OneMain Financial personal loans review: Low minimum credit score, fast funding and more

Editor’s note: The Consumer Financial Protection Bureau (CFPB) has taken enforcement action against OneMain Financial for unlawful and deceptive practices. OneMain must adjust their cancellation policies, refund customers for improper charges and pay a penalty. Because of this, we can’t currently recommend OneMain as a lender.

Personal loans can be a helpful option when unexpected expenses arise. While you’ll typically need good credit to qualify for a personal loan, there are also some lenders that accept lower credit scores — including OneMain Financial. 

This lender offers both secured and unsecured personal loans that could be an ideal option for borrowers with less-than-stellar credit who are looking for relatively small loans. However, its annual percentage rates (APRs) are higher compared to some competitors that offer bad credit loans, which could increase your overall borrowing costs.

If you’re considering a personal loan from OneMain Financial, here’s what you should know.

OneMain Financial overview

Founded in 2010, OneMain Financial is the consumer finance arm of OneMain Holdings, Inc. — an established financial services firm with a history dating back to 1912 — and it provides secured and unsecured personal loans in addition to two types of consumer credit cards. 

Customer reviews of OneMain Financial are mixed. While many customers report being happy with their loans and its customer support team, some express frustration about being denied a loan and poor customer service.

Additionally, OneMain Financial is currently under investigation by the Consumer Financial Protection Bureau (CFPB) for its refunding practices on optional membership plans and insurance products that were canceled by customers. In 2022, the company received another warning from the CFPB that the agency was considering the recommendation of an enforcement action. This was due to alleged violations by the lender against the CFPB’s ban on “unfair, deceptive, or abusive acts and practices.”  

How to qualify for a OneMain Financial personal loan

Unlike most lenders that require good credit scores, you could qualify for a personal loan from OneMain Financial with a credit score of at least 560. In addition to your credit history, the lender will also consider your state of residence, loan purpose, financial history, income, debt-to-income (DTI) ratio and whether you’ve previously filed for bankruptcy when making an approval decision. Unfortunately, the lender doesn’t disclose specific qualification requirements outside of a minimum credit score. 

If you’re approved, you might be offered an unsecured loan that doesn’t require collateral or a secured loan that does (potentially for larger loan amounts). Ultimately, the loan terms you receive will depend on your individual financial profile and ability to repay the loan.

How to apply for a OneMain Financial personal loan

If you’d like to apply for a personal loan from OneMain Financial, follow these steps:

1. Compare lenders. Before applying for a loan, be sure to shop around and compare your options with not only OneMain Financial but also as many other personal loan lenders as possible. This can help you find the right loan for your needs. Many lenders — including OneMain Financial — let you prequalify with only a soft credit check that won’t hurt your credit score. Make sure to consider rates as well as other factors like loan amounts, fees, repayment terms and eligibility requirements.
2. Select a loan offer. After comparing lenders, pick the loan offer that best aligns with your needs. 
3. Complete an application. If you choose to move forward with OneMain Financial, you’ll need to submit a full application either online or at a branch location. Be prepared to provide your personal information, such as your name and email address. You’ll also need to supply requested documentation, including a government-issued ID, proof of income and proof of address. Note that the lender will perform a hard credit pull at this point, which might cause your credit score to temporarily dip by a few points.
4. Get your funds. If you’re approved, a loan specialist will discuss your options with you while also verifying your information and collateral (if applicable). Afterward, the lender will have you sign your loan agreement to release the funds to you. Depending on the funding method you choose, you could get your money as soon as the same day as approval. 

Pros of a OneMain Financial personal loan

• Accepts poor and fair credit scores.
• Fast funding.
• Permits joint applications.

Cons of a OneMain Financial personal loan

• Higher minimum APR compared to some lenders.
• Charges an origination fee as well as fees for late payments, insufficient funds and governmental charges (if permitted by law in your state).
• Not available in all states.

OneMain Financial perks and special features

Savings and discounts

Unlike some lenders that provide autopay or loyalty rate discounts, OneMain Financial doesn’t offer any ways to rate reduction discounts. Considering that the minimum APR for this lender’s personal loans is relatively high — even higher compared to other lenders that offer loans for bad and fair credit — this can be a drawback.

Keep in mind that lenders review your credit to decide if you’re a risky investment as well as to determine your rate. Borrowers with subprime credit scores (usually meaning a score below 670) are seen as riskier by lenders, which then leads to the high rates like those charged by OneMain Financial.  

If your credit score is too low to qualify with another lender, then taking out a personal loan with OneMain Financial might still be worth it despite the higher rates and lack of discounts. However, if you don’t need access to funds right away, it could be a good idea to work on improving your credit score to more easily qualify for a better rate from another lender so you can save money on your overall borrowing costs.  

Fast funding

OneMain Financial offers three ways to fund a loan, including by:

• SpeedFunds: If you have a bank-issued debit card, you can use this option to have your funds disbursed to the bank account associated with that card the same day as approval. This can come in handy if you need funds fast to cover an emergency expense. 
• ACH transfer: You can also opt to transfer the funds into a checking or savings account, which generally takes about one or two business days following loan approval.
• Check: If you apply in person and are approved, you can get a check on your loan’s closing date.

Convenient online application process

While you can apply for a personal loan at a OneMain Financial branch, you can also apply online. The lender’s site also offers a prequalification option, meaning you can check your personalized rate, loan amount and terms you might qualify for before formally applying. Note that you’ll have to enter personal information to see which terms you might be eligible for, including your email, phone number and address.

If you opt to move forward with a loan offer and complete a full application, OneMain Financial says you should receive a decision in about 10 minutes on average, depending on the time required for the verification process. Be sure to gather your personal information and documentation beforehand and fill out the application accurately to avoid any delays.

