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What is Oportun? A Comprehensive Look at the Fintech Lender

An Introduction to Oportun and Its Mission

Oportun is a financial technology company, or fintech, that provides affordable loans and other financial services to people with little or no credit history. Their mission is to help those who have been traditionally underserved by banks and mainstream lenders build credit and achieve financial stability.

Now, you might be thinking, “Wait, isn’t that what payday lenders and those sketchy ‘buy here, pay here’ places do?” Well, kinda, but Oportun is different – they actually want to help people improve their financial situations, not trap them in cycles of debt. Pretty cool, right?

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How Oportun Works: Loans, Credit Cards, and More

So, how does this whole Oportun thing work? Basically, they offer a few different products and services:

Personal Loans

  • Oportun’s bread and butter; they offer personal loans from $300 to $10,000 (the amount varies by state)
  • Loans are unsecured, meaning you don’t have to put up any collateral like your car or house
  • Interest rates are higher than a bank loan but way lower than payday lenders (more on that later)
  • Repayment periods range from 6 to 46 months, making the payments more manageable

Credit Cards

  • The Oportun Visa Credit Card is designed for people with little to no credit history
  • It has a low credit limit to start (usually $300-$1000) but you can get increases over time
  • No annual fee, no penalty APR, and you get a free FICO score every month to track progress

Other Services

  • They offer free personal finance education and tools to help build money management skills
  • You can set up automatic payments and payment reminders to stay on track
  • Oportun reports your payment history to the major credit bureaus to help establish credit

The big idea is that Oportun gives people a chance to access affordable credit and start building their credit scores through responsible borrowing and repayment. It’s like training wheels for getting into the financial mainstream.

The Oportun Difference: How They Compare to Alternatives

Okay, but what really sets Oportun apart from other alternative lenders and credit options for people with poor or no credit? A few key things:

Lower Costs Than Payday/Title Lenders

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  • Payday loan fees can equal an APR of 400% or more; Oportun caps interest rates at 36%
  • They don’t allow rollovers that can trap borrowers in never-ending cycles of debt
  • No lump-sum repayment required like with payday loans; Oportun has installment payments

More Affordable Than Rent-to-Own Stores

  • Rent-to-own places charge huge markups, making a $300 purchase cost over $1000
  • With an Oportun loan, you own the item outright after paying it off at a much lower cost

Designed for Credit-Building, Not Predatory Lending

  • Oportun’s goal is to help customers establish credit and graduate to lower-rate options
  • They have free financial education resources and tools to promote healthy habits
  • Payday lenders, on the other hand, make more money when customers can’t pay and get stuck in debt

So in a nutshell, Oportun aims to be a more affordable, more responsible alternative for credit-challenged consumers than the typical predatory lenders out there. But is it too good to be true? Let’s look at some of the pros and cons.

Pros of Using Oportun

It Can Help Build Credit From Scratch

One of the biggest benefits of Oportun is that it provides a way for people to establish a credit history when they have none. By making on-time payments on an Oportun loan or credit card, customers can build up their credit scores from zero. This can open the door to getting approved for mortgages, auto loans, credit cards, and other mainstream financial products down the road.

The Costs Are Lower Than Most Bad Credit Options

While Oportun’s interest rates are higher than what you’d get from a bank, they are significantly lower than the outrageous fees charged by payday lenders, title loan companies, and rent-to-own stores. An Oportun loan with a 36% APR is way cheaper than a payday loan with the equivalent of a 400%+ APR.

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No Collateral or Deposit Required

Unlike title loans that require putting your car up as collateral, or secured credit cards that require an upfront deposit, Oportun’s loans and credit card are unsecured. This means you don’t have to risk losing something you own just to borrow money or get a line of credit.

Oportun Promotes Healthy Financial Habits

Through financial education resources, tools for budgeting and tracking payments, and incentives for on-time repayment, Oportun tries to instill good money management practices in its customers. The goal is to help people develop the skills and discipline to eventually qualify for more affordable mainstream credit products.

Potential Downsides of Using Oportun

The Interest Rates Are Still High

Let’s be real – a 36% APR is still pretty dang high compared to rates from banks and credit unions for people with good credit. An Oportun loan is way more affordable than a payday loan, but the interest costs can still add up significantly over the life of the loan.

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Borrowing Limits Are Low

Oportun’s personal loan amounts max out at $10,000 in most states, and the Oportun Visa credit limit starts at just a few hundred bucks. So it may not provide enough funding for things like major repairs, debt consolidation, or other bigger expenses.

Credit Limits Increase Slowly

Speaking of credit limits, some Oportun customers have complained that their credit limits only increase by very small increments, even after years of on-time payments. This can make it difficult to keep their credit utilization low, which is an important factor for credit scores.

Approval Is Not Guaranteed

While Oportun is more inclusive than traditional lenders, you still have to meet their approval criteria in terms of income, existing debt levels, etc. So people with really poor or no credit history may still get denied.

It’s Not Available Everywhere Yet

As of 2024, Oportun’s services are available in about 35 states. So depending on where you live, you may not have access to their loans and credit products yet.

How to Decide If Oportun Is Right for You

At the end of the day, whether Oportun is a good option comes down to your specific financial situation and goals. If you’re trying to escape the vicious cycle of payday loans and need an affordable way to start building credit from scratch, Oportun could be a solid choice.

But if you already have decent credit and could qualify for a personal loan from a credit union or online lender with much lower rates, then paying 36% APR with Oportun probably doesn’t make sense. It really depends on your alternatives and priorities.

My advice? Do your research, run the numbers, and think about what you’re hoping to accomplish financially. Is establishing a credit history the #1 goal right now? Or is getting the lowest possible interest rate the top priority? Be honest with yourself about where you’re at and what you need.

Oh, and one more thing – whatever you decide, for the love of God, avoid those scammy payday loan places at all costs. An Oportun loan or secured credit card is definitely the better alternative if you need to borrow money but have poor credit.

Final Thoughts on Oportun

So there you have it, guys – the full scoop on Oportun and how they’re trying to bring more affordable credit and financial empowerment to underserved communities. Are they perfect? No, but they do seem to be a better option than predatory payday lenders and the like.

At the end of the day, Oportun probably isn’t the ideal long-term solution for everyone. The goal should be to use their products responsibly to build up your credit, then eventually “graduate” to even lower interest rates from mainstream lenders down the road.

But for those with little to no credit history who need to borrow money responsibly and start establishing themselves financially, Oportun could be a solid stepping stone. Just be smart about it and have a plan for continually improving your credit situation over time.

What do you think about Oportun? Have you used their loans or credit card before? Let me know your experiences and thoughts in the comments!Oh, and before I forget – here are some other resources that might be helpful as you explore your options:

Alright, that’s all I’ve got! Let me know if you have any other questions.

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