The Baltimore-based online lender, a subsidiary of financial conglomerate Citigroup, primarily offers secured and unsecured personal loans to consumers across the United States. Loan amounts range from as little as $1,500 to as much as $20,000, with larger loans generally secured by the title to a vehicle less than 10 years old. OneMain is known for fast loan approval and funding, with funds generally distributed within one business day.
If you have decent credit but still can’t get a personal loan or credit card from a traditional bank or issuer, OneMain Financial isn’t your only option. The company competes with other online lenders that offer unsecured personal loans and lines of credit, including Avant, NetCredit, and First Financial, as well as peer-to-peer (P2P) lenders like Prosper and Lending Club.
To be eligible for a OneMain loan, you need to meet the following criteria:
OneMain’s loans are available in most U.S. states. Check with OneMain Financial for the latest list of excluded states, if any, and note that the company doesn’t accept applications from U.S. overseas territories.
You must be at least 18 (19 in Alabama and Nebraska).
You must have “some sort of established credit history,” according to OneMain, and have no bankruptcy filings on your credit report. OneMain doesn’t publicly release guidelines more specific than this, though borrowers without stable employment or credit scores below 500 are unlikely to be approved.
Status With Other Lenders
Even if you’ve been turned down for a loan at a traditional lender, you may be eligible for a OneMain Financial loan. Though it doesn’t divulge proprietary details about its approval process, OneMain has less stringent lending requirements (and often lends in smaller amounts) than traditional banks.
You may be eligible for a larger loan if you agree to put your car up as collateral. A car is the only form of collateral accepted by OneMain Financial.
Rates & Principals
OneMain Financial doesn’t publish its interest rates online or reveal state-specific rates over the phone. However, borrowers with excellent credit (scores of 750 and above) can expect APRs as low as 15% on unsecured personal loans. Secured personal loans may carry lower interest rates, but OneMain doesn’t publicly reveal rate ranges for such loans. Borrowers with lower credit scores may have to pay 35% or more – significantly higher than the majority of credit card APRs.
All rates are fixed for the loan’s entire term, which can range from 24 to 60 months. OneMain doesn’t say whether rates are tied to a broader index, such as Libor, though rates do vary with the market.
Although OneMain Financial offers personal loans as large as $20,000, high-principal loans must be secured by the title to a vehicle that’s generally 10 years or newer, and they typically aren’t available to borrowers with impaired credit. In certain states, including Florida and Texas, the maximum loan size is much lower (under $10,000).
How It Works
As a potential OneMain customer, here’s what you should know about qualifying and applying for your loan, receiving loan funds, and making repayments.
Qualification, Application, and Approval
To get a OneMain loan, you first need to qualify, apply, and be approved. The application and approval process doesn’t cost anything. From start to finish, it can take anywhere from two business days to more than two weeks, depending on the length of your credit check and whether you actively negotiate loan terms with OneMain.
Qualifying for a Loan
To start, fill out an online qualification application with your contact information, employment and homeownership status, income, housing expenses, desired loan amount, and loan purpose. Using this information, OneMain runs your credit with one of the three major consumer credit reporting bureaus (Experian, Equifax, or TransUnion) and comes back with initial approval within one business day. This triggers a soft credit pull that won’t affect your credit score.
Getting Your Loan Terms & Applying
Once you receive initial approval, your application is sent to your local branch office. A loan officer from that office then contacts you, typically on the same day as your initial approval, and provides you with a detailed loan offer that includes your interest rate, term, monthly repayment, and other information.
Bear in mind that this offer may be for a smaller amount than you requested, or it may come with a higher interest rate than you think your credit score and history warrant. However, this isn’t necessarily OneMain’s final offer. Your officer should encourage you to visit your local branch in person, where you may be asked to provide additional documentation of income and assets or to put a vehicle up as collateral in exchange for more favorable terms.
Be aware that there’s an element of negotiation and brinkmanship involved here, similar to when you buy a car. The experience could be salesy as well. You may be pressured to buy loan insurance or opt for a longer term, both of which can add to your overall cost. If you find this sort of face-to-face dealing awkward, you can accept the offer and finalize the agreement online or walk away and seek to refinance with your bank.
Receiving Your Loan Funds
Once you’re approved for a OneMain loan, you’ll usually receive your funds on the business day following your approval. If you apply before 12pm Eastern Standard Time, you may receive same-day funding. Expect an origination fee of up to $300 to be bundled into your loan principal.
Funds are disbursed as a direct deposit to a bank account of your choosing, as a check sent to your address or picked up at your branch office, or as a prepaid debit card (limited to the first $10,000 only, if your loan is larger than that). You can use the funds for any personal or household expenses, but not for business or education expenses.
OneMain is unique for its seven-day satisfaction guarantee. After your loan is funded, you have seven days to return the money, with no questions asked and no fees or accrued interest, and walk away. You won’t owe any money other than the loan’s principal.
Repaying Your Loan
OneMain loans come with terms between 24 and 60 months long and a fixed monthly payment amount, based on your loan’s term and interest rate. You can set up biweekly payments as well, provided they equal or exceed the monthly payment amount.
Rates range from roughly 15% to roughly 36% APR, depending on your personal creditworthiness and prevailing interest rates, and are always fixed at origination. New loan rates vary with prevailing interest rates.
