Regional Finance introduction
Regional Finance is a consumer finance company that offers personal loans and other financial services. They are a publicly traded company. Regional Finance has been in operation since 1987 and have 346 branches across 19 states in the United States. They primarily serve borrowers who have damaged or poor credit scores.
Loan details
Regional Finance offers personal loans ranging from $500 to $25,000, with terms ranging from 18 to 60 months. What you can qualify for will depend on your personal financial situation, the state in which you live, and the details about the loan you need.
The average APR for a Regional Finance loan under $2,500 is 45%. For loans over $2,500, the average APR is 30%. So, I think you can expect an interest rate in the range of 25% to 55%.
Application process
To apply for a personal loan from Regional Finance, you can get prequalified on their website, but to complete the application you need to visit one of their branch locations. This means that you must live in one of the following states in order to be approved with Regional Finance. And even if you do live in one of these states, the nearest Regional Finance branch office may not be convenient.
Needing to go into a Regional Finance branch office serves another purpose for the company. They would like to have one of their loan officers develop a relationship with you. This gives them a chance to upsell you on other services. But, these branch employees will also reach out to you directly if you are ever late on your payments.
Will I need to buy insurance on my Regional Finance loan?
Part of Regional Finance’s business model is to have their branch associates sell you insurance. If you use household goods as collateral, they will require the collateral to be insured. They offer a range of insurance that they will encourage you to buy: life, accident and health, and involuntary unemployment.
I believe that they push you to use household goods as collateral as an incentive for you to buy the additional insurance. There is little indication that they ever repossess the collateral.
You need to know that most lenders do not require you to buy insurance. In fact, most lenders do not even offer insurance on their loans. Regional Finance pays out less than 25% of insurance premiums on claims. This tells me that they are either insuring something that is very rare or pricing that insurance too high.
Regional Finance will require you to sign multiple statements affirming that they understand that their purchase of insurance is optional, even while they are pushing you to do it. Why? Well, if insurance is required to get a loan, they must include its cost in the loan’s APR. This could actually cause their loans to be more expensive than is allowed by state law.
So, you need to recognize that the cost of insurance will add to the overall cost of the loan, because it will not be accounted for in the APR.
Eligibility requirements
Regional Finance customers typically have less-than-perfect credit profiles. The company describes them as subprime, non-prime, or near-prime consumers. I would think that this means that their customers are people with credit scores below 650.
Because Regional Finance borrowers have lower credit scores, they are often required to put up collateral to secure the loan.
Does Regional Finance offer secured or unsecured loans?
In fact, Regional Finance’s personal loans are typically secured by non-essential household goods, but may also be secured by a lien on a vehicle. While it is possible that you could qualify for one of their personal loans without security, it is more likely that you will need to provide some sort of collateral.
However, in the past, Regional Finance has admitted in government filings that the household goods that are used for collateral “are not of sufficient value to incentivize the Company to repossess the goods.” This means that they ask you to put up collateral as a psychological tool to encourage repayment and not necessarily to recoup the value of the loan if you default.
Does Regional Finance charge any fees?
Regional Finance will charge a range of different types of fee based on what is allowable in the state in which you live. You may see origination fees, acquisition fees, or account maintenance fees attached to your loan offer. If these fees are unavoidable, they should be included in the the APR.
While they are not clear on their website, customers have commented that Regional Finance does charge late fees. One customer even called them “outrageous.” So, you can expect to pay a fee if you are late on your payment.
I also found evidence that Regional Finance can be fairly aggressive in trying to collect if you have trouble paying. I suspect that this has to do with the fact that they ask their branches to service the loans that they sign. It is possible that these employees are compensated based on how their branches financially perform. You may get an employee who is particularly aggressive about collecting.
Does Regional Finance report to the credit bureaus?
Regional Finance does report your payment to the credit bureaus. A pattern of on-time payments is the most important factor to building and maintaining a good credit score. So, if you make your payments on-time consistently, a Regional Finance loan would be a positive influence on your credit score. Alternatively, if you are late on your payments, it will work against you.
Reputation and customer experience
Regional Finance has mixed online reviews from customers. The following are common themes to what customers are saying about Regional Finance online:
High-interest rates
While Regional Finance’s APRs are lower than many lenders that cater to people with poor credit scores, their rates are still significantly higher than what you would receive from banks, credit unions, or credit cards.
Targeting subprime borrowers
Some users complain that Regional Finance targets people with poor credit scores because they have limited options for accessing credit. This is certainly true as they have designed their products for subprime borrowers in mind.
Aggressive collection practices
Some customers shared stories about Regional Finance’s aggressive collection practices, including frequent phone calls and threats of legal action.
Limited online presence
Some users noted that Regional Finance has a limited online presence and requires borrowers to visit a branch location to apply for a loan, which can be inconvenient. It is important that you identify whether Regional Finance would be a convenient for you before you begin the process with them.
Better alternatives
Many users recommended exploring other options before considering a loan from Regional Finance, such as local credit unions, online lenders, or working on improving credit scores to qualify for better loan terms. This is certainly good advice. Always shop around and get the best loan terms you can qualify for.
Difficulty with payments
Some customers reported issues with making payments, such as problems with the online payment system or unexpected fees. A few users also mentioned that they struggled to keep up with payments due to the high-interest rates and their financial situations.
Communication issues
Several reviewers mentioned difficulties in communicating with Regional Finance, particularly when trying to address payment issues or request assistance. Some customers felt that the company was unresponsive or unhelpful when they needed support.
Positive experiences with branch staff
Despite the negative experiences, some customers praised the helpful and friendly staff at their local Regional Finance branches, noting that they received good service when applying for a loan or discussing their accounts in person.
As with any lender, it’s crucial to research customer experiences and carefully consider the potential benefits and drawbacks before applying.
My recommendation
If you have a credit score below 620, Regional Finance might be the best personal loan you can qualify for. However, I would not recommend you start with them. The fact that you will have to go into one of their branches to complete the loan process will mean that you might be pressured to take the loan on the spot. You might also be pressured to add insurance that is unnecessary. Before you apply with Regional Finance, try and get 2 or 3 other approvals in hand so you will be able to compare the costs and know whether you are getting the best deal you can qualify for.
In fact, you should always shop around. If you have fair, poor, or no credit score, you are especially vulnerable to expensive loans. This is because lending to people with credit scores under 620 can be challenging, so companies develop unique underwriting algorithms. That means, you should always apply to a handful of lenders before you accept an offer. You owe it to yourself to get the best deal you can.
How to shop around
At The Yukon Project, we’ve tried to make shopping around easy. If you go to our marketplace page, you can apply to any one of our premium lenders. Behind the scenes, we will check your rate with up to 40 lenders. Our partners do a soft credit check at first, so applying will not hurt your credit score. You will receive all of the offers so you can pick the one that is best for you.
