The Branch loan app has become an increasingly popular option for people looking to get quick access to cash. With its promise of fast funding and easy repayment, Branch markets itself as an alternative to payday loans and other predatory lending practices.
But is Branch legitimate, or is it a scam that borrowers should avoid? In this comprehensive review, we’ll take an in-depth look at how Branch works, its pros and cons, interest rates and fees, eligibility and approval process, loan limits, repayment terms, customer service, security, and more. Read on for a complete analysis of whether Branch is a smart borrowing choice or a scam to steer clear of.
Overview of Branch
Branch is an online lending platform that offers personal loans between $50 and $1,000 for terms between 6 and 24 months. Borrowers can apply for loans completely through the Branch app on their mobile device – there are no physical locations or paperwork required.
Branch uses alternative data sources and machine learning algorithms rather than traditional credit scores to evaluate applicants. This allows Branch to extend loans to borrowers who may not qualify with other lenders, including those with:
- Low credit scores
- Limited credit history
- Low or irregular income
Applicants provide information like their bank account details, contacts, and location services access so Branch can analyze their financial health. Branch states approval decisions take around one minute.
If approved, funds are deposited directly into borrowers’ bank accounts as soon as the next business day. Borrowers then repay their Branch loans in fixed monthly payments until the principal plus interest is paid off.
Branch was launched in 2015 and is available in over 30 states. It is owned by Branch International Inc. and based in San Francisco, CA.
Pros of Branch Loans
Branch loans offer some potential advantages, including:
Fast funding: Branch advertises that loans can be funded as soon as the next business day after approval. This makes it a good option if you need cash quickly.
Credit access: Branch uses alternative data instead of credit scores in its approval process. This gives people with poor or no credit a chance at being approved when they may not qualify elsewhere.
Mobile convenience: The entire loan process from application to funding can be completed on your smartphone through the Branch app.
Fixed payments: Branch loans have fixed repayment schedules with set principal + interest monthly payments. This allows for predictable budgeting.
No fees: Branch states it does not charge origination, prepayment, or late fees. This can make it more affordable than payday loans or other expensive financing options.
Referral program: Borrowers can earn rewards by referring friends and family to Branch. You get $20 for each new customer who takes out a loan.
Cons of Branch Loans
However, there are also some downsides to consider with Branch loans:
High APR: Branch’s APR ranges from 60% to 365% based on the loan amount and term. This is considerably higher than rates from traditional lenders.
Difficulty increasing limits: Branch only lends up to $1,000, and it can be challenging to get approved for higher loan amounts even after repaying initial loans.
Repayment monitoring: Branch requires account monitoring and records your phone’s location. Some may view this as invasive.
Eligibility limitations: Branch is not available in all U.S. states. Even where it operates, approval is not guaranteed. Typically, a steady job and income are required.
Fees if overdrafted: While Branch itself does not charge late fees, your bank may charge an overdraft fee if automatic payments overdraw your account.
Potential debt cycle: The high interest rates make it difficult for some borrowers, especially those with lower incomes, to repay loans. Refinancing or taking out new loans can lead to an expensive debt cycle.
Lack of physical locations: Some people may prefer in-person financing options over apps and phone communication when borrowing.
As you can see, Branch has several benefits that may make it worthwhile for some borrowers but also downsides to consider carefully as well.
Interest Rates & Fees
One of the most important factors when evaluating lending products are the interest rates and fees charged. Here are the details on rates and costs for Branch loans:
APRs: Branch advertises APRs from 60% to 365%. The specific APR you receive will depend on factors like your loan amount, repayment term, and risk assessment. The maximum APR in each state may also cap rates.
Origination fee: Branch does not charge origination or application fees.
Late fees: Branch states that they do not charge late payment fees. However, your bank may charge an overdraft fee if a payment overdraws your account.
Prepayment penalties: There are no prepayment penalties for paying off a Branch loan early.
Insufficient funds fees: Just like with late payments, your bank may charge a fee if a payment is processed when there are insufficient funds in your account. Branch itself does not charge insufficient fund fees.
Referral bonuses: While not technically a “fee”, remember that Branch pays $20 bonuses for referring new customers. This incentive should be factored in when evaluating their business practices overall.
While rates are higher compared to alternatives like credit cards or traditional personal loans, Branch does not charge the type of fees common with payday and title loans. Still, borrowers should factor the APRs in comparison to other financing options.
