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MoneyLion Credit Builder Plus Loan Review

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MoneyLion® is an app-based, comprehensive way to manage your money. It does this by offering several financial products, such as a MoneyLion checking account, an automated investing account and — what we’ll review here — credit builder loans through its MoneyLion Credit Builder Plus loan program.

These loans might be a good option for you if you’re looking to build credit, though they work differently than traditional loans. We’ll help you understand how in this MoneyLion loan review.

MoneyLion Credit Builder Plus loan terms
What it isAn installment loan intended to help you build credit. Depending on your credit, the loan may be secured or unsecured. In the case of a secured loan, when you are approved for funds, a portion of your loan will be disbursed to you and the remainder will be held in a Credit Reserve Account to be used as collateral. Once you pay off your loan, the account and its funds are released to you.
APR range5.99% - 29.99%
Loan amountsUp to $1,000
Loan length12 months
Credit check required?No, but a soft pull when you apply for the required membership
Fees
  • Membership fee: $19.99/month
  • Origination fee: No origination fees
  • Late payment fee: None
  • Prepayment penalty: None

Time to fundingUp to 48 hours

What is MoneyLion?

MoneyLion is a fintech company that was launched in 2013. It’s not technically a bank, although it does partner with one, MetaBank, to offer the same types of financial services you’d expect from a bank.

MoneyLion offers optional financial services, including:

  • Financial Heartbeat®: This “financial fitness tracker” shows you your cash flow, spending and more to give you more insights into your finances.
  • MoneyLion Instacash: Interest-free cash advance loans of up to $250.
  • RoarMoney: A cash management account that functions in the same way as a checking account.
  • Cashback debit card: The MoneyLion Debit Mastercard® pairs with the MoneyLion app to gamify your spending. After you make a purchase of $10 or more, you can shake your phone for a chance to earn up to 100% of your purchase back. Be careful you’re not tempted to spend more with this feature, though.
  • Automated Investing: Choose from five core portfolios to invest in with automatic payments, for no monthly fee.

It also offers secured installment loans through its MoneyLion Credit Builder Plus loan program, which we’ll go through next.

MoneyLion loan reviews

MoneyLion reviews from other borrowers give the company a rating of 4.2 out of 5 stars from 17 reviews on LendingTree. Although many people are happy with the service, the most frequent complaints are that it’s difficult to get ahold of customer service.

How does MoneyLion work?

In order to fill out a MoneyLion loan application, you’ll first need to become a Credit Builder Plus member, which comes with a monthly $19.99 fee.

Aside from being able to apply for a credit builder loan, there are a few smaller benefits with membership: You’ll get access to credit-monitoring tools and regular credit score updates, though you can get those for free elsewhere. For example, LendingTree offers a free credit-monitoring service that also helps you shop loans.

Your Credit Builder Plus membership also grants access to a loyalty program that allows you to earn up to the cost of your membership ($19.99*) in cash back each month via the MoneyLion app and RoarMoney mobile banking.

How does MoneyLion’s Credit Builder Plus Loan work?

Loans like MoneyLion’s Credit Builder loan work differently from your traditional personal loan. Aside from the required monthly membership to even be eligible to apply, you’ll also only be eligible for a 12 month loan of up to $1,000. The repayment term is short and limited, while the loan amount is incredibly small.

MoneyLion also doesn’t give you the full amount of the loan upon approval; disbursement is split up into two parts. One is paid to you directly, and depending on your financial history, the other is held in a Cash Reserve Account that you get after you pay the loan off. MoneyLion uses this account as a form of collateral. If you default on the loan, they will keep this money.

It’s unclear how much money you will get upfront if approved for a loan. That means this loan won’t be ideal if you need quick access to the full amount or majority amount you’re applying for.

