Article Title: How Does This Lender Stack Up?
Short Description: They are an online lender that offers payday loans, installment loans and line of credit products. But is a loan from this lender worth it? We investigate...
Cost of Loan
This lender is an online lender that offers payday loans, installment loans and line of credit products. The lender only operates and is licensed in certain states in the U.S. Review our table above to find loan products this lender offers for your state, which includes typical APR you could expect.
User Review( vote)
- Good option for short-term cash needs in an emergency financial crisis
- Lender has been around for 10+ years
- Offers several different types of loans
- Application process is smooth and quick
- Can typically be funded within 24 business hours if approved
- Offers a savings and discount program for borrowers
- Not a good solution for long-term financing needs
- APR varies by loan product and by state, but interest rates are typically very high
- Not a good solution if you have good credit and shopping for the best rates and terms
- Lender has a C+ BBB rating. Not terrible but the reviews should give you insight
With the rise of financial technology, lending has moved more online and less in person. Having the ability to obtain all the necessary information through a secured portal, it has expedited and increased access to lending options.
In this article, we’ll take an in-depth look at CashNetUSA, which is a lender with a variety of loan options.
“Founded in 2004, CashNetUSA is a leading, state-licensed online lender that offers payday loans, installment loans and line of credit products. CashNetUSA has partnered with more than 3 million customers over the 10+ years we’ve been in business.”
Having been around for more than 15 years, this shows that the company has a solid foundation and has experience in this form of lending. Many times, you’ll find a new company form to capitalize on the trend, but you can rest assured that you’re working with a tried and true company.
Loan Rates and Terms: How Much Will it Cost?
When looking for the right lender, you’ll want to start by looking at the different rates and terms. Each lender is slightly different and since the landscape is competitive you will want to shop around. For CashNetUSA, here are their terms:
- APR varies from state to state.
- Loan amounts can vary as each state has different rules so your location can affect how much you are able to borrow.
- Loan terms again vary from state to state.
- Payments can range from one lump sum payment to six monthly installments, depending on the loan you choose to apply for.
- These loans are best for no one due to their high interest rates. Better options can be found through a credit union or your local bank.
- CashNetUSA loans are not for someone looking for competitive interest rates or a long-term financial solution.
- The current BBB rating for CashNetUSA is a C+.
- CashNetUSA has been in business since 2004.
- Some benefits to using CashNetUSA include no prepayment penalty, quick approval process, a variety of loan options and competitive rates strictly within the short-term installment loan space.
Going into the website, you must understand that these are meant for emergency situations. At the bottom of their website it states,
”Payday advances should be used for short-term financial needs only, not as a long-term financial solution. Customers with credit difficulties should see credit counseling”.
The finance charge is the amount you will pay to borrow from CashNetUSA. For example, if you were to borrow $100 for 13 days at an APR of 435.19%, it would cost you $15.50 in finance charges to borrow the money. Another example would be if you borrowed $400 and repaid it over a 6 month period at an APR of 188.60%, your finance charge would be $242.78.
To borrow with CashNetUSA you must meet the following requirements:
- Must be at least 18 years of age or older.
- Must have a verifiable, steady source of income.
- Must have an active checking account.
- Must be a U.S. citizen or permanent resident.
What Does They Claim to Do Well?
First you must remember that each state is different in what you are able to borrow. With that in mind, CashNetUSA does installment-payday loans, lines of credit and simple installment loans. Beyond that, CashNetUSA offers their customers a savings program and financial education.
The savings program states:
“We know every dollar counts. That’s why we’ve partnered with some great companies to get you exclusive discounts on everything from dining out to taxes”.
The finance education program states:
“As your financial partner, we want to ensure you have the tools you need to take control of your finances. All CashNetUSA customers get free access to our online financial education courses and interactive tools”.
No many lending organizations offer these extra tools, which can be an added benefit depending on your situation. At the very least, you’ll walk away with some financial education that can benefit you going forward, hopefully leading to a better financial situation.
Other claims that CashNetUSA offers their customers include a U.S.based customer support team that’s available 7 days a week. They also offer a free blog with various information throughout, including tips on finding affordable child care and how to separate yourself from work when at home.
Are Their Claims True?
Well, in short, the answer is yes. CashNetUSA does provide all their claims, dependent upon the state you live in as some states do not allow payday loans. Also, CashNetUSA is a part of the publicly traded company Enova International, Inc. (NYSE:ENVA).
Deep Dive Analysis
The deep dive analysis of CashNetUSA is they are a straightforward lender that offers the products mentioned earlier in this article. If we are strictly speaking in terms of short-term lending, then CashNetUSA does provide individuals with some of the more competitive rates on the market. If you were to visit your local payday lender or a tribal loan lender, you will likely find interest rates that are much higher than CashNetUSA’s offerings.
That being said, CashNetUSA is not a long-term financial solution and the company makes that very clear, both at the bottom of the page and throughout the pre-application process. They do attempt to make it a viable option in the event of an emergency and gives you the option to repay your loan early with no penalty. Overall, they appear to execute on exactly what they are offering.
If you are to look at their C+ BBB rating, it stems mainly from people who either had poor customer service or failed to read the interest rates which is solely on them, in our opinion, as CashNetUSA does clearly show what the potential interest rates may be.
What are the Actual Costs Involved?
Another question you are likely to have regarding their claim is regarding the actual costs. Depending on the lender there can be many additional “hidden” costs that aren’t favorably disclosed until the signing period of the application process.
