Is US Bank’s Simple Loan: Alternative to a payday loan From $100 to $1000
We’re going to give you the rundown on US Bank’s Simple Loan. We’ve spent years working in the lending industry and we track dozens of lenders. We’ll tell you everything you need to know to decide whether you will want to use them when you hit your next financial emergency.
US Bank is a retail bank that has locations in 28 states, primarily in the Midwest and West.
As a retail bank, US Bank offers a full suite of products. Of course it has checking and savings accounts, but it also offers auto loans, home equity loans, credit cards, and wealth management services. Today, we’ll just be talking about their Simple Loan. The first thing you need to know is that the Simple Loan is only available to US Bank customers. So, if you don’t live in one of the states that they serve, you are out of luck.
Simple Loan is an unusual product for a bank to offer.
Very few will do it. The Simple Loan will lend between $100 and $1,000. It is rare that a bank will lend less than $1,000 and unheard of for one to lend as little as $100. The reason for that is that it has traditionally been very difficult for a bank to make money on short-term loans of this size. Usually, the cost of underwriting a loan exceeds the interest you would earn. Banks also avoid charging fees over 36% in order to avoid regulatory scrutiny. This why people with more strained financial lives have few credit options. When they need money, they often have to turn to payday loans or high-cost installment loans, because these lenders are willing to charge more money. US Bank, to their credit, has attempted to solve this problem with an affordable option.
They can do this primarily because they only offer this loan to customers who have a checking account with direct deposit. This gives them visibility to your income and cash flow. They don’t need to buy data from the credit bureaus to determine your credit-worthiness.
So, how does the Simple Loan work?
You apply for the loan through the US Bank app. You can borrow up to $1,000 in increments of $100. The loan does not charge an interest rate. Instead, you pay a fee of $6 per $100 borrowed. You pay the money back in three monthly installments. The first payment will not be due any earlier than 30 days from the time you borrowed the money. So, say you borrow $400. Your fee will be $24. You will make three monthly payments of approximately $141.33. Your total repayment will be $424. Even though the loan does not have an interest rate, the cost of the loan can be represented as an APR of 35.65%.
US Bank will not charge non-sufficient funds fees or late fees. You can pay the loan off early, if you want. But because the fee is locked in, it won’t save you any money to pay it off early. You will still pay the full $6 per $100, regardless if you take the full three months or pay it off in a month.
If you want to take another loan, you need to wait 30 days after you have paid off the previous one.
So, what can you use a Simple Loan for?
Well, it is an unsecured loan, so US Bank doesn’t put any restrictions on how you use the money. For loans of this size, most people use them to cover a short-term emergency. Of course the amount isn’t enough to cover anything significant, but it could fill the gap in what you have and what you need for something like car repairs or medical expenses
I think US Bank’s Simple Loan is a great option for people who need just a little bit of money and usually have had to resort to taking out payday loans or high-interest installment loans. If you find yourself using one of these products once or twice a year, it might be worth it to become a US Bank customer to get access to this option.
It is always a good idea to shop around when you are looking for credit.
This is especially true if you have less-than-perfect credit. Each lender will have their own algorithm for deciding whether to approve you, how much to offer, and at what rate. 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 featured lenders. Behind the scenes, we will check your rate with up to 40 other lenders. Our partners use a soft credit check, so applying won’t affect your credit. We will show you all the lenders who approve you, so you can pick the loan that’s right for you.
If you have any questions about US Bank’s Simple Loan that we didn’t cover, leave a comment below and we will try and get it answered. If you found this information useful, please like this video and subscribe to our channel. It really helps us out. Thanks for watching.
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