Pros

Cons

  • No hard credit check required
  • Potential for a low interest rate no matter your credit profile
  • Build credit as MoneyLion reports your monthly payments to the three major credit bureaus
  • Requires $19.99 monthly membership to apply
  • Loan payments are in addition to the monthly membership fee
  • May not get full access to the funds upon loan approval
  • Not available in all states*
* Credit Builder Plus is not available in Indiana, Iowa, Montana, Nebraska, Nevada or Vermont

Eligibility requirements

Basic member requirements:

  • Be at least 18
  • Have a Social Security number
  • Be a U.S. citizen or permanent resident
  • Have a valid checking account

You’ll need to submit to a soft credit check, which won’t affect your credit. You don’t need good credit (or a credit history at all) to pass this requirement. Afterward, you’ll connect the app to your bank account.

MoneyLion will use it to make a decision on whether you qualify for membership by looking at your financial transaction history. In particular, MoneyLion is looking to make sure that your account:

  • Has been open for at least 60 days
  • Is in good standing
  • Has an “acceptable balance and active transaction history”
  • Shows that you have a regular source of income

MoneyLion should let you know of its decision “almost instantly.” If you’re approved for a Credit Builder Plus membership and sign up for one, you’ll be able to apply for a MoneyLion Credit Builder Plus loan.

Applying for a credit builder loan from MoneyLion

If you’ve been approved for Credit Builder Plus membership, you can apply for a Credit Builder loan through the MoneyLion app. Unfortunately, MoneyLion doesn’t offer a lot of details on the application process for its loan. However, it does specify that you will be rejected for a loan if your personal information doesn’t match public records, and you may be asked to provide supporting documentation like a bill or bank statement to verify your identity.

Loan disbursement is fast, however. You can receive your money instantly or within 48 hours depending on how you receive funds.

Who is MoneyLion’s loan good for?

If you’re having a hard time getting approved for credit elsewhere this might be a good option to help you start building credit. While the company does a soft credit pull, there’s no hard credit check and no specific credit needed to get a loan — even people just getting started with zero credit can apply.

However, it can be a pricey loan option. You’ll need to pay a $19.99* monthly membership fee to even be eligible to apply for a loan. So while the rates appear low on the starting end (5.99% APR), they don’t take this extra fee into account that really bumps up the cost. MoneyLion also gives you relatively small loans ($1,000 or less) and you may not get access to the full amount because it might hold a portion in a Cash Reserve account in case you default.

For these reasons, MoneyLion isn’t the best choice if you’re more focused on borrowing a specific amount of money for an emergency need, like a car repair. But if you’re looking to build credit, and borrowing a small amount of cash is only a secondary goal, it could be a good solution for you.

MoneyLion FAQ

Yes, MoneyLion is a legitimate company.

MoneyLion only offers one loan: a credit builder loan. It has a 12-month term and $1,000 borrowing limit, although a portion of it will be held back depending on your financial situation so you may not actually be able to use the full amount.

Depending on how you choose to receive your money, you’ll either get it instantly or within 48 hours.

MoneyLion does a soft credit pull, which doesn’t impact your credit score. Unlike most lenders, MoneyLion won’t do a hard credit pull, even when you apply for a Credit Builder loan.

Yes, MoneyLion reports your payments to each of the three major credit bureaus.

No. In fact, you don’t need any credit at all to qualify.

Your membership will end. If you’re a member of the Lion’s Share loyalty program, you won’t earn any rewards. Keep in mind that you’ll still need to pay your loan, however — if you don’t, MoneyLion might take the Cash Reserve portion of your account to pay off the loan.

*Accurate as of January 13, 2021

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Pay Down My Debt

What Is Wage Garnishment? What You Need to Know

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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When your unpaid debt goes into collections, you’ll likely receive calls and letters from collectors urging you to pay. If your debt remains unpaid, in some cases, creditors can pursue wage garnishment as a last-ditch attempt to recoup their losses.

Wage garnishment is a legal process that allows creditors to deduct money from a borrower’s paycheck to collect their unpaid debt. If a creditor is able to secure a garnishment of wages, the employer must withhold a portion of funds from the employee’s paycheck until the debt is repaid.

