Opportunity Loans: Hard Pull Or Soft Inquiry?

OppLoans are small, personal, high-interest, short-term installment loans provided by Opportunity Financial (also known as OppFi). The company does not perform a hard credit check or hard pull on loan applicants, which means that customers with bad or no credit have a good chance of being approved. However, OppLoans' APRs are far above the 36% that finance experts consider affordable. A hard credit check or hard pull provides a detailed look at an applicant's repayment history with other creditors, but temporarily lowers their credit score.

OppLoans does not do a hard pull

OppLoans, provided by the fintech platform Opportunity Financial (OppFi), are small, personal installment loans with short repayment terms. OppLoans does not do a hard pull, also known as a hard credit check or hard inquiry, when you apply for a loan. This means that applying for an OppLoan will not affect your credit score.

A hard pull is a type of credit check that is performed by lenders when making lending decisions. It involves a detailed review of a loan applicant's credit history and can cause their credit score to dip. While a single hard inquiry is unlikely to significantly impact whether an applicant is approved for a loan, having multiple hard inquiries within a short period can be seen as a sign of risk by lenders and credit-scoring models, potentially impacting an individual's credit score.

OppLoans does not perform a hard credit check, but it does carry out a soft credit check or soft pull. A soft credit check is when a lender or company checks an individual's credit as part of a background check. While a soft pull provides a glimpse into an applicant's credit, it does not impact their credit score. OppLoans uses credit report information provided by Clarity Services and Experian to determine an applicant's creditworthiness.

OppLoans offers high-interest loans with short repayment terms and high annual percentage rates (APRs). Finance experts generally consider 36% as the maximum affordable APR, while OppLoans charges APRs ranging from 160% to 195%. The company provides same-day funding for loans, which can be as high as $4,000.

Soft credit checks are performed by OppLoans

A soft credit check may provide limited information compared to a hard credit check, which offers a detailed overview of a person's creditworthiness and repayment history. A hard credit check may cause a person's credit score to dip temporarily. Many lenders see excessive hard checks as a sign that a person is desperate for credit, which can make them less likely to lend and potentially lowers the credit score by up to five points.

OppLoans are high-interest instalment loans of up to $4,000 with short repayment terms. The company markets these loans as affordable alternatives to payday loans, but they charge a high APR of 160% on all loans. Finance experts generally consider 36% as the maximum affordable APR. OppLoans also has short repayment terms, which can make it difficult for borrowers to meet the minimum monthly payments.

Lenders that issue no-credit-check loans do not look at your traditional credit history, and they can be an option for those with bad credit or no credit. No credit check loans can be used if you need fast access to cash for an emergency expense, such as a car repair or medical procedure.

Hard pulls can lower your credit score

OppLoans are short-term installment loans offered by Opportunity Financial, or OppFi. OppLoans borrowers do not undergo a hard credit check, but the company does perform a soft credit check before lending. A hard credit check or hard pull causes a loan applicant's credit score to dip, even if only temporarily.

A hard inquiry or hard pull happens when a lender or company checks your credit report because of an application for goods or services. It is called a "hard" inquiry because it indicates your financial risk and creditworthiness. It is a detailed look at your repayment history with other creditors. Landlords and lenders conduct these inquiries to determine whether you are likely to be a financial risk.

While hard pulls can lower your credit score, it is important to note that soft pulls or soft credit inquiries do not have the same effect. Soft credit inquiries are typically used to provide prequalified credit card offers or to gather information for background checks. They do not lower your credit score. Checking your credit score also does not lower it, so you are free to review your credit score as often as you like.

OppLoans' APR is above the recommended rate

OppLoans are small, personal, high-interest, short-term installment loans provided by the fintech platform Opportunity Financial (OppFi). OppLoans does not perform a hard credit check, but the company does carry out a soft credit check. A hard credit check provides a more detailed look at an applicant's repayment history with other creditors, but it can cause their credit score to dip.

OppLoans charges high annual percentage rates (APRs) ranging from 160% to 195%, with a minimum rate of 160%. Finance experts generally consider 36% as the maximum affordable APR. The high APRs, coupled with short repayment terms, can make it difficult for borrowers to meet the minimum monthly payments. The interest costs can make up more than half of the amount borrowed.

OppLoans' APR is far above the 36% that finance experts recommend as affordable. In fact, triple-digit interest rates are often a sign that a loan may be difficult to repay on time. The high rates are common among lenders that offer no-credit-check loans because they take on more risk and make up for it by charging high rates.

In April 2022, the California Department of Financial Protection and Innovation (DFPI) filed a lawsuit against OppFi, claiming that the company engages in deceptive and predatory lending by charging interest rates above the 36% limit for consumer loans in California. OppFi countersued the DFPI, stating that their rates are legal because interest rates charged by banks are exempt from the California rate cap as long as they are below the limits set in the bank's home state.

OppLoans offers small, short-term loans

OppLoans offers loans of up to $4,000, with a minimum loan amount of $500. The repayment terms are short, ranging from 9 to 18 months, depending on the state you live in. In comparison, personal loan lenders typically offer loan terms of 24 to 60 months. OppLoans does not charge an origination fee, which is a one-time administrative fee usually taken out of the loan amount.

OppLoans does not require a hard credit check for its loans, which means your credit score will not be impacted by applying for one of their loans. However, this also means that the lender may not be able to accurately predict whether the applicant will repay the loan. OppLoans requires borrowers to have a regular source of income of at least $1,500 per month in most states. The company also reviews bank account transaction data to determine whether borrowers have enough income to repay the loan.

OppLoans is not a payday loan provider, but it is also not a good option for those looking to build credit. There are faster and cheaper ways to build credit, such as a secured credit card. OppLoans reports payments to the three major credit bureaus, so on-time payments can help build your credit score, while missed payments can hurt it.

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