NetCredit, owned by Enova International, Inc., is a Chicago-based online lender that offers personal loans for all credit profiles, including people with poor credit. In certain states, NetCredit partners with Republic Bank & Trust Company, with the bank underwriting and approving loans while NetCredit services them. NetCredit’s products have high annual percentage rates (APRs) and may come with a short loan term and an origination fee. Although NetCredit can be an option of last resort for those who can’t get a personal loan elsewhere, the exorbitantly high cost of borrowing — its maximum APR goes over 150% in certain states — means we don’t recommend this lender.
It’s also worth noting that both NetCredit’s parent company, Enova, and NetCredit’s partner bank, Republic Bank & Trust Company, are on the National Consumer Law Center’s high-cost rent-a-bank loan watch list for engaging in a practice associated with predatory lending. If you do apply for one of these loans, make sure you fully understand what you’ll be paying each month and over the loan term. But you’ll most likely find better rates and terms with any of the other lenders on our best personal loans or best personal loans for bad credit lists.
What to Know Before Getting a Personal Loan
Personal loans can be a quick way to borrow money when you need it, but it’s important to understand how they work and use them wisely. Before applying, do your research and comparison shop with multiple lenders to find the best personal loan rate. The exact loan terms you get depend on your credit score, income, and loan value.
When you’re shopping for personal loans, look for lenders that offer a prequalification with a soft credit check. This gives you a sneak peek of your loan terms without hurting your credit. After getting a rate quote, calculate your total borrowing costs including the interest and any fees. You’ll want to know exactly how much you’ll pay before taking out a personal loan.
You should also find out if a loan is a secured or unsecured loan. A secured loan uses an asset — such as a savings account, house, or car — as collateral, while an unsecured loan requires no collateral. Secured loans may offer lower interest rates, but they’re riskier because you can lose your collateral if you default on the loan.
Some lenders will let you pre-qualify for a loan or check your rate with only a soft credit inquiry, which won’t affect your credit score. Other lenders may require a hard credit inquiry, which could lower your credit score by a few points.
Compare your offers by looking at how much you’ll pay overall, including interest and fees. Then, figure out whether the monthly payment fits your budget. Once you’ve taken out a loan, be sure to make payments on time to avoid any additional fees or interest charges. Late payments can also damage your credit score.
Alternatives to Personal Loans
Although a personal loan can be a viable strategy to pay for big expenses, it’s not the only option. Some alternatives to personal loans include:
- A home equity loan, home equity line of credit (HELOC), or a cash-out refinance. As a homeowner, you can build equity by paying down your mortgage principal or waiting for your home value to increase. Then, you can use a home equity loan, HELOC, or cash-out refinance to borrow money using your home as collateral. Because these loans are secured, you may qualify for lower rates compared to an unsecured personal loan. But it also means your home is at risk if you fall behind on payments.
- A balance transfer credit card. If you’re looking to consolidate debt but you don’t want to use your home as collateral, a balance transfer credit card could be a good option. These cards typically come with an introductory 0% APR for a set amount of time, usually 15 to 18 months. But after transferring your debt to the balance transfer card, it’s important to pay off the balance before the promotional period ends. Otherwise, you’ll be on the hook for high credit card APRs.
- Personal savings. If you can hold off on your purchase, consider saving up and paying in cash rather than borrowing money. It’s also a good idea to keep an emergency fund in place for unexpected expenses.
- Credit counseling. Some of the above options might not be available if you have a low credit score or you’re seriously struggling with debt. If you need help managing your finances, consider reaching out to a non-profit organization that offers free or low-cost credit counseling. While credit counseling services won’t provide you with money directly, they can provide expert financial advice and direct you to other resources that may be able to help.
Pros and Cons of NetCredit Personal Loans
NetCredit Compared to Other Lenders
|Loan Term Range||6 to 60 months (varies by state)||3 or 5 years||3 or 5 years|
|Loan Amount||$1,000 to $15,000, (varies by state)||$2,000 to $45,000||$1,000 to $50,000 (minimums vary by state)|
|Credit Score Needed||Not advertised||540||600|
|Origination Fee||Varies by state, up to 5% of loan amount||1% to 6% of loan amount||0% to 8% of loan amount|
|Unsecured or Secured Debt||Unsecured||Unsecured||Unsecured|
Should I Get a NetCredit Loan?
While NetCredit personal loans can be an option of last resort for those who need quick cash, there are better alternatives available.