How wage garnishment works

If you don’t pay back your debts, tax bills or mandated payments such as child support, creditors and lenders will try in different ways to obtain payment from you. When more subtle debt collection efforts don’t pay off, the creditor may proceed with wage garnishment — one of the most drastic methods of debt collection.

For most types of debts, if a creditor wants to garnish your wages, they must sue you and take you to court. If they win a judgment against you, they could receive a court order that allows them to garnish your wages whether you like it or not. Some forms of federal debt, such as back taxes owed to the IRS or federal student loans, can result in wage garnishment without needing to go through that legal process. Laws vary a bit from state to state, however.

Read on for more common questions and answers about how wage garnishment works.

The Consumer Credit Protection Act limits how much money can be garnished from your paycheck, though in some cases, there are differences due to state laws. If your state’s laws require a lower garnishment amount, your employer has to use that standard rather than the federal law.

In general, for garnishments other than for child support, bankruptcy or state/federal back taxes, the weekly garnishment amount can’t exceed the lesser of:

  1. 25% of the disposable earnings; or
  2. The amount by which the disposable earnings are greater than 30 times the federal minimum wage

Federal agencies can garnish up to 15% of disposable income for defaulted debts that are owed to the U.S. government, and up to 15% of disposable income can be garnished for defaulted federal student loans. According to the Department of Labor, these limits don’t apply to debts for federal or state taxes, or for certain bankruptcy court orders.

If your wages are garnished due to court orders for child support or alimony, the limits under the CCPA are different. In these cases, up to 50% of an employee’s disposable income can be garnished if they’re supporting another spouse or child. If they aren’t, their wages can be garnished up to 60%. If payments are over 12 weeks in arrears, an additional 5% can be garnished.

In 2017, the three major credit bureaus made a move to no longer display civil judgments and tax liens in the public record section of credit reports. This means a wage garnishment judgment shouldn’t appear on your credit report and therefore won’t affect your score. If it does show up on one of your credit reports, you can file a dispute to get it removed.

Possibly; some creditors may be willing to work with you. If you’re notified you’re being taken to court for wage garnishment, call the creditor and ask if there are any alternative options, such as debt settlement or debt repayment plan.

If you think the wage garnishment is inaccurate or that you don’t owe the debt, you can object at the garnishment hearing. The judge has the option of reducing or terminating the garnishment, or they can give the creditor the ability to proceed.

Once a judgment for paycheck garnishment has been issued, your employer will be notified by the court. They are supposed to begin the process of withholding the money from your paycheck and remitting it to the creditor or government as soon as possible, so the garnishment may happen as soon as your next pay period.

When your debt is fully repaid, the wage garnishment will end. While the process varies depending on the type of garnishment, your employer will typically receive a letter from the creditor or government notifying them that the garnishment can be terminated.

When your wages are garnished, they’re taken from your disposable earnings. These earnings are what’s left after legally required deductions such as taxes, Social Security and involuntary retirement contributions. It doesn’t factor in any deductions that aren’t legally required, such as union dues.

Federal benefits are usually exempted from being garnished, according to the Consumer Financial Protection Bureau (CFPB). This includes Social Security, veteran benefits, servicemember pay, federal student loan, federal retirement or disability, and so on. However, the CFPB warns that some benefits may not be exempted if the wage garnishment is for federal student loans, federal taxes or child support.

If you’re unsure of how much you still owe or how much longer your wages will be garnished, contact your creditor directly and ask for your current balance. They can let you know how much you’ve paid so far and how much you have left to go.

