also change based on the loan type and the state in which you’re borrowing. The general range sits at an APR of just more than 100% all the way up to more than 1000% on single-payment loans. Installment loans come in at 35% interest rates and up to more than 200%.
LendUp eligibility requirements
Good credit isn’t required for LendUp’s single payment loans. Below are the basic requirements.
- Being at least 18 years old
- Proof of recurring income
- An active checking account that accepts ACH transfers
- Residency in a state in which LendUp operates
You also need to have a working email address and a valid phone number that can accept incoming calls. Note that active-duty military members and their dependents are not eligible to receive credit via LendUp.
If you apply for a loan and are declined, you can log into your dashboard to find out why.
LendUp reviews on the customer service experience
Although LendUp calls itself a socially responsible lender, LendUp reviews on customer service point to some major room for improvement. The company currently has a C+ rating with the Better Business Bureau (BBB). And, thanks to recent legal trouble — more on this below — LendUp has lost its accreditation with the BBB.
The customer service feedback given in LendUp reviews points to large communication issues as well as some technical problems on the website. Some customers giving negative feedback via CreditKarma and the BBB said that it can be difficult to reach LendUp agents via telephone and that the company doesn’t always respond promptly to emails.
Several LendUp reviews complain that the company doesn’t always update information promptly to show repaid loans, and that LendUp sometimes debits an account twice for a single payment.
That said, there are also good reviews in which customers say they’ll use the product again. Some LendUp borrowers acknowledge the high interest rates but say that’s what they expect for this kind of product, as it caters to those who might not eligible for more favorable rates. In fact, some of the positive reviewers say they’ve been using the company for years and plan to continue to do so.
So what about this legal trouble? In September of 2016, the Consumer Financial Protection Bureau (CFPB) ordered LendUp to pay $3.63 million for not delivering on the benefits advertised. Violations included not reporting to credit reporting agencies as advertised, misleading customers about the product offerings and interest rates available to them, and reversing interest rates without proper disclosure.
In an interview with TechCruch last year, LendUp CEO Sasha Orloff said the violations stemmed from “legacy issues that mostly date back to our early days as a company. … In those days we didn’t have a fully built out compliance department. We should have.”
Orloff said that the company has since addressed the issues.
Deciding if LendUp’s products are right for you
Based on some of the LendUp reviews, it’s clear there may be risks involved — some of the same risks that exist with many payday lenders. It’s already difficult to get out of a payday loan cycle. That would only be made worse by working with a company that’s not quickly responsive if you run into trouble with your account.
However, LendUp does offer a chance to extend your single-payment loan without going deeper into debt from excessive fees. And if you work to build points and climb the LendUp Ladder, you might be able to free yourself from the initially (very) high interest rates.
Some might also see this as a tool to build credit when their own credit is new or damaged. But if this is the case with you, you might want to consider the much-lower-interest option of a secured credit card. And if your credit score is high enough for traditional personal loans rather than payday loans, that might be a much easier and more seamless process for you.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|5.99% – 24.99%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|