MoneyLion can point you in the right direction if you need to take better control of your money. This app is designed to help you make smarter decisions, whether you’re borrowing, saving, investing or looking for financial guidance. But if you’ve never heard of this service, you’re probably asking yourself: Is MoneyLion safe? Here’s what you need to know to decide whether this is the right app for you.
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The MoneyLion app can function as your own personal financial advisor, providing you with credit tips, credit monitoring and money management tools for success. But while education can improve your financial health and teach you how to save, sometimes, you need immediate access to funds. Fortunately, the MoneyLion apps also offers two ways to get your hands on cash.
One option is applying for a MoneyLion loan for an amount between $1,000 and $35,000. To qualify, you must provide your name, address, Social Security number, employment, income, and personal bank account information. Bank account details are necessary because loans are direct deposited into your checking account, and then electronically debited (ACH) from your account on due dates.
The downside is that this particular loan features a high interest rate ranging between 30% and 99% APR. Payments with a MoneyLion loan are required every two weeks rather than monthly. But since these are installment loans, your payments are fixed and predictable.
A MoneyLion Plus loan, on the other hand, is a membership program. In addition to being able to get a cash loan, this program helps you invest and save for the future.
There’s a $79 monthly membership fee with this program, but don’t think that you’re flushing money down the toilet. Each month, MoneyLion takes $50 from your fee and deposits the money into an investment account on your behalf, where funds are able to grow.
This puts your savings on autopilot. In addition, MoneyLion gives Plus members $1 cash back each day that they log into their account. With that being said, if you log into your account at least 29 days out of the month, your membership will be virtually free.
As a Plus member, you’re also given repeat access to personal loans up to $500 with an APR of 5.99%. Similar to a MoneyLion loan, a MoneyLion Plus loan requires your bank account information.
Whether you get a MoneyLion loan or a MoneyLion Plus loan, the company must confirm that you have an eligible bank account and review your transaction history as part of the underwriting process. Your bank account must:
- have a positive balance
- be at least 45 days old
- receive income from direct deposit
Unfortunately, there’s no way to get around submitting your bank account details. If divulging your bank account number makes you nervous, you can be confident that MoneyLion and apps like MoneyLion will take steps to protect your privacy and sensitive information. For example, those applying for a MoneyLion loan must pass an internal identity check process to confirm they are who they say they are.
MoneyLion also states that its customers’ login credentials are always 100% safe and secure, and that no MoneyLion employee is able to retrieve or change a customer’s personal information once it’s been stored.
If you apply for a MoneyLion loan, the company will conduct a hard credit pull resulting in an inquiry on your credit report. This is how they determine how much you can borrow and your interest rate.
This inquiry can cause a slight drop in your credit score. Remember this if you’re thinking about applying for a car loan or a mortgage in the near future. A credit score drop can potentially result in higher rates on other loans. Also, a MoneyLion loan can increase your debt-to-income ratio, which could make it harder to qualify for other loans.
Fortunately, there isn’t a hard credit pull with a MoneyLion Plus loan. So you don’t have to worry about a credit inquiry appearing on your credit report. But while there isn’t an inquiry, your payment history will be reported to the credit bureaus. For this reason, failure to pay your loan can damage your credit score.
Even if you trust the company to protect your privacy and keep your personal information safe, you may fear running into problems when the company debits loan payments from your bank account.
Rest assured that MoneyLion will never take more money than it should. When browsing MoneyLion Plus reviews, there were no complaints related to electronic debits. Therefore, you’re unlikely to have issues with this.
To avoid problems and surprises, make sure that you’re fully aware of the amount coming out of your account. With a MoneyLion loan, payments and terms are fixed, with bi-weekly payments scheduled on Fridays.
With a MoneyLion Plus loan, your monthly membership fee is debited from your checking account “in addition” to any loan payment. As far as your membership fee goes, you can choose to have the entire $79 debited from your account at once, or you can have the fee broken up into weekly, bi-weekly or semi-monthly payments.
If you absolutely don’t want ACH, it is possible to set up an alternative payment. Contact MoneyLion by email: firstname.lastname@example.org. Unfortunately, the company doesn’t accept personal checks. But you can make payments with a debit card, a cashier’s check or a money order. Understand, however, you must contact MoneyLion to deactivate your ACH, or else the company will continue to debit future payments from your account.