How much of your wages can be garnished

The amount of wages that can be garnished depends on a few factors, but most importantly, the type of debt. In general, here’s how much money can be garnished from your paycheck for each form of debt:

Type of debtHow much income can be garnished
Consumer debt, like credit cards, medical bills and personal loansThe lesser of:
  • 25% of your disposable earnings
  • Any income that exceeds 30 times the federal minimum wage

Court-ordered debt, like child support and alimonyUp to 50% if supporting another spouse or child, or up to 60% if you aren’t. Add 5% if the payments are over 12 weeks behind.
Federal student loans15%
Federal taxesVaries depending on your filing status and dependents

What to do if your creditor is pursuing garnishment

If you’re being sued by a creditor, first verify that all of the information in the lawsuit is accurate and that it isn’t a debt you’ve already repaid. If the information is correct, there are a few different ways to proceed:

Option 1: Contact your creditors to work out a payment plan

If you’ve been notified that a creditor is suing you and wants to pursue wage garnishment in court, you can try to stop the process before it starts. Call your creditors and ask if they would be willing to create a repayment plan or agree upon a settlement with you.

If you’re nervous about attempting this yourself, you could hire a nonprofit credit counselor to help advise you or help you work with your creditor. For those who can afford it, the CFPB recommends hiring a lawyer who works in consumer law or debt collection defense to help you navigate this process early on.

These proactive measures don’t always work, but they may be worth a shot to try to avoid wage garnishment. Just make sure you act quickly, since wage garnishment is difficult to undo once it’s been decided in court.

Option 2: Object to the garnishment

When you’re sued for wage garnishment, you have the right to attend the hearing and object to the process. The process varies depending on the type of debt and the state where you reside. Your garnishment papers should explain what you need to do in order to object to the decision, but if they don’t, contact the court to find out.

If the creditor is granted the court order for wage garnishment in court, you may still be able to challenge it. The documents you receive with the court order should explain how you can challenge it in court and how much time you have to do so, though you may only have a matter of days. It may be wise to employ a lawyer to help you navigate this process. If you can’t afford one, see if your area has a low-cost or free legal clinic or legal aid office.

Also, keep in mind that you will need a legitimate reason for your challenge or objection, such as that you’ve already paid the debt or you’ll experience financial hardship if it’s implemented.

Option 3: Accept the garnishment

Perhaps the lawsuit is accurate — you owe the debt, and your creditor won’t agree to a repayment plan or settlement. If you’re still able to make ends meet with the garnished wages, one option is to simply go along with the process.

It may be a hard pill to swallow, but take solace in knowing that the money coming out of your paycheck will go toward the debt you owe, and once it’s fully repaid, the garnishment will end.

Your rights in the wage garnishment process

Under the Fair Debt Collection Practices Act, a creditor can’t threaten to garnish your wages if they aren’t able to legally garnish them.

If you’re wondering how to stop wage garnishment, you may have a few options:

  • Bankruptcy: While it’s a last resort and not always advisable, filing for bankruptcy may allow you to avoid wage garnishment from consumer debts (but not court-ordered debts).
  • Claim an exemption: Some states also allow you to claim exemptions, such as a head of household exemption, if you’re the primary breadwinner for your family and can’t survive on the adjusted wages. This could either prevent the judge from granting the garnishment or reducing how much is taken from your paycheck.

Additionally, under federal law, an employer cannot fire you or take any negative actions against you if your wages are garnished for one debt. An employer also can’t refuse to hire you because of this. Be aware, however, that you are no longer protected from getting fired if your wages are garnished for a second or future debt.

As a general rule, if you’re unsure of your rights in the wage garnishment process, consider hiring an attorney, or visiting a local legal clinic or legal aid office to assist you.

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3 Best Personal Loans for Fair Credit Borrowers

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

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When determining whether to extend you a personal loan, creditors will look to your FICO Score to determine how likely you may be to repay your debt. This score is calculated on a 300 to 850-point scale using your credit history, which reveals everything from your outstanding balances to your mix of credit.

If your credit score sits between 580 and 669, you have fair credit, indicating that while you’re not the riskiest kind of borrower, you may have past blemishes or a limited history of credit usage.

Fair credit could prevent you from securing the lowest offered interest rates. But that doesn’t mean you shouldn’t consider your options. Here’s our choice for the best personal loans for fair credit among our partners, as well as what to consider before you apply.

3 best personal loans for fair credit

Payoff

APR

5.99%
To
24.99%

Credit Req.