Eligibility & Approval Process
Branch has fairly straightforward eligibility and application requirements. Here are the key criteria to qualify and get approved for a Branch personal loan:
- At least 18 years old
- A U.S. citizen or permanent resident
- Regular income of at least $10,000 per year
- Consistent bank account activity
- Valid email address and mobile phone number
- Must not have any outstanding loans with Branch
The Application Process:
- Download the Branch app or apply online
- Share personal details including income, employer, bank account info
- Provide access to text messages, contacts list, GPS location
- Review loan offers in as little as one minute
- E-sign loan agreement if offer accepted
- Funds deposited as soon as the next business day
Rather than conducting a hard credit check, Branch analyzes alternative data points from your smartphone and connected accounts. This includes factors like where you live and work, income streams, spending habits, bill payments, contact profiles, and more.
Approval is not guaranteed. Those with limited credit history, lower incomes, recent moves, or other indicators of financial stress may not qualify. Having steady predictable income is key for the best approval odds.
Branch currently offers personal loan amounts between $50 and $1,000 for first-time borrowers. If you repay your first loans responsibly, it is possible to get approved for higher amounts when taking out subsequent loans.
Here is an overview of the loan amount ranges:
- Minimum Loan: $50
- Maximum First-Time Loan:$1,000
- Maximum with Multiple Loans:Up to $2,500 based on repayment history
So while the maximum loan for your first application is $1,000, it is possible to increase this up to $2,500 by continually borrowing from Branch and reliably repaying on time. However, Branch does not disclose specific criteria for increasing limits.
It can be challenging to get access to sums above $1,000. Even borrowers with excellent repayment history on initial loans report difficulty getting approved for larger second or third loans.
If you need more than $1,000 quickly, Branch may not be the best option. Other lenders may offer higher borrowing amounts for one-time loans.
Branch offers loans with total repayment terms between 3 and 24 months. The specific terms available will depend on the loan amount you are approved for and requirements in your state.
Here is an overview of typical repayment terms by loan amount:
|Loan Amount||Minimum Term||Maximum Term|
|$50||3 months||12 months|
|$100||3 months||24 months|
|$250||6 months||24 months|
|$500||12 months||24 months|
|$750||12 months||24 months|
|$1,000||12 months||24 months|
For loans under $250, you’ll repay the balance within 12 months or less. Loans between $250 and $1,000 have terms from 6 months up to 24 months.
The longer the term length, the lower your required monthly payment will be. However, you’ll pay more overall in interest costs with a longer-term loan.
Branch loans have fixed terms and monthly payments. This means your payment schedule and total repayment costs are set at the time you take out the loan. Your payment amounts will not vary over the loan term.
Repayment & Collections
When you take out a Branch loan, repayment is automatically withdrawn from your authorized checking account on your paydays. Branch requires access to your checking account activity and payday details to set this up.
Your repayment terms, payment amounts, and payoff date are clear before accepting the loan. Branch states that it will work with borrowers experiencing financial hardship to rearrange payment schedules before pursuing collections.
If payments fall more than 15 days past due, Branch has the right to pursue collections actions, including:
- Reporting nonpayment to credit bureaus
- Selling the debt to a collection agency
- Pursuing legal action and lawsuits
To avoid late fees from your bank and collections actions by Branch, it’s essential to make sure funds are in your connected checking account before scheduled payment dates.
Overall, Branch aims to withdraw payments automatically on paydays as agreed. Borrowers who default on loans can expect collections efforts. Having funds on hand for withdrawals prevents issues.
Branch offers customer service assistance via:
- In-app messaging: You can send messages to Branch’s support team 24/7 through the app.
- Email: [email protected]is monitored during business hours for emailed inquiries.
- Phone: 1-866-825-9539 is Branch’s customer service hotline, answered from 5 a.m. to 7 p.m. PST on weekdays.
- Chatbot: An automated chatbot can answer basic questions 24/7 through the Branch website.
- Snail mail: Branch Loans, P.O. Box 782, Santa Cruz, CA 95061 for written correspondence.
Response times are typically prompt via message or email. Phone inquiries may involve short hold times. Overall, Branch aims to deliver helpful customer service when issues arise.
Through these channels, you can request assistance with your loan status, payments, app troubleshooting, account changes, terms and conditions explanations, and other inquiries. Dedicated loan specialists are assigned to handle more complex cases.
Security & Privacy
As a lending platform operating solely through a mobile app, data privacy and security are significant concerns. Here are some of the key ways Branch secures borrowers’ information:
- Encryption: Data transmissions are encrypted, and multi-factor verification protects accounts.
- Permissions: Permission requests when downloading the app disclose what account access is required and why.
- Alternative data: By analyzing alternative data, Branch says it can often avoid credit checks that ding scores.