Unsecured and secured loans available

Unlike most lenders that only offer unsecured personal loans, OneMain Financial also provides secured loans. Because a secured loan requires collateral and is therefore less risky for the lender, you might qualify for a lower rate or better terms compared to what you’d get on an unsecured loan if your credit isn’t great. 

Acceptable collateral for a OneMain Financial secured loan includes:

• Cars
• Trucks
• Boats
• RVs
• Campers
• Motorcycles

Keep in mind that the lender will appraise your collateral to determine its value and if it’s sufficient to secure the loan. You’ll also have to maintain insurance on the item against physical damage over the course of the loan.

How OneMain Financial could improve

Charge lower rates and fewer fees

OneMain Financial’s personal loans come with a higher high minimum APR compared to some competitors that offer loans for bad credit. Remember that the rate you receive will depend on several factors, including your credit and income. 

This lender also charges several fees that can further increase your overall borrowing costs, including:

• Origination fee: 1% to 10% of your loan amount.
• Late fee: $5 to $30 or 1.5% to 15% of your payment amount, depending on your state.
• Insufficient funds fee: $10 to $50, depending on your state.
• Governmental fees: If you take out a secured loan, OneMain Financial might pass the fees it pays for perfecting its lien on a vehicle’s certificate of title through to you (if permitted by your state).

Offer higher loan amounts

OneMain Financial’s personal loans range from $1,500 to $20,000 — a lower maximum compared to some competitors that offer amounts as high as $50,000 or $100,000. If you need to borrow a larger sum, you’ll need to consider other lenders. 

Disclose all borrower requirements

While OneMain Financial says its minimum credit score is 560, it doesn’t disclose any other underwriting requirements, such as those for your DTI ratio and income. This lack of transparency can make it hard to tell if you’re eligible for a loan without prequalifying.

Expand lending nationwide

OneMain Financial lends in 44 states. If you live in Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island or Vermont, you’ll have to find another lender.

OneMain Financial customer service and reviews

OneMain Financial offers customer support via email and phone. To reach a representative by email, you can send a note to customerservice@omf.com. If you prefer to connect over the phone, you can call 800-525-0451 for questions about your loan application or 800-290-7002 if you have an existing loan. Customer service representatives are available from Monday to Friday, 5 a.m. to 5 p.m. Pacific Time.

Borrowers can also log into their OneMain Financial online account or download the lender’s mobile app to make payments on the go, track their balances, view statements and track their VantageScore credit score progress. 

Overall, OneMain’s customer reviews are fairly mixed. As of April 13, 2023, the company has received an impressive rating of 4.8 out of 5 stars across over 50,000 Trustpilot reviews. 

However, OneMain Financial has only earned 3.17 out of 5 stars on the Better Business Bureau (BBB) website as of April 13, 2023. It has closed 387 customer complaints through the BBB in the last year and a total of 942 complaints in the last three years. While some praise OneMain’s customer service team, others mention issues with customer service, including rudeness and unresponsiveness. 

The BBB itself has given the lender an A+ rating — though keep in mind that this rating isn’t based only on customer reviews but also other factors like time in business, type of business and transparency in marketplace conduct. 

OneMain Financial alternatives: OneMain Financial vs. Avant vs. NetCredit

While OneMain Financial’s loans have some benefits, there are also some drawbacks to consider. If OneMain doesn’t seem like the right choice for you, Avant and NetCredit, which also offer personal loans to borrowers with poor credit, might be worth considering. 

Here’s how the personal loans from each of these lenders compare:

^{All rates include discounts where noted by the lender and are current as of April 8, 2024.}

Frequently asked questions (FAQs)

What credit score do I need to qualify for a OneMain Financial personal loan?

While you need good credit to qualify for a personal loan from most lenders, you could get approved by OneMain Financial with a credit score as low as 560.

OneMain Financial also allows you to apply with a joint applicant, which could make it easier to qualify. Note that unlike a co-signer who is liable for a loan if the primary borrower fails to make payments, a joint applicant is equally responsible for repayment from the start.

Is OneMain Financial a predatory lender?

OneMain Financial is a legitimate personal loan lender that offers a similar application and approval process as other vetted lenders. While its minimum APR is higher compared to some competitors, its rates are much lower compared to other types of short-term loans. For example, payday loans — which are often considered to be predatory — can have APRs upwards of 400%.

However, keep in mind that OneMain Financial is also under investigation by the CFPB for its refunding practices on optional membership plans and insurance products that were canceled by customers. The company has also received an additional warning from the CFPB due to alleged violations of the bureau’s ban on “unfair, deceptive, or abusive acts and practices.”

Whether you’re considering a personal loan from OneMain Financial or another lender, it’s critical to make sure that the lender is legitimate and doesn’t engage in predatory lending. Some potential warning signs to watch out for include:

• Unreasonably high rates and fees.
• Lack of transparency about fees.
• Guaranteeing approval.
• Not requiring a credit check.
• Demanding upfront payments.
• Aggressively pressuring you to decide on the loan.

Ultimately, if a personal loan offer sounds too good to be true, it probably is. Make sure you’re fully comfortable with a lender before signing any agreements.

What types of loans can I get through OneMain Financial?

OneMain Financial offers unsecured personal loans as well as secured loans that require collateral, such as a vehicle. It also provides two types of credit cards.

Will getting a loan through OneMain Financial hurt my credit?

When you apply for a personal loan, OneMain Financial (and any other lender) will perform a hard credit check to determine your creditworthiness. This can cause a slight drop in your credit score — typically five points or less. Note that this is usually only temporary, and your score will likely bounce back within a few months.

Additionally, taking out a personal loan might end up having a positive impact on your credit. For example, if you make all of your payments on time or are able to diversify your credit mix, you could see an improvement in your credit score over time.