640

Minimum Credit Score

Terms

24 and 60

months

Origination Fee

up to 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

Lender Disclosure

Payoff is a financial services firm that offers personal loans mainly to help consolidate credit card debt.... Read More


All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

If you’ve got outstanding balances on one or more credit cards, Payoff may be worth looking into. The lender offers a credit card consolidation loan, which allows you to combine multiple credit card debts into a single loan with just one bill to manage. But Payoff doesn’t offer general use personal loans, meaning you’ll need to look elsewhere if you want financing for a home repair, emergency medical procedure or other purpose.

Using Payoff, you can take out personal loans between $5,000 and $40,000, which must be paid off between 24 and 60 months. The maximum offered APR is the lowest among the three options here. Though fair credit borrowers can expect a higher APR, if your Payoff personal loan offers a lower APR than your credit cards, then consolidating can make sense.

While Payoff charges an origination fee, it doesn’t charge application fees, early or extra payment fees or late fees. To qualify, you should have a minimum credit score of 600, a debt-to-income ratio of less than 50% and at least three years’ worth of good credit history and no delinquencies.

Best Egg

APR

5.99%
To
29.99%

Credit Req.

640

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

0.99% - 6.99%

SEE OFFERS Secured

on LendingTree’s secure website

Lender Disclosure

People looking for a process that is fast and straightforward can’t go wrong when applying through Best Egg for a personal loan. ... Read More


The Annual Percentage Rate (APR) is the cost of credit as a yearly rate and ranges from 5.99% to 29.99%, which may include an origination fee from 0.99% - 6.99% that is deducted from loan proceeds. Any origination fee on a loan term 4-years or longer will be at least 4.99%. The loan term and the APR offered will depend on your credit score, income, debt payment obligations, loan amount, credit usage history and other factors. Additionally, the APR offered is impacted by your loan term and may be higher than our lowest advertised rate. Requests for the highest loan amount may result in an APR higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest rate.

*Trustpilot TrustScore as of June 2020. Best Egg loans are unsecured personal loans made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. “Best Egg” is a trademark of Marlette Funding, LLC. All uses of “Best Egg” refer to “the Best Egg personal loan” and/or “Best Egg on behalf of Cross River Bank, as originator of the Best Egg personal loan,” as applicable. The term, amount and APR of any loan we offer to you will depend on your credit score, income, debt payment obligations, loan amount, credit history and other factors. Your loan agreement will contain specific terms and conditions. The timing of available funds upon loan approval may vary depending upon your bank’s policies. Loan amounts range from $2,000–$35,000. Residents of Massachusetts have a minimum loan amount of $6,500 ; New Mexico and Ohio, $5,000; and Georgia, $3,000. For a second Best Egg loan, your total existing Best Egg loan balances cannot exceed $50,000. Annual Percentage Rates (APRs) range from 5.99%–29.99%. The APR is the cost of credit as a yearly rate and reflects both your interest rate and an origination fee of 0.99%–6.99% of your loan amount, which will be deducted from any loan proceeds you receive. The origination fee on a loan term 4-years or longer will be at least 4.99%. Your loan term will impact your APR, which may be higher than our lowest advertised rate. You need a minimum 700 FICO® score and a minimum individual annual income of $100,000 to qualify for our lowest APR.

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you.

Best Egg offers a personal loan that can be used for a variety of purposes, from debt consolidation to major purchases. In short, it’s a more flexible loan option compared to Payoff. Personal loans can be obtained for a minimum of $2,000 and maximum of $35,000.

The maximum APR of 29.99% is higher than Payoff’s, however. And to secure the lowest APRs, you’ll need a loan term under 48 months, a minimum credit score of 700 and a minimum annual income of $100,000.

To qualify for any of Best Egg’s loan, you’ll need a credit score of 640 or better, a low debt-to-income ratio and a steady source of income to prove you earn enough to repay your debts.

Peerform

Borrowers who use Peerform may obtain personal loans that can be used for just about anything. But unlike the other options listed here, Peerform relies on other people opting to invest in your project in return for interest-accruing repayments. That’s because Peerform is a peer-to-peer lending platform.

