NetCredit offers flexible payment options to bad credit borrowers when other lenders close the door
I’ve used peer loans several times in the past, borrowing money for debt consolidation and for emergency cash. Peer lending helped when no traditional banks would give me the time of day.
Peer loans kept me from having to resort to payday loans and falling into the cash advance trap.
But some borrowers might not be able to qualify for a peer loan. Peer lenders have tightened their credit score requirements over the last year, locking some bad credit borrowers out.
When that happens, there is still one lender to which they can turn before resorting to payday loans…a company that specializes in emergency cash for very bad credit borrowers.
NetCredit is a relatively new online lending company but has filled a huge gap left between cash advances and peer loans.
What is NetCredit Loans?
NetCredit is an online lender based in Chicago and established in 2012. It’s the online personal loans arm of Enova Financial, a lender with shares trading on the New York Stock Exchange. The company also owns one of the largest pawnshop chains in America with more than a thousand locations.
NetCredit specializes in lending money to people with bad credit, those with credit scores too low for peer loans or traditional bank loans. Interest rates are higher than peer lending but are still well below annual rates charged for cash advances and payday loans.
How Does Net Credit Work for People with Bad Credit?
NetCredit offers unsecured personal loans with a completely online process. Borrowers are assigned to one of three credit categories depending on their FICO score and credit history.
The company offers loan amounts from $1,000 up to $10,000 and for terms from six months to five years. This is longer than payday loans, which must usually be paid within two weeks easily trapping borrowers into another loan to repay the old loan.
The loan terms are comparable to peer lending where you can borrow up to seven years on some websites. Peer lenders usually allow borrowing up to $40,000 for larger loan needs while NetCredit is primarily for emergency cash.
The shorter payment option is a nice feature. Interest rates are higher than with peer lending so choose the shortest repayment terms you can afford to save on interest. I also like that the company limits the loan amount available. Again, these aren’t loans for large projects that you can go without but for money you need quickly.
NetCredit has made a name for itself as a good option for bad credit borrowers, people with credit scores too low for other loans. The company isn’t afraid to take a chance on people with poor credit and can save you from falling for the payday loan trap.
What are the Requirements for NetCredit Credit Score and Rates?
NetCredit will make loans to bad credit borrowers that other peer lenders won’t touch. The NetCredit credit score requirement is as low as 550 FICO which is well below the 620 cutoff for subprime loans.
Rates on NetCredit vary quite a bit depending on your credit score, the amount you borrow, your income and the state in which you live. These rates generally range from 35% to as high as 150% APR.
That seems very high compared to rates as low as 7% for peer loans but less than half the 500% annualized rate you’ll pay on payday loans when accounting for fees.
NetCredit loans are available in Alabama, Arkansas, California, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Mississippi, Montana, North Dakota, Nebraska, New Mexico, South Carolina, South Dakota, Utah, Virginia, Washington, and Wisconsin.
I reached out to a few borrowers for my NetCredit review and checked out some of the review sites. Borrowers are mostly happy with the loans and the service, giving the company a four-star review on Trustpilot (150 5-star reviews out of 203 total).
There are a fair amount of complaints about NetCredit as well. A lot of these are from borrowers not really understanding the interest rates when they agree to a loan. An interest rate of 85% on a $1,500 loan payable over three years will mean payments of $116 a month and nearly $2,600 in interest.
As high as that sounds, it’s still less than the amount of interest you’d pay in just one year if you had to go to a payday lender for a cash advance.
This is why I recommend all borrowers check their rate on a peer loan from PersonalLoans or Upstart. These peer lenders also extend loans to bad credit borrowers and at rates from 8% to 36% for most people. Just like NetCredit, it doesn’t affect your credit score to apply and you might save thousands in interest.
NetCredit Loan Application Process
For those borrowers that need fast cash and cannot get approved for loans at a lower rate, NetCredit can be a savior from the risks of cash advances.
The NetCredit application is completely online and takes less than two minutes. NetCredit does a soft-pull on your credit which means it won’t hurt your credit score to check your rate. You start by creating an account and answer a few questions about your income and the money you need.
The NetCredit review process provides instant approval if you qualify. The website will approve you to borrow up to a certain amount depending on your income and will quote you an interest rate. It’s important that you understand, you don’t have to borrow the full amount offered. Borrow only as much as you need and on payment terms you can afford.
If you agree to the loan, funds are usually deposited into your checking account within one day and you start making payments in a month.
One of the options that sets NetCredit apart from other lenders is its payment plan flexibility. Besides being able to pay directly from your bank account, you can also repay by credit card, money order, MoneyGram or Western Union. It’s a nice option that most other personal loan sites don’t offer.
Your payments on the NetCredit loan are reported to two credit bureaus which means your loan can help build your credit score for lower rates in the future.
NetCredit Review Summary
NetCredit isn’t my first choice for bad credit loans but can be a lifesaver if your only other option is payday lenders or a cash advance. While interest rates can be relatively high, they are still much lower than other options for emergency cash.
There are a few benefits that put NetCredit out ahead of other personal loan choices. The minimum NetCredit credit score is well below peer loan providers and works for most borrowers. There are no hidden fees or prepayment penalty for NetCredit loans.
What I liked about NetCredit loans:
- Easy application and instant approval with money deposited next day
- Credit score requirement of 550 FICO, well below other lenders
- Multiple payment options including credit card and MoneyGram
- Flexible payment terms from six months to five years
What I didn’t like about NetCredit loans:
- Higher rates than peer lenders with varying APR in different states
- Not available in all states and loan products vary
I found a lot to like during my NetCredit review but it’s definitely not for everyone. Short-term emergency cash loans should be used only as a last resort for quick cash. Borrow only what you need and pay the loan off as soon as possible. NetCredit offers the flexibility of multiple payment options and is able to help bad credit borrowers when other lenders close the door.