The type of short-term loan on offer is sometimes known as a “payday” loan, as it’s reliant on taking a portion of the borrower’s next paycheck to cover payments. These types of loans are now prohibited in 12 states, and the terms you’ll get can vary considerably from state to state. You’ll need to watch out for potentially high fees, and interest rates that could hit upwards of 1825%.
When used sensibly, these types of loans can be a good way to improve your credit score, as long as you don’t miss any payments and pay the loan off in full.
However, you should also be aware that Lendafy currently has an F rating with the Better Business Bureau over failures to respond to customer complaints. These complaints relate to unsolicited marketing from Lendafy and a lack of response to a potential identity theft case.
Loans and policies breakdown
Lendafy doesn’t give any details on the partner lenders it works with on its website. To get an idea of the types of rates you’ll be paying, you’ll have to actually input your details and start the application process. This makes it difficult to do any detailed research beforehand, and it means you won’t quite know what to expect.
Lendafy does have a state-by-state comparison tool that helps you out a little, though. While this doesn’t tell you about the lenders available in a particular state, it does tell you its maximum and minimum guidelines set for short-term lending. These won’t necessarily be the terms you’ll eventually get on your loan, but it does give you an indication.
Loan features include:
Interest rates ranging between 169% to 1825%
Borrow between $100 and $10,000
Some states may allow high finance fees to be charged. Sometimes as high as 20%
Origination fees vary from state to state
Minimum credit requirements aren’t stated. Decisions will be at the lender's discretion
Repayment terms aren’t given
Key advantages of using Lendafy
Lendafy is worth a look if you need money to cover an emergency situation. In some cases, approval can be within minutes of submitting your application, and the money could be in your account within 24 hours.
If you have a poor credit rating there’s a good chance you’ll also be accepted for a loan. While credit score requirements aren’t disclosed, Lendafy notes it has flexible lenders as its partners. Short-term, small-dollar loans are a good way to improve your credit history, provided you keep up with the payments.
Key disadvantages of using Lendafy
You’re essentially on your own if you run into any issues with a loan found via Lendafy. There’s no way to contact Lendafy at all, either via phone or email. It’s your responsibility to contact the lender directly with any queries once you’ve signed up.
If you miss any payments, there’s a good chance you’ll be stung with expensive charges. Add this to an already high interest rate, and you could find yourself stuck in a cycle of debt you can’t afford to repay.
Always make sure you read the fine print very carefully, understand all of the terms and conditions, and be positive you can make the repayments. Short-term borrowing can be a very risky debt to take on, so make sure you’re aware of the risks.
With very limited information on lenders available via the website, you must input your personal data to actually find out what rate you’ll get. This also means there’s a chance you could get multiple hard pulls to your credit score which could have a detrimental effect.
Summary
Lendafy could be a good option for emergency situations. It’s free to use and the quotes you receive are no-obligation. So there’s no real harm in giving it a look if you’re in a pinch.
However, if you have long-term plans for your borrowing, there are definitely better options out there. And you must always make sure you’re able to make all repayments on short-term debt. If it looks like the quotes are out of your price range, shop around for alternatives.