LendUp Review: Loans that Can Help Borrowers Build Credit History for the Long Run

LendUp Review: Loans that Can Help Borrowers Build Credit History for the Long Run
Ashley Dull
By: Ashley Dull
Posted: March 11, 2016
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In a Nutshell: LendUp is a California-based lender that provides an improved alternative to payday loans. LendUp loans allow its borrowers, over time, to earn points toward their next loan to access more money and lower rates where available. Points are earned by responsible borrowing behavior such as paying your loan on time, and watching LendUp’s credit education videos. LendUp is fixing what’s broken about payday lending through transparent loans with no hidden fees or rollovers, and top-notch customer service.

Payday loans have always been frowned upon in the lending industry. The “fast cash and no credit check” promise offered by traditional payday lenders lure in 12 million Americans each year, according to the annual Pew Charitable Trusts Report. The high costs and fees associated with payday loans make them difficult to pay off, leading most borrowers into short-term debt traps.

LendUp is changing what’s wrong with payday loans – especially for people with less-than-perfect credit. As the first lender to provide an improved alternative to payday loans that actually advocates credit education and repair, LendUp is shifting the way the industry views payday lending. In fact, LendUp has saved customers more than $160 million in interest and fees versus traditional small-dollar lenders

We spoke with LendUp’s Head of Public Affairs, Leslie Payne, to learn more about how LendUp is disrupting the $46B payday-lending industry with its LendUp Ladder business model, and how it helps its borrowers build their credit and earn access to better loans.

Earn Points to Climb the LendUp Ladder and Access More Money and Lower Rates Over Longer Periods of Time

“One of the things that makes LendUp different is our points system. Customers earn points a number of ways, including paying back loans or taking our free credit education courses. Points translate into status levels as customers gain access to Silver, then Gold, then Platinum, then Prime-level loans,” Leslie explained.

LendUp Logo

LendUp has provided more than 1.7 million free education courses. And the points system Leslie is referring to is what’s called the LendUp Ladder; As you earn points, you could “climb” the Ladder to new levels of loans, and eventually reach LendUp loans that can help build your credit history. Earn your first 125 points when you begin your first LendUp loan.

“Each level means access to more money, at lower rates, over longer periods of time. At our Platinum and Prime levels, we can report loan payments to credit bureaus, giving our customers the chance to build their credit histories,” she said.

LendUp is not a lender referral service. It is the actual lender who you’ll be working with directly – no middleman involved – except in Texas where it is a credit access business. LendUp’s established relationships with the credit bureaus is what gives you the opportunity to build your credit history through a qualifying LendUp loan.

“I love the ladder feature. This is the only payday service I’ve used and the only one I will use because it is easy, secure, and fast.” — Brittani W., LendUp Customer

As Leslie explained, this works by making your loan payments on time. For each loan you repay on time, you’ll earn 1000 points. LendUp will report your responsible behavior from qualifying loans to the credit bureaus and it will become a part of your credit history, helping to improve your credit.

She said that most customers begin at the Silver loan level, and eventually earn access to the credit-building loans.

“It looks different in each of the 23 states in which we operate, but typically first-time customers are borrowing between $100 and $250 for between a week and a month,” she said.

The amount of points necessary to move to the next loan level varies by state and is not available in all states.

Know if You’re Approved for a LendUp Loan Instantly

LendUp has originated more than 4 million loans. and when you apply with LendUp, you always get an instant decision on loan approval.

The company’s unique underwriting process looks at hundreds of factors to determine approval, and is even able to lend to those with past bankruptcies on their credit reports.

“Our underwriting process can take into account hundreds of FCRA compliant data points to evaluate a potential borrower’s ability and willingness to repay,” said Leslie. “We have approved people with damaged credit, including bankruptcies in the last seven years, as well as people without a lot of information on their traditional credit file,” she added.

Watch LendUp’s Educational Videos to Better Understand Your Finances & Move Up the Ladder

LendUp offers 13 educational videos – all between two and five minutes each – that help its customers learn about their finances and credit, all while earning points toward their next LendUp loan.

“They cover a variety of topics from understanding your credit report to how to improve your credit score to how to protect your identity online. Our goal was to provide valuable content in an easily digestible format, and then reward customers who took courses by moving them up the Ladder faster,” Leslie said.

For each course you finish, you’ll earn 125 points. Once you complete your first six courses, you’ll receive a 250-point bonus.

5 Additional Benefits of a LendUp Loan

Aside from the LendUp Ladder and the opportunity to build your credit, LendUp offers additional benefits for its customers:

  1. Instant Decision: The application takes just five minutes, and you’ll know right away whether or not you’re approved.
  2. No Hidden Fees: Terms and conditions are transparent, and wants its customers to be “informed, not confused.”
  3. Personal Dashboard: 24/7 online access to check your loan status, extend your loan, or pay with a debit card.
  4. No Rollovers: LendUp works with its customers to ensure they’re never trapped in a vicious debt cycle.
  5. Top-Notch Customer Service: LendUp’s California-based team is willing to help via phone or email in both English and Spanish.

Hidden fees, rollovers, and the overall high cost of payday loans are why they’re so controversial in the first place — LendUp is removing the controversy from payday lending.

The Future & Product Expansion of LendUp

LendUp has helped hundreds of thousands of customers since its founding in 2012, and is rapidly growing to expand its loan offerings to all 50 states. Visit the LendUp Ladder to check availability in your area.

Photo of LendUp billboard in Times Square, NY.

In the future, Leslie told us that LendUp has ambitions of offering an entire suit of products that benefit the end consumer.

“Our goal is a suite of products where as many people as possible can get approved for a product that expands their options over time. This means a clear path to more money at better terms while also helping people build their credit histories,” she said.

LendUp payday loans are able to provide relief to the 76 percent of Americans who are living paycheck-to-paycheck, with the opportunity to build credit in the long run. To see if LendUp loans are right for you, visit LendUp.com.