Metabank Loans: What Are Your Options?

On 10 November 2020, Oportun and MetaBank announced a partnership to make affordable and responsible personal loans available across the nation. MetaBank is a national bank and subsidiary of Meta Financial Group, Inc. that offers a range of financial products and services, including prepaid cards and payment solutions such as ACH origination and wire transfers. Oportun, on the other hand, is a mission-driven Community Development Financial Institution (CDFI) that provides inclusive and affordable financial services to low- and moderate-income (LMI) individuals. By partnering with MetaBank, Oportun aimed to expand its reach and make its loans available to a wider range of consumers. This partnership highlights both organisations' commitment to financial inclusion and serving underserved communities.

Oportun and MetaBank partnership

On November 10, 2020, Oportun, a mission-driven Community Development Financial Institution (CDFI), announced a partnership with MetaBank, a national bank, to make affordable and responsible personal loans available to consumers across the nation. The partnership is expected to launch in mid-2021, offering affordable personal loans capped at a 36% APR for low- and moderate-income (LMI) individuals with limited or no credit history.

Oportun has been able to provide affordable loans to an LMI segment of the market that has been previously excluded from or underserved by mainstream financial institutions. By reporting to the major credit bureaus, Oportun helps its customers build a credit history and move forward in their financial journeys. Since its inception, the company has helped more than 860,000 people establish a credit history.

MetaBank, a subsidiary of Meta Financial Group, is a leader in providing innovative financial solutions to underserved consumers and businesses in niche markets. The bank believes in financial inclusion for all and works with various industries to help them grow their businesses and build profitable customer relationships. As one of the largest issuers of prepaid cards in the US, having issued over a billion cards, Meta also offers a comprehensive payments services solution.

The partnership between Oportun and MetaBank is aligned with their shared belief in the importance of responsible financial services for LMI communities. Through this collaboration, they aim to make affordable credit more accessible, helping individuals and families build a better future.

Short-term lending

MetaBank, in partnership with Oportun, offers affordable and responsible personal loans to consumers across the nation. This program specifically targets low- and moderate-income (LMI) individuals with limited or no credit history, providing them with financial access and opportunities to build a credit history.

To apply for a short-term loan, you can complete an online request form, and you will be connected with direct or secondary lenders who can provide rapid cash, typically within the next business day. The whole process is automated and usually completed in a few simple steps, including providing basic personal information and your bank details.

It is important to note that while short-term lending can be a convenient solution for temporary financial needs, it is essential to understand the associated fees and ensure you have the means to repay the loan by your next paycheck to avoid potential financial difficulties.

Cash advance on income

In 2020, MetaBank announced a partnership with Oportun, a mission-driven financial institution, to make affordable and responsible personal loans available to consumers across the nation. The partnership aimed to offer affordable personal loans to low- and moderate-income (LMI) individuals with limited or no credit history.

Income-based loans are personal loans that focus on income rather than credit score. They are more accessible to borrowers with minimal credit history or bad credit. Lenders who approve income-based loans are primarily concerned with the borrower's ability to repay the loan with their income. These loans are also known as payday loans and can be obtained from payday loan companies or cash advance apps. Payday loans have strict loan terms and typically require full payment within a short period. When taking out a payday loan, it is important to understand the fine print to avoid late fees and further debt.

Cash advance apps, also called payday advance apps, allow users to borrow money in advance of their paycheck. Some popular cash advance apps include Albert, Chime, and Dave. These apps may offer features such as financial insights, budgeting tools, and credit-building options. However, it is important to note that cash advance apps may have eligibility requirements, subscription fees, and transfer fees.

Overall, income-based loans and cash advance apps can provide financial flexibility for individuals with limited credit history or those facing short-term financial difficulties. However, it is crucial to carefully consider the requirements, fees, and potential risks associated with these options before proceeding.

Lenders' requirements

In 2020, MetaBank, a national bank and subsidiary of Meta Financial Group, Inc., announced a partnership with Oportun, a mission-driven Community Development Financial Institution (CDFI), to make affordable and responsible personal loans available across the nation.

Credit Score

Your credit score is one of the most important factors in determining your eligibility for a loan. A lower credit score may suggest that you are a risky borrower, and lenders may protect themselves from this risk by increasing interest rates, shortening terms, or asking for collateral. Most lenders also require several years of credit history to qualify for a loan.

Income

Lenders typically require a specific monthly or annual income to ensure you can make loan payments. Proof of income could include paycheck stubs, tax returns, disability benefits statements, alimony, or Social Security payments. Your debt-to-income (DTI) ratio is also important, as it shows lenders how much of your monthly income goes toward your current debts. While it is generally recommended to keep your DTI ratio below 43%, most lenders prefer ratios of 35% or lower.

Collateral

Secured personal loans require collateral, which can be physical assets like real estate, vehicles, or jewellery, or financial assets like cash accounts or investment portfolios. If you fail to repay the debt, the lender can seize the collateral. Unsecured personal loans do not require collateral, but they usually come with higher interest rates.

Identification and Other Documents

Lenders must be able to verify your identity to approve your loan, so you will typically need to provide two forms of identification, such as a birth certificate, driver's license, or Social Security card. Additionally, lenders may require documentation to verify your income, such as tax returns, W-2s, or bank statements.

Loan Purpose

Lenders may also consider the purpose of the loan and your monthly expenses when evaluating your application. Some loan programs have restrictions on how the funds can be used, so it is important to check with the lender to ensure your loan purpose is eligible.

Loan eligibility

In 2020, MetaBank, a national bank and subsidiary of Meta Financial Group, Inc., announced a partnership with Oportun, a mission-driven financial institution, to make affordable and responsible personal loans available to consumers across the nation. The loans are capped at a 36% APR and are designed for low- and moderate-income (LMI) individuals with limited or no credit history.

Credit Score and Credit History

Your credit score is a significant factor in evaluating your loan eligibility. Lenders use your credit score to assess your creditworthiness, or how likely you are to repay the loan. A higher credit score generally indicates lower risk to the lender and can lead to better loan terms, such as a lower interest rate. Most lenders have a minimum credit score requirement, and a score above 640 is often considered favourable for accessing the best loan terms. Late payments can negatively impact your credit score and may reduce your chances of loan approval or result in higher interest rates.

Income and Employment Status

Lenders will consider your income and employment status to determine your ability to repay the loan. They may have a minimum income requirement and evaluate your debt-to-income (DTI) ratio, which compares your total debt to your total income. A high DTI may indicate that you are overextended financially and may struggle to repay the loan. For pensioners, some lenders offer pension loans that use their pension as proof of steady income.

Collateral

In some cases, lenders may require collateral, also known as security, for a loan. Collateral is an asset that the borrower pledges as a guarantee for the loan. If the borrower defaults on the loan, the lender can seize the collateral to recoup their losses. Personal loans are typically unsecured, meaning they do not require collateral. However, for larger loans or those with a higher risk, lenders may request collateral, such as a vehicle, property, or other valuable assets.

Debt Load

Your existing debt load can also impact your loan eligibility. Lenders will consider your ability to take on additional debt and manage the repayments. If you have a high amount of existing debt or multiple loan obligations, it may reduce your chances of qualifying for a new loan. Lenders want to ensure that you can handle the financial commitment of the loan and will assess your overall financial health.

It's important to note that loan eligibility criteria can vary depending on the lender and the specific loan product. Some lenders may be more flexible and willing to work with borrowers who have lower credit scores or unique financial circumstances. It is always advisable to compare loan offers from multiple lenders and carefully review their eligibility requirements before submitting an application.

Frequently asked questions