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How Does Finwise Bank Work?

Sarah Edwards | October 21, 2022

Sarah Edwards
Legal Expert
Sarah Edwards, BS

Sarah Edