LoanMe.com is a newly launched lender (2013) based in California that offers unsecured personal loans. Although LoanMe.com is technically a new company, it's really a clone of CashCall's personal loans division. A quick look at both websites (www.loanme.comand www.cashcall.com) is all you need to see you are dealing with the same company.
Why has CashCall, Inc. a company that was launched back in 2003 and which refers to itself as one of 'the nation's premier lenders' opened shop under a new name? It doesn't take much digging at the California ...
Department of Business Oversight website to see why CashCall is rebranding itself as LoanMe.
The California Department of Business Oversight is currently seeking to suspend the business license of CashCall, Inc for violations of the California Finance Lenders Law, particularly in connection with CashCall's personal loans. The charges against CashCall include material misrepresentations and omissions to consumers, false reports to the Commissioner, providing false filings, and failure to provide records.
This is not the first time CashCall has faced charges for illegal lending practices. There has been twelve previous civil or administrative actions against CashCall by the states of Arkansas, Colorado, Illinois, Iowa, Massachusetts, Minnesota, New Hampshire, North Carolina, Oklahoma, Pennsylvania, Washington, and the federal Consumer Financial Protection Bureau.
The charges in these other states include unlicensed lending, usury violations, illegal and fraudulent promotion of financial goods, and false license applications. As of July 2014, CashCall has been found guilty in three of the cases (New York, Alaska and Connecticut), while the other cases are still being examined.
Loan Amounts and Interest Rates
LoanMe.com offers personal loans ranging from $2,600 to $25,000 and interest rates from 35.87% APR to 204.94% APR. All loans have a $75 loan fee. The lower APR is only available for loans of $25,000. A $2,600 loan has a rate of 204.94% to be repaid in 47 months. The monthly payments would be $431.49, which means you would end up paying $20,280 for a $2,600 loan!
Although LoanMe.com's website doesn't specifically say that $2,600 is the smallest loan available, it's the lowest amount for which they offer an interest rate. There is a reason for this. If you call in and request a smaller loan amount, you may be get it. However, please notice that one of the charges against them in their lawsuit with the California Department of Business Oversight (Paragraph 3a and 3b of the lawsuit) is that when customers requested a loan for less than $2,600 CashCall would routinely suggest customers take the $2,600 and repay whatever amount they don't need on the same day.
The reason for this is that loans for $2,500 or less are limited by law to a maximum interest rate of 30%. Loans for more than $2,500 have no APR limitation. This means that even if you repay a big chunk of the loan on the same day, they will still be able to charge you an interest rate of 204.94% on a loan that would otherwise be limited to a 30% APR.
No Pre-Payment Fees and Credit Bureau Reporting
There are two positive points I can make about LoanMe.com. First it doesn't charge a pre-payment penalty. So you can repay the entire loan at any moment without having to pay an additional fee. Something I recommend you do as soon as you can, if you have purchased a loan from LoanMe.com or CashCall.
They also claim to report on-time payments to the credit bureaus, which could help repair your credit over time. Although, if you do have a loan with LoanMe.com, don't keep on making payments a month more than you absolutely have to. The minimal credit score repair you may obtain from LoanMe.com's reports is not worth the predatory interest rates.
Consumer Satisfaction and Better Business Bureau Accreditation
If you had any doubts about the type of company CashCall -- the parent company of LoanMe.com -- you can read the over 360 reviews published on Consumer Affairs. Although you expect to find disgruntled customers when dealing with a lender that deals in sub-prime loans, the volume and consistency of the complaints point to a serious problem with this company.
LoanMe.com is not rated or accredited by the Better Business Bureau and neither is CashCall.com. However, CashCall's website proudly displays the BBB Accredited Business logo at the footnote of every page. In fact, Cashcall's BBB rating is an F. This blatant misrepresentation of an easily verifiable fact is mind boggling, and raises further questions about the honesty and professionalism of CashCall and its subsidiaries.