Moneylion: Understanding Loan Denial And Your Options

MoneyLion is a fintech platform that offers loans and subscription services to consumers. The company was founded in 2013 to rewire the financial system and give everyone the power to make their best financial decisions. MoneyLion offers a range of financial products and services, including personal loans, credit builder loans, cash advances, and investment services. While MoneyLion does not perform credit checks on loan applicants, there have been allegations and lawsuits against the company for imposing excessive fees and making it difficult for customers to cancel their memberships. So, does MoneyLion deny loans?

MoneyLion sued for overcharging service members

MoneyLion, a New York-based financial technology company, offers online loans and other products. The company requires customers to join a membership program and pay monthly membership fees to access its "low-APR" loan products.

The Consumer Financial Protection Bureau (CFPB) sued MoneyLion Technologies and 38 of its subsidiaries for imposing excessive and illegal charges on servicemembers and their dependents. The CFPB alleged that MoneyLion violated the Military Lending Act by charging more than the legally allowable 36% rate cap on loans to servicemembers and their families. This rate cap violation was a combination of stated interest rates and monthly membership fees.

The CFPB also alleged that MoneyLion required customers to join a membership program to access certain "low-APR" loans and then made it difficult for them to cancel their memberships until their loans were paid off. MoneyLion's refusal to cancel memberships and stop charging monthly fees, even after loan payoff, was a significant issue. The company's practices were deemed deceptive and harmful to consumers, with Director Rohit Chopra stating that MoneyLion "targeted military families by illegally extracting fees."

The CFPB has the authority to take action against companies that violate consumer financial protection laws and has sought monetary relief, an end to MoneyLion's unlawful practices, and civil penalties. The lawsuit highlights the CFPB's commitment to protecting consumers, including servicemembers and their families, from unfair and abusive financial practices.

Monthly membership fees

MoneyLion is a financial technology company that offers online loans and other products. The company was founded in 2013 and is headquartered in New York City. MoneyLion offers a range of subscription-based services and membership programs with associated monthly fees.

MoneyLion's Credit Builder Plus subscription is a monthly membership service designed to help users rebuild their credit. It offers loans of up to $1,000 with interest rates ranging from 5.99% to 29.99% annual percentage rate without a credit check, payable over 12 months. The Credit Builder Plus subscription also provides access to a range of tools to track spending, savings, and manage credit. This subscription service has a monthly fee of $29, although this can be offset by daily logins, with users earning $1 cash back for each daily login.

MoneyLion also offers a MoneyLion Plus subscription, which combines investing, borrowing, and checking accounts into a single membership. This subscription has a monthly fee of $79, which includes a deposit of $50 into the user's investment account and a monthly fee of $29. Similar to the Credit Builder Plus subscription, users can offset the monthly fee by earning $1 cash back for each daily login.

In addition to these subscription services, MoneyLion offers an optional $1-per-month RoarMoney membership that increases the maximum cash advance available through their Instacash service to $1,000. Instacash allows users to access a cash advance of up to $500 with their free account and offers instant transfers for an additional turbo fee. MoneyLion also offers a WOW membership, which provides reimbursements for Instacash turbo fees and access to additional perks such as managed investment accounts, premium insurance on card purchases, extra cashback, and weekly giveaways.

MoneyLion has been criticized and sued for its high fees and deceptive practices, particularly in relation to military servicemembers and their dependents. The company has been accused of imposing excessive charges, requiring membership programs to access certain loans, and making it difficult for customers to cancel their memberships.

No credit checks

MoneyLion is a mobile banking platform that offers a range of financial services and products, including loans. It was founded in 2013 and is headquartered in New York City. The company's goal is to "rewire the financial system" and "give everyone the power to make their best financial decisions."

MoneyLion does not perform hard credit checks on applicants, which means there is no impact on your credit score when applying for a loan. This can be especially attractive to those with a thin credit history or poor credit. However, MoneyLion does require borrowers to meet certain criteria to be approved for a loan. For example, if you have a negative balance or your bank account is less than 60 days old, you will likely not qualify for a loan.

MoneyLion's Credit Builder Plus loan can help build and improve your credit profile. The company reports your payments to all three major credit bureaus and offers credit monitoring services that allow you to track your progress.

MoneyLion's Instacash feature allows eligible users to take out cash advances of up to $500 with no credit checks or monthly fees. The amount of the cash advance depends on individual financial circumstances, including income and credit score.

It is important to note that while MoneyLion does not perform hard credit checks, some users have reported receiving messages about credit cards and loans, only to be led down a "dead-end road" with multiple credit checks, resulting in a lower credit score.

High interest rates and fees

MoneyLion has been criticized for its high fees and interest rates, with some users complaining about the difficulty of cancelling their paid memberships. The company has been accused of overcharging customers for loans and refusing to cancel memberships, even after loan payoff if consumers had any unpaid membership fees.

MoneyLion's Credit Builder Plus loan, for example, comes with a $19.99 monthly membership fee and interest rates ranging from 5.99% to 29.99%. While the company offers a low starting APR, monthly fees may make the cost of borrowing too expensive. For instance, if you borrow $1,000 from MoneyLion for 12 months at 29.99% APR, you will end up repaying $1,169.79. However, if you include 12 months of membership fees, it comes out to $1,409.67, which equates to about 68.7% APR.

The InstaCash service is advertised as interest-free, but it comes with automatic fees that are equivalent to an extremely high-interest payday loan. MoneyLion also charges a fee to receive funds instantly for a 0% APR cash advance of up to $500.

In 2022, MoneyLion was sued by the Consumer Financial Protection Bureau (CFPB) for violating the Military Lending Act, with loans to servicemembers at interest rates above 36% APY. The CFPB alleged that MoneyLion imposed membership fees on covered borrowers that, when combined with loan-interest-rate charges, exceeded the Military Lending Act's 36% rate cap. The CFPB also accused MoneyLion of deceiving borrowers by representing that they owed loan payments and fees that they did not actually owe because the loans were void under the Military Lending Act.

MoneyLion has defended its practices, stating that its Credit Builder Plus loan is designed to help users build their credit profiles and that it offers lower-cost borrowing and investment services through its subscription-based membership.

Eligibility for a MoneyLion cash advance

MoneyLion is a financial technology company that offers online loans and other products. The company was founded in 2013 and is headquartered in New York City. MoneyLion offers a range of products, including subscription services, loans, and cash advances.

To be eligible for a MoneyLion cash advance, you must have an active MoneyLion account and a linked bank account. You must also demonstrate regular deposits, whether via check or direct deposit, and have a positive bank balance. Your bank account history must show that you have a stable income and a good record of paying back on time. Eligible income sources include payroll, government benefits, and pension payments.

MoneyLion does not perform credit checks, so your credit score will not affect your eligibility. However, showing that you have a history of good money management is important. This includes not having frequent overdrafts and having a reliable income.

The amount you can borrow with a MoneyLion cash advance depends on your direct deposit history and how you use your account. The more responsibly you manage your money, the higher your cash advance limit may be.

It is important to note that while MoneyLion does not charge overdraft fees, you could incur overdraft fees from your bank if you do not have enough money in your account on the repayment date. Additionally, not repaying your cash advance will not hurt your credit score, but you will not be able to take out any other advances until you repay your outstanding balance.

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