Each state is different so you will need to visit the rates and terms page of the website and view your specific state. However, there does not appear to be anything hiding in the application process. According to their website, the finance charge is, ”…the dollar amount your loan will cost you , in addition to the amount financed”.
As far as their website states, the only finance charge you will likely find is the APR, which is the annual percentage rate you will be charged to borrow from CashNetUSA. If they do have other costs involved their website does not readily offer the information. If you apply and are approved, you’ll want to read the loan agreement carefully to determine if there are additional costs you’ll need to cover.
Alternatives to CashNetUSA
Now for the crux of this article and for anyone reading, what are the alternatives and are there any? Yes, there are certainly alternatives and there will always be variety in this space. Shopping around is critical if you have the ability to do so. However, if it’s an emergency funding situation, you may have no choice.
The first option is going through your local credit union to try and obtain a personal loan. Personal loans are an installment loan product that typically does not require collateral. In some instances you can put up collateral, but a majority do not require it.
With a personal loan, you will have competitive interest rates and reasonable monthly payments. While CashNetUSA offers their customers installment loans, the APR’s are in the triple digits. You may find personal loans to be higher than the average auto or mortgage loan, but rates typically range between 10% and 20% for a personal loan.
Another alternative would be to utilize a credit card if available. Depending on your financial situation and if you have a line of credit, using a credit card before a product from CashNetUSA would be a better alternative.
Again, credit cards have higher interest rates and many are 29.99% or lower, which is significantly less than any product from CashNetUSA. If you do not have a credit card you can look for a card that offers a zero percent introductory offer that typically ranges from 6 months up to 18 months in some cases. This gives you the ability to spend but also save up and pay off the credit card in a timely manner.
The third alternative is for homeowners that have equity in their home. If you have the ability to take out a second mortgage or home equity line of credit, this can be an effective option to utilize in the case of an emergency. Interest rates on second mortgages should be no more than 10%, unless you have less than average credit.
You can either open a line of credit, which is essentially a credit card against your home, or a fixed second mortgage which is one lump-sum that is repaid over a specific period of time. While this may not be the best option if you need money right away, if you have the time this can be an effective route.
The final alternative you can use is a peer-to-peer lending website such as LendingClub, which has been around for quite some time. LendingClub is essentially a market maker, in that they provide a loan for funding and investors come in and fund the loan.
Interest rates on these products are less than ideal but still less than CashNetUSA. Your loan request once approved will sit on the market and gain investors until the loan amount is filled. Once you are funded, you will begin repaying the note as agreed upon.
This process can take some time as you must wait for people to fund the loan but is a less expensive alternative to payday loans or short-term installment loans.
Other alternatives are asking friends and family for money, depending on the amount needed. The key is to ensure you will be able to repay the money in a timely manner.
Current State of CashNetUSA
The founder of CashNetUSA, now working as CEO for Avant was ordered to pay $3.9M by the FTC for deceiving borrower. In an article posted by the Chicago Tribune, Al Goldstein had built Avant to target the niche middle class market through two to five-year installment loan terms with interest rates as high as 35%.
While this is not a direct effect on CashNetUSA, it does bring to light the necessity to be vigilant when applying for a shorter-term note.
Another article by Fox6Now.com stated that an individual borrowed $2,600 from CashNetUSA and ended up paying more than $8,000. This is borderline loan shark and predatory lending, in our opinion. The article goes on to state that the annual percentage rates ranged from 89% up to 449%. While this isn’t out of the norm for these types of loans, it’s critical that you complete your own due diligence before signing the dotted line.
Check the loan agreement before signing. This is where you will find all the necessary information including final APR and other costs associated with the loan. Typically, loans have a right of recession period, meaning you can choose to not take the loan without penalty. If you are unhappy with the terms of the loan, simply choose not to sign the document.
The Bottom Line
There are several items to consider with a lender such as CashNetUSA. So let us review and give a bottom-line summary of the company.
First, you need to understand the product that CashNetUSA is offering. Many of the complaints you’ll find online are the high interest rates that are given to these short-term notes.
It boils down to simply reading the details. You can visit the rates and terms page and select your state from the drop down. From there you will find the ranges and products offered in your state.
However, it isn’t until you apply and receive the loan agreement where you will find the final annual percentage rate.
Secondly, these products are not intended to be long-term solutions, but rather a quick band-aid fix until you get back on your feet. Depending on the loan type you go with, you will repay your loan within a couple weeks through a few months.
It even clearly states on their website that these products are not intended for long-term financial solutions.
Thirdly, if you have the ability to select a different lending option you may be better off going that route. Begin with looking at your local credit union or bank for a personal loan.
These loans will give you what you need with competitive interest rates. If that is not an option, look into taking out a second mortgage if you have equity in your home. Again, you will have competitive interest rates with terms you can handle repaying.
Lastly, look into using a credit card you currently have or can apply for. Credit cards have higher interest rates but are still less than CashNetUSA products, especially if you can find an introductory offer card with no interest for the first few months.
So here’s the gist of CashNetUSA.
There website is very information and gives you essentially all the basic information you need to make an informed decision. They even offer their clients savings and financial education benefits. Furthermore, they have an up to date blog that offers you information on various financial topics.
However, each state is different, and you won’t know your final rates until you apply, are approved and have the loan agreement in your hand. As far as short-term lenders go, this company appears to be one of the better ones on the market, but with that being said CashNetUSA should only be used if you are in a true emergency situation and require fast cash.
As with anything, borrow responsibly and if you are unable to repay the loan it’s better to not borrow at all as that will only drive you deeper into debt.