Opploans - Bad Idea?

[joeydtx]

I was reviewing something for a friend who is in dire need for a quick loan for an emergency repair, and his money falls short atm and needs it done.  He asked me about OppLoans, which I know is a high interest type of deal but not much option, even I  told him to wait when I saw the information and I havent used this service in over 7 years I forgot how it works.

• 1200 loan
• 2431 "Finance Charge"
• Total - 3631

He can pay this loan back within 3 weeks, however I am concerned about this Finance Charge and the lettering "You may be eligible for a refund of the Finance Charge" I assume for paying early. 

Main question here is anyone knows how this works, if he paid it back in the 3 weeks, or maybe allow an extra couple actual payments then pay it off, would he be paying 1200 + some of the interest that accured, or we talking the whole 3631 + interest and then get some of the Finace back?

Thanks - Happy Thanksgiving!

JD

[Revelate]

If he's going to be paying it off in 3 weeks and this is just to cover a cash flow shortfall, get EXACT details on what that means.  

You want epically high APR like 150% and no pre-payment penalty and a term of a few years.  The pre-payment penalty is the killer you want none and a low origination fee.

It's going to be state by state regulation but that's not a good play depending how much of that finance charge is origination vs interest so get exactly what that means.

[joeydtx]

From what I see there is no prepayment penalty or an origination fee for the loan. Maybe I am reading into it wrong, but when I see it I am wondering is it like, "we give you 1200, you pay us back 3900" 

Sadly there is not much option for him due to his credit but without going too much into details, this emergency hit him right as everything is back on track as everything good happened (new high paying job, rebuilding phase after BK last year and new life from divorce.)  Friends like myself have pooled to help him but lacks this 1200.

He could pay it off in the 3 weeks, but if he needed the option he would not mind paying extra but not 2700 extra.  

Thanks !

[Revelate]

That may just be the APR math over time, in which case it's fine if he's paying it back quickly.

Like I said the specific details matter as if that's the case, it's fine for the needs.  The deep subprime loan place I worked for did something similar where they stated how  much would be paid back IF the loan was carried to term... but in my case when I needed an extra 2K (and that starting EX score was literally from them) I cleared most of it in the same 3 weeks and then dribbled out the rest of it to 6 months haha.  Admittedly that is still now on my EQ as a CFA, but it just ticked over 10 years since closed so once this mortgage closes I'm going to be disputing.

It worked at the time for me, I wouldn't do it now with my current credit options but back then I was likewise backed into a credit corner.

[joeydtx]

---

@Revelate wrote:

That may just be the APR math over time, in which case it's fine if he's paying it back quickly.

Like I said the specific details matter as if that's the case, it's fine for the needs.  The deep subprime loan place I worked for did something similar where they stated how  much would be paid back IF the loan was carried to term... but in my case when I needed an extra 2K (and that starting EX score was literally from them) I cleared most of it in the same 3 weeks and then dribbled out the rest of it to 6 months haha.  Admittedly that is still now on my EQ as a CFA, but it just ticked over 10 years since closed so once this mortgage closes I'm going to be disputing.

It worked at the time for me, I wouldn't do it now with my current credit options but back then I was likewise backed into a credit corner.

---

Yeah I think so too.  When I add up all the payments, they equal the same amount of the original + FC, so I think if you pay more the FC drops too and doesnt accrue to that level.  I did send off a email to them to clarify, still got time so hopefully they confirm and we can go from there.  Thanks for commenting!