NetCredit personal loans come with high APRs, a potential origination fee, and short repayment terms, all of which drive up the costs of borrowing. While NetCredit loans are technically not payday loans — high-cost, short-term loans meant to last until your next paycheck — the APRs offered are well beyond the 36% threshold considered by the National Consumer Law Center to be predatory lending.
Take a look at one example to see how you could end up paying more than double what you borrow in interest:
Let’s say you’re approved for a $4,500 loan with a 65% APR, a 50-month loan term, and a monthly payment of $262.53. Over the course of the loan term, you wind up paying back about $13,127 total — $8,627 just in interest.
High-cost loans like these can lead to a cycle of debt that’s hard to get out of, which is why we don’t recommend NetCredit loans — or any high-cost loan — unless you truly have no other option. If you do take out one of these loans, try to make a plan to pay down the balance as soon as possible. NetCredit doesn’t charge prepayment penalties, so you won’t pay extra fees if you zero out the balance early.
Alternatives to a NetCredit Loan
There are better options for borrowing money than the NetCredit personal loan, even if your credit needs work. Here are some alternatives to a NetCredit loan:
- Bad-credit personal loans. There are other lenders who offer personal loans for people with poor credit at much more reasonable APRs. Many of them offer the option to check your rate without a hard credit inquiry, so you can easily shop around to find the best rate.
- Secured loan. If you have trouble qualifying for an unsecured loan at a reasonable rate because of your credit score, you might want to consider a secured loan. Secured loans are backed by collateral, so they’re less risky to the lender. Because of this, they may be easier to qualify for or offer lower interest rates than unsecured loans. Just be aware that you risk losing your collateral if you default on your loan.
- Withdraw from your retirement account. You may be able to withdraw from or borrow against your retirement account. Keep in mind that you may be subject to taxes and early withdrawal penalties, depending on the type of account you have and the expense you’re using the money for. While we generally don’t recommend doing this, it can be a better option than high-cost loans if you need funds in an emergency.
- Outside assistance. If you’re struggling to pay bills or living expenses, you may be able to negotiate a payment plan with your creditors or seek help from non-profit organizations. Alternatively, a friend or family member might be willing to cover you if you’re in a tight spot.
How to Qualify for a NetCredit Loan
NetCredit says it determines a borrower’s eligibility by looking at their broader financial picture, not just their credit score. While it’s not clear what that means exactly, the lender says it uses alternative data — such as the borrower’s employment and residential history — when reviewing their loan application, in addition to the information on the borrower’s credit reports.
To be eligible for a personal loan with NetCredit, borrowers must:
- Be at least 19 years old in Alabama and Delaware, 21 in Mississippi, and 18 in all other states.
- Have a valid personal checking account.
- Have an active email address.
- Have a verifiable source of income.
How to Apply for a NetCredit Loan
We don’t recommend taking out a NetCredit loan due to its extremely high APRs. However, if you’ve carefully considered the pros, cons, and alternatives and still want to proceed, you can check your eligibility for a personal loan on NetCredit’s website. You’ll need to fill out some personal information, including name, date of birth, and address, but NetCredit won’t perform a hard credit pull until you officially apply for the loan.
We recommend familiarizing yourself with the rates and terms offered by NetCredit and seeing if you can get a better deal with other lenders before applying. Be aware that NetCredit’s rates, terms, and fees may vary by state.
Is NetCredit good for personal loans?
NetCredit can be an option if you have a low credit score and don’t qualify with other lenders. But because of the high borrowing costs involved — which may include a high APR and origination fee — you should try exhausting other alternatives first. Shopping around can also help. There are other lenders who offer personal loans to people with less-than-stellar credit with much more reasonable APRs.
What credit score do you need for a NetCredit loan?
NetCredit doesn’t have a minimum credit score to qualify for a personal loan. But the lender says it looks at other areas of your financial life, such as your income and employment history, when reviewing your application. You may qualify even with a low credit score.
Can I get a NetCredit personal loan with bad credit?
If you fit the lender’s eligibility criteria, you might be able to get a NetCredit personal loan with bad credit. With a prequalification, you can check whether you’re eligible for a NetCredit loan without hurting your credit.
Does a NetCredit loan hurt your credit?
Taking out any personal loan may influence your credit in a couple of ways. The loan application usually results in a hard inquiry, which can lower your credit score temporarily. But you may improve your credit mix when you get the personal loan, which could help your credit score. Additionally, making consistent on-time payments could also improve your credit over time.