- Deletion upon request: Branch states it will delete your account and data upon request if you repay your loan as agreed.
- No selling data: Branch pledges that it does not sell borrowers’ personal data or information.
However, Branch loan app still requires extensive personal, phone, and account access to operate. Borrowers should feel comfortable with these permissions before using Branch.
Complaints & Lawsuits
Like many financial platforms, Branch has received its share of complaints and lawsuits over its lending practices. Most common issues include:
- High interest complaints – Many argue the APRs are excessively high, making loans unaffordable.
- Strict loan repayment – Borrowers report issues with keeping up with payments and facing aggressive collections.
- Deceptive marketing lawsuits – Some lawsuits allege Branch misleads borrowers on costs and terms.
- Illegal in some states – Branch was ordered to cease operations in states that cap interest rates below their APRs.
- Privacy concerns – Sharing extensive personal data and account access has raised privacy fears.
- Unexpected overdrafts – Borrowers report unexpected overdrafts from automatic ACH withdrawals.
Despite these complaints, Branch loan app maintains an A rating with the Better Business Bureau thanks to its responsive customer service. No services are perfect, and borrowers should weigh the benefits and risks carefully.
Branch Compared to Alternatives
How do Branch loans stack up against other popular financing options? Here is an overview comparing Branch against payday loans, title loans, credit cards, and traditional personal loans:
|Loan Type||Loan Amount||APR Range||Loan Term||Approval Requirements||Funding Speed|
|Branch||$50 – $1,000||60% – 365%||3 – 24 months||Income over $10k, <br>smartphone access||As soon as next <br>business day|
|Payday Loans||$100 – $1,000||400%+||14 days or less||Photo ID, income <br>source, checking account||Same day|
|Title Loans||$100 – $10,000||100% – 700%+||30 days – 2 years||Own car title||Same day|
|Credit Cards||$500 – $50,000||14% – 36%||Revolving||Good credit, <br> credit history||7+ days|
|Personal Loans||$1,000 – $100,000||5% – 36%||1 – 7 years||Good credit score||1 – 7 business days|
As you can see, Branch loan app occupies a middle ground between extremely high-cost short-term loans and lower APR long-term financing options.
The pros are faster approvals and funding compared to many products. The tradeoffs are capped loan amounts and higher rates than traditional lending.
Branch Loan App: Is Branch Legit or a Scam?
After reviewing all the key factors – interest rates, eligibility, loan terms, costs, user reviews, and more – here is the final verdict on whether Branch is a smart option or a scam:
Branch loans are a legitimate financing option but with some potentially serious drawbacks borrowers should consider.
The biggest benefits of Branch are quick access to funds even with poor credit, simple mobile applications, and no hidden fees. These perks make Branch superior to predatory payday and title loans.
However, the steep interest rates create affordability issues for some borrowers. And read the fine print carefully, as you are authorizing extensive data access.
For those with poor credit or an immediate cash need, a Branch loan can serve as a legitimate financing option so long as you understand the high interest costs. Approval is not guaranteed.
Use Branch loans only for temporary needs that you can realistically repay within the short terms. Don’t treat Branch financing as a long-term solution or you may end up in a debt cycle. With eyes wide open to the risks, Branch loans can be reasonably safe alternatives to even more dubious lending practices.
Frequently Asked Questions (FAQs)
Q: Is Branch available in my state?
A: Branch loan app is currently available in the following states: Alabama, Alaska, Arizona, California, Florida, Georgia, Idaho, Illinois, Louisiana, Mississippi, Missouri, Nevada, New Mexico, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, Wisconsin.
Q: What credit score is required for Branch?
A: Branch loan app does not have firm credit score requirements. They consider factors like income, employment, bank account activity, and your smartphone data rather than relying strictly on credit reports and scores.
Q: How long does it take to get a Branch loan?
A: If approved, funds can be deposited as soon as one business day after successfully completing your application.
Q: Can Branch loans be prepaid early?
A: Yes, Branch loan app allows for early repayment of loans without any prepayment penalties or fees. This lets you pay down the principal faster to reduce interest costs.
Q: What happens if I miss a payment?
A: Branch loan app will attempt to withdraw any missed payments on your next pay date. After 15 days past due, they can report nonpayment to credit bureaus and collections agencies.
Branch loan app personal loans provide fast funding and mobile convenience for borrowers with minimal eligibility requirements. But high interest rates and aggressive collections make Branch loans best reserved for those with no better alternatives to cover urgent costs. Carefully compare interest rates and terms before applying. With prudent use, Branch loans can offer legitimate quick financing but also involve serious risks.