After you apply, your loan inquiry is listed on Peerform’s online marketplace where investors can evaluate it and decide if they want to put up all or a share of the needed money in return for a steady, monthly return. It’s worth noting though that individual investors are not directly making these loans to you. Rather, loans are made by Cross River Bank and people can then choose to invest with Peerform in its collection of loans.

A notable downside of using a peer-to-peer lending marketplace is a potentially slower loan application process compared to your typical lender. However, eligibility requirements can be more flexible. To qualify, you’ll need a minimum credit score of 600, a debt-to-income ratio below 40%, an open bank account and a clean credit history that includes no current delinquencies or recent bankruptcies, tax liens or collections.

Your fair credit isn’t the only factor lenders consider

Having a fair credit score means lenders will be liable to deny you the best personal loan terms, notably their lowest offered interest rates. You might not be approved for the full amount or repayment term you want, either.

But credit scores aren’t the only measure of risk lenders look to when determining whether to extend a loan. They will typically consider other factors, such as:

  • Income
  • Checking account balance
  • Current savings
  • Debt-to-income ratio

That said, high earners, those with lots of money in the bank, or those with little-to-no existing debt may qualify for better loan terms than their fair credit score initially indicates.

Before you apply, ask yourself these 3 questions

Before borrowing, do the math on your personal loan. This is especially helpful once you’ve seen the terms you prequalify for among fair credit lenders.

Play around with our personal loan payment calculator by plugging in your loan amount, the APRs you’re seeing, and repayment terms. (Your APR is a great measure of what you’ll pay to borrow, as it takes your interest rates and other fees into account.) Your budget should comfortably accommodate your new loan’s monthly payment.

If you’re seeking a personal loan for an expense that can wait, that may be your best option. Personal loan interest rates can be high for fair credit borrowers, so taking the time to raise your credit score can save you a significant amount of money.

To help boost your credit, you might try such things as paying off your bills in full and on time each month and lowering your debt-to-income ratio.

If you have a family member or friend with a high credit score, it may be worth asking them to cosign on the loan in order to get more favorable repayment terms. But you should have a plan of action for repaying the debt. That’s because your cosigner is equally on the hook for the debt. If you fall behind on payments, for example, their credit will take a hit along with yours.

Alternative loan options for fair credit

Secured personal loan

If your financial situation is holding you back, a secured personal loan may be a good alternative. For lenders, you’ll be less of a risk if your loan is backed by collateral, such as a car, savings account balance or the equity in your home. That means you could get better repayment terms than with an unsecured personal loan, as well as qualify with more lenders.

But if you default, the lender can take possession of whatever asset you put on the line. Before you get a secured loan, then, make sure you can repay the debt in full. You don’t want to be caught with a defaulted debt on top of losing your car or other asset.

Payday alternative loan (PAL)

If you belong to a federal credit union, you may be able to borrow between $200 and $1,000 from the financial institution and repay it within one to six months at a maximum annual interest rate of 28%. Credit unions have also recently begun offering another of these kinds of loans, known as a PAL II, which extends the borrowing limit to $2,000 and the repayment period to 12 months.

Leaning on a credit card

If the interest rate on your credit card is close to the interest rate you’d pay on a personal loan and your credit limit is high enough, you might consider charging the expense. After all, you’ve already been approved for this line of credit and as long as you make the minimum payment, you can repay the balance over however long you need.

A credit card’s lack of structured monthly repayment terms though could lead you to pay the debt off more slowly than you would with a personal loan, though, which can skyrocket your costs.

Methodology

To select the “best” personal loans for fair credit, we used MagnifyMoney’s personal loan marketplace on Jan. 23, 2020. We assumed the following:

  • Borrowers have a FICO Score of 580-669.
  • Loan amount of $5,000
  • ZIP code 11220

Lenders were chosen by A) lowest minimum APR and B) lowest minimum origination fee. Lenders who do not specify a minimum credit score requirement were not considered.

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