OneMain allows a variety of payment options:
- Automatic ACH or debit card payments (DirectPay)
- Manual online ACH or debit card payments
- Manual ACH or debit card payments by phone
- Checks or money orders sent by mail to OneMain’s central processing facility
- Checks and other payment methods (including debit card payments) delivered in person at a OneMain branch
- Mobile payments using OneMain’s app
You can repay your loan early at any time with no prepayment penalties; you’re responsible only for interest accrued up to the payoff date. However, OneMain applies early payments in excess of your monthly balance due to interest before principal. So partial early payments may not significantly reduce the rate at which your loan accrues interest.
If you miss a payment, you’re charged a late payment fee after a 10-day grace period and an additional fee after 30 days of delinquency. Both fees vary by state and are subject to change, so contact OneMain directly or visit a branch if you’re concerned about missed or late payments.
OneMain Financial has some noteworthy features, including a dense local branch network and a dedicated customer support team.
Unlike many competitors, OneMain Financial has a network of local branches in the states where it makes loans – hundreds of physical locations in total. OneMain owes this physical infrastructure to its ties to Citi, which itself has thousands of branches.
OneMain Financial’s customer service system can be reached by phone at 877-550-MAIN (6246). When you call this number, an automated menu connects you to a local branch office, which should be open Monday through Friday during local business hours. Exact hours vary by location.
OneMain Financial’s advantages include its local branch network, small borrowing increments, generous satisfaction guarantee, and wide availability.
1. Dense Local Branch Network
OneMain Financial has a dense network of local branches in the 44 states where it makes loans (everywhere but Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island, Vermont, and Washington, D.C.). If you have a question about your application or loan, you can call or visit your local branch office and talk to someone who lives and works in your community. Many other institutions that accept loan applications online, including Avant and Eloan, don’t have physical branches.
2. Borrow in Small Increments
You can get loans for as little as $1,500 at OneMain Financial, making it a great option if you only need a small amount. Few traditional banks offer loans this small, and many personal lenders are reticent to do so as well.
3. Wide Geographical Reach
OneMain’s loans are available in most states. Its coverage is comparable to P2P lending services such as Prosper and Lending Club and far more comprehensive than competing regional lenders.
4. Quick Funding
OneMain Financial offers same-business-day funding for loans approved early in the day. That’s a quicker turnaround than most competitors, which often don’t offer same-day funding and may even struggle to fund loans on the business day following application.
5. Generous Satisfaction Guarantee
If you get cold feet shortly after obtaining your loan, OneMain Financial’s seven-day satisfaction guarantee gives you a way out. As long as you return the money in full within two weeks of receiving it, you’re not on the hook for any additional fees or interest. The loan’s only lasting impact is the hard pull on your credit report, which can linger for two years and reduce your score by a few points.
Other online lenders, including Avant and NetCredit, offer no such guarantee. Their loans begin accruing interest immediately, so even if you pay them off quickly, you still give up more than the principal amount.
OneMain’s drawbacks include aggressive sales tactics, questionable customer service, and no business or student loans.
1. Hard Sales Tactics
OneMain’s sales tactics can be aggressive. Unlike many lenders with a significant online presence, the company requires applicants to speak with a loan officer, either in person or over the phone, before receiving funds. These conversations allow OneMain to pressure applicants into buying additional products, such as loan insurance.
They may also involve last-minute changes to loan terms, like higher rates or a collateral requirement, which OneMain’s salespeople may foist upon borrowers with the old “All your documents are approved and we’ve come too far for you to walk away now” line.
2. Questionable Customer Service
OneMain Financial claims to have a 24/7 customer service hotline, but it’s difficult to actually reach a live person. I called my local branch office several times during posted business hours and each time received a recording asking me to leave a message with my contact information and a description of what I needed. I still haven’t gotten a call back.
Though I can’t prove it, I suspect OneMain would prefer that I travel to my local branch – a few miles from where I work – and talk to someone in person, who might put me on the spot and try to sell me a loan there. That would make sense in light of the company’s preference for in-person loan origination.
This questionable level of customer support is unusual in the personal lending niche. For instance, live members of NetCredit’s national customer service team are reachable Monday through Friday between 8am and 8pm Central and 9am to 5:30pm Central on Saturday and Sunday. Live people at Avant’s main office are reachable seven days a week, though the company doesn’t post operating hours.
3. No Business or Student Loans
You can’t use a OneMain Financial Loan for any business- or education-related expenditures. Other online and P2P lenders, such as Prosper and Eloan, offer business and student loans in addition to personal loans.
OneMain Financial is one of many companies that specialize in small to medium-sized personal loans for people who might not qualify at traditional banks or are no longer able to get new credit cards. If you’re struggling with persistent credit card or medical debt and can get a loan with a lower interest rate than your current obligations, OneMain may offer welcome relief.
Before you apply, though, be sure to understand all the terms, conditions, and limitations of your loan. Don’t be afraid to walk away if your loan officer offers an unfavorable deal or seems evasive when you ask questions. Before making a final decision, it’s a good idea to shop around at other online lenders for the best rates and most favorable terms.
Have you ever applied for a loan from OneMain Financial? What did you think of the experience?