What is MoneyLion?

MoneyLion is an online personal finance management platform, including a website and app. Since its launch in 2013, it’s issued 200,000 loans to consumers. According to the website, MoneyLion has about 3 million members.

There are two levels of membership: Core, which is free and comes with checking and debit, cashback rewards and free cash advances, among other things. There’s also Plus, which costs $29 a month (besides requiring a monthly transfer of $50 into the member’s investment account) and comes with additional perks, like access to the credit-builder loan. MoneyLion members can also access BetterCash loans, which are intended for users with “less-than-stellar” credit and can be used for emergency situations or expenses that have to be paid off quickly. This review will focus on those two personal loan products.

MoneyLion personal loan highlights

• Relatively low APR for the credit-builder loan: Compared to a credit card, the credit-builder loan comes with a low rate — 5.99%. But for those with excellent credit, better personal loan APRs can be found elsewhere, often with more generous borrowing amounts. That said, the APR for BetterCash loans is over 36.00%, which is extremely high, even when compared to that of a credit card.
• Fast funding: Once approved for the loan, funds for both types of loans can be deposited as soon as the next business day. And Plus members who take out a BetterCash loan could access the new Turbo feature, which can provide funding within minutes.
• Low maximum borrowing limit for credit-builder loans: When you first join Plus, the most you can borrow through the credit-builder loan is $500, though members who stick with the platform for the long term should be able to access larger loan amounts. But that original amount is still quite low for a personal loan, and may not be enough to cover the amount required by the average consumer. The BetterCash loan, on the other hand, ranges from $500 to $5,000, making it more viable for larger expenses.

MoneyLion Personal Loan Details

Terms Fees and Penalties Term lengths: 12 months (both options available for BetterCash loan; just 12 months for the credit-builder loan) APRs: 5.99% for the credit-builder loan; over 36% for the BetterCash loan Loan amounts: $500 to $5,000 for the BetterCash loan; up to $500 for the credit-builder loan Time to funding: As soon as the next business day for both types of loans Credit check: A Soft Pull to join MoneyLion Plus, and a hard pull to take out a BetterCash loan; for credit-builder loans, MoneyLion reports late, missed and on-time payments to the credit bureaus, which can impact your score Origination fee: No origination fees for the credit-builder loan; not specified for the BetterCash loan Prepayment fee: None for either type of loan Late payment fee: Not specified Other fees: Not specified

MoneyLion product details

With a MoneyLion Plus credit-builder loan, the borrowing limit would increase over time, and members don’t need to re-apply for loans. As noted above, the Plus membership does come with a $29 monthly fee. For those who swipe through their investment account’s financial cards every day, that amount is canceled out in the form of cash back, which pays out $1 a day.

However, Plus also requires members to save $50 a month in their MoneyLion Plus investment account. It’s important to note that while your credit score is not considered during the membership application process, acceptance is not guaranteed either. Along with membership (including the free version) comes another perk: Free cash advances, which provide up to $250 of “Instacash” at 0% APR. That can be useful when you’re waiting for a direct deposit to clear and you have a bill coming up.

BetterCash loan applications, on the other hand, are subject to risk assessment and underwriting. For those loans, interest isn’t compounded or rolled over if you miss a payment.

BetterCash also comes with the option to defer a payment, which you would pay at the end of the term. And for those who can provide evidence of financial hardship, BetterCash says it will work with customers “as best we can” to ensure that you stay up to date on payments. That could translate to additional deferments or rescheduled payments. It’s also important to know that your credit history, ability to pay, existing debt, employment and residence history are considered when calculating loan amount and rate offers.

Eligibility requirements

• Minimum credit score: Not specified
• Minimum credit history: Not specified
• Maximum debt-to-income ratio: Not specified

MoneyLion Plus is available in all states, except Indiana, Iowa, Montana, Nebraska, Nevada and Vermont. According to the website, 85% of people who meet the following guidelines qualify for a Plus credit builder personal loan:

• Verified identity
• Employed with income
• Pass ability-to-pay criteria
• Checking account with a positive balance and direct deposit paychecks

To be eligible, your membership payments must also be in good standing, and you can’t have another active loan on your account. You also have to be at least 18, and while good credit is not a requirement, a soft credit pull is done when you apply.

BetterCash is available in most states, except Colorado, New York, New Jersey, Connecticut and Vermont. Applicants must be at least 18 (or 19 in Alabama or Nebraska), pass an identity check, have verifiable income, provide a valid checking account that is at least 45 days old and have income direct deposited into a checking account.

Applying for a personal loan from MoneyLion

To apply for a MoneyLion credit-builder loan, you’ll have to create a new account through the website or app. You’ll have to provide personal information like your name, address, phone number and income. You’ll also be prompted to create a password for your account, select a pay date and link a bank account. Then you’ll need to review the payment schedule and loan agreement before e-signing the agreement. Funds would then be available through your MoneyLion checking account or your debit card.

For the BetterCash loan, applicants must be able to provide:

• Social Security number
• Email address
• Home address
• Mobile number
• Date of birth
• Bank information

Some may also have to go through bank verification, which includes employment verification. The application can be filled out online. The company says it aims to have all completed applications reviewed and approved or denied within 24 hours of submission.

Pros and Cons of a MoneyLion Personal Loan

Pros Cons Credit score isn’t a necessarily a consideration factor: It’s not factored into the MoneyLion credit-builder loan application, which can be helpful to those with a low score MoneyLion app: Borrowers can easily and conveniently access their account through the app (or online) No prepayment fees: You can pay off either loan early without penalty Quick and easy access to funds: Fast approval and depositing for both loans makes it a good option for those in need of fast cash Membership requirement: The credit-builder loan can only be accessed by those who join Plus, which costs at least $50 per month itself High APR for BetterCash loan: Since the base APR is over 36.00%, the overall cost of the loan is quite high, even when compared to the average credit card Low maximum borrowing limit: The credit-building loan is quite limited with its $500 cap.

Who’s the best fit for a MoneyLion personal loan?

If you have a low credit score, a steady income and need a few hundred dollars to get by, MoneyLion’s credit-builder loan may be up to the task. It could also provide something of a security net since Plus members are guaranteed access to those loans as long as their account is in good standing and they don’t have another credit-builder loan open.

But if you’re thinking of getting the membership just to access the loan, that may not be the right move since the total cost of membership is at least $50 a month. If you can swing it, however, that would amount to $600 invested per year, plus or minus any earnings or losses. You would withdraw those funds through the app and pay a 25-cent withdrawal fee.

The BetterCash loan, on the other hand, would be best suited to those who need more than $500 and are willing to shell out money later in exchange for quick cash. The fact that it does provide a deferment and says it’s willing to work with those who experience financial hardship could be a comfort to potential borrowers. However, the extremely high APR is not to be overlooked if you want healthy finances in the long term, especially since there may be better options out there if you shop around online.

Alternative personal loan options

Peerform

Peerform is a marketplace lending platform offering personal loans to those with credit scores at or higher than 600. If you need more cash than either MoneyLion or BetterCash can offer, want a longer term to pay it back and have a couple of weeks to spare, Peerform may be right for you since it offers rates that are comparable to both loans. As long as you don’t pay by check (which comes with a $15 fee per payment), it’s a good alternative.

LendingClub

LendingClub is an online peer-to-peer lender that gives qualified applicants a range of personal loan offers. While the rates are slightly higher than MoneyLion or BetterCash, it does provide an option for those who need to stretch out their repayment and meet the credit requirement or can get a co-borrower. The origination fee is deducted from the disbursed amount, however, so you’ll need to consider that when figuring out how much to request.