Need cash fast? In the past, you had to make your way down to a pawn shop or check-cashing outlet to secure an absurdly high-interest payday loan. Today, those loans and other “payday loan alternatives” are easily available online.
Is that a good a thing? If it is, what alternative loan company should you consider? In this review, we’ll check out the options offered by alternative payday lender, RISE Credit. We’ll explain the ins and outs of the products, plus we’ll explore lower-cost options for borrowers with limited or bad credit.
See how RISE Credit compares to our companies on the Best Personal Loans list. You may find better options for you.
- Payday lender alternative
- Offers loan to borrowers with poor or no credit history
- Interest rate is very high
What Is RISE Credit?
RISE Credit is a lender that offers high-interest installment loans and high-interest lines of credit. They specialize in loans to people with poor credit history or no credit history. Instead of underwriting the loans using traditional scoring techniques, RISE Credit uses income information as well as your credit report to set terms and conditions for the loans.
What Products Does RISE Credit Offer?
RISE Credit offers two products. The first product is a short-term installment loan with repayment terms lasting up to 26 months in most states. As a borrower, you will be required to make payments on the loan as often as every two weeks. Short-term loans may become eligible for refinancing after 24 months (48 payments). Loans range from $500 to $5,000. Loans do not have prepayment penalties. Additionally, RISE Credit doesn’t charge origination fees, so if you can pay off the loan fast, you will avoid most of the fees.
Certain customers at RISE will also become eligible for a line of credit. A line of credit allows borrowers to use credit as needed and repay it on a schedule determined by the loan agreement. You can either make minimum payments on the line of credit, or pay it off as fast as possible to avoid accruing more interest. The minimum payment on a line of credit will fluctuate based on the amount you owe, but you will always pay at least the full interest accrued during the loan period.
The minimum interest rate on any loan product is 36%, and the maximum interest rate is 299%. Are these rates really better than the rates at pawn shops or payday lenders? The answer depends on the situation, but payday loans typically have interest rates of 322% or higher.
LendUp is a very similar company that offers even more products and options than RISE does. It may be an alternative to compare.
Where Is RISE Credit Available?
RISE Credit offers loans in the following states: Alabama, California, Delaware, Georgia, Idaho, Illinois, Kansas, Mississippi, Missouri, New Mexico, North Dakota, Ohio, South Carolina, Tennessee, Texas, Utah, and Wisconsin.
Kansas and Tennessee are the only two states that offer lines of credit.
Will RISE Credit Help You Build Credit?
RISE reports all payments to the the three biggest credit bureaus. If you make on-time payments on your loan, you will build your credit score.
What Alternatives Should Borrowers Consider?
Anytime you start to talk about triple-digit interest rates, it’s important to exhaust every other possible option before you take out a loan. Since RISE Credit’s loans start as small as $500, you may be able to cover your unexpected expenses by selling an asset (like an old car, musical instruments, tools you no longer need, high-end clothing) or by working extra hard for a few days.
On top of those options, you should consider the following “loan” or loan alternatives before turning to RISE Credit or any other high-cost loan products.
1. Loans from Family or Friends
If you need a few hundred dollars, a friend, parent, or sibling might be able to help you out in a pinch. If you want to make it an official loan with interest and everything, consider using Lenmo which allows users to make peer-to-peer loans that actually report to credit bureaus.
2. Get a Paycheck Advance
Your HR department may be able to cut you a check for the hours you’ve worked to help you out in a pinch, or they may offer an advance on your paycheck which is usually free or very low-cost. If you work for an enormous company like Home Depot or McDonald’s, you may be able to cash out part of your earned paycheck by using an app like Earnin (formerly Activehours). Earnin is technically free, but it’s funded through a “pay-what-you-think-is-fair” system, so you might want to throw in a buck or two to help them keep the lights on. Chime (a bank) also offers its users early access to direct deposit (though that takes a few weeks to establish).
3. Use a Credit Card
If you have a credit card, even one with a very high interest rate, use it instead of a payday loan. Even a cash advance from a credit card has a lower interest rate than the rate from a RISE Credit installment loan.
4. Negotiate Your Own Payment Plan
Whether you’re at risk of running late on your utilities, a medical bill, school tuition, or you need an emergency car repair, you can probably negotiate a payment plan with less than 100% interest. The hospital closest to my house offers anyone who calls a payment plan ranging from 18 to 36 months with 0% interest. If you can prove a financial need (or just ask nicely), they’re typically willing to knock off up to 50% or more of the bill. My mechanic offers financing plans with interest rates from 12% to 36% with installments lasting up to 18 months.
Final Take on RISE Credit
The fact that RISE Credit offers a high-interest loan with no origination fee is a big win for people who would otherwise take out a payday loan. It can lead to substantial savings, especially if you need several weeks or months to pay off the loan. That said, RISE Credit is another last-resort loan option. Often, it’s better to pay a late fee (but not an overdraft fee) than to take out one of these absurdly high-interest loans.
If you have any alternative way to pay for something, use it. RISE Credit is truly a lender of last resort. And to prevent any future need of borrowing from RISE Credit, be sure to start building your credit today.