Elastic line of credit review: Fees that can add up

Pros

• Might qualify with bad creditnSmall line of credit amountsnMultiple repayment options

Cons

• Cash advance and u0022carried balanceu0022 feesnCash advance fee taken from your fundsnNot available in every state

What you need to know about an Elastic line of credit

Elastic offers lines of credit that range from $500 to $4,500 and may help you cover unexpected expenses like car repairs or medical bills. Elastic is part of Louisville, Kentucky–based Republic Bank & Trust Company.

If approved, you can request cash advances up to your credit limit and then continue to borrow more money as you pay off your balance.

A cash advance fee that’s taken from funds

Elastic doesn’t charge interest on the amount you borrow like traditional loans do. Instead, you’ll pay a cash advance fee every time you request a cash advance. For example, if you’re approved for a $1,000 credit limit and borrow $500, your cash advance fee will be either 5% or 10% and cost $25 or $50, depending on your payment schedule and how quickly you pay the loan back.

And since Elastic will subtract your cash advance fee from your funds, if you borrow $500 and carry a fee of 5% ($25), you’ll only get $475 cash in hand.

What if you need the entire $500, though — and the best you can do is repay it in six monthly installments?

In that case, to get at least $500 cash in hand you’d have to request about $560, according to the online calculator Elastic provides on its website. That’s $500 plus a cash advance fee of $56 (10%, based on a monthly payment schedule for six months).

Carried-balance fee

You’ll also have to pay a “carried balance” fee when your payments are due if you owe a balance of $10 or more. The fee will depend on how much you owe and the billing cycle you choose, but can range from $5 to $350.

Using the same example — you need $500 cash in hand and can repay it in monthly installments over six months — you could end up paying around $670 total including the cash advance fee and multiple monthly carried-balance fees, according to Elastic’s calculator.

Multiple repayment options

Elastic allows you to make full or partial payments any time you want, and there’s no prepayment penalty. That means if you can pay off what you borrow within a couple of weeks, you’ll avoid a lot of the fees that can make this kind of borrowing such bad news.

You can make repayments via autopay, one-time online payment or mail. You can also use a debit card, personal check, certified check or money order.

A closer look at an Elastic line of credit

Here are a few other things to know before applying for an Elastic line of credit.

• Not available in all states — Elastic notes that it is not available in all states, and doesn’t specify which states it serves.
• Not available to some military personnel and their families — An Elastic loan is not offered to active military members, spouses or dependents who are covered borrowers under the Military Lending Act.
• You can get cut off from borrowing at some point — If your Elastic account has a balance for 10 months straight, it will enter a “cooling-off period.” This means you won’t be able to borrow any money until you keep your balance at or below $0 for 20 days in a row or pay off the entire balance.
• You may get your funds pretty quickly — When you choose to get your approved funds via direct deposit, the money may be in your bank account as soon as the next business day following your request, if you’re approved.
• Free financial info and tools — Elastic has an online-learning center called Financial U, which offers educational courses, interactive tools and other online resources. If you “graduate” from Financial U, you may be able to claim rewards.

Who is an Elastic line of credit good for?

If you need cash to cover an emergency and have imperfect credit, an Elastic line of credit may get you the money you need fast. But the cost in fees can be sky-high, so Elastic should be considered a last-resort option. If you do borrow from Elastic, you’ll want to pay off your balance as fast as possible to keep those fees from piling up.

To qualify, you’ll need to …

• Be at least 18 years old (19 years old  if you live in Alabama or Nebraska)
• Have a regular source of income or benefits
• Have an active checking account
• Be able to provide documents and information to confirm your identity
• Have a valid email address and consent to electronic disclosures
• Meet credit and underwriting requirements

How to apply with Elastic

If you want to apply with Elastic, you’ll have to fill out an online application — you can’t apply over the phone. Here’s the info you’ll need to provide.

• Full name
• State and ZIP code
• Email address
• Mobile phone
• Address
• Monthly rent or mortgage expense
• Monthly income amount and source
• Employment details
• Checking account details

Keep in mind that Elastic will check your credit during the application process and may review your credit scores and reports.

Not sure if Elastic is right for you? Consider these alternatives.

• Earnin:
Earnin is an alternative option for emergency cash. It’s an app that allows you to borrow against your paycheck without fees or interest.
• Upstart:
Upstart might be ideal if you want a lender with a prequalification option that considers more than just your credit scores.
• Payday alternative loans:
Federal credit union members can consider these emergency cash options, which have limits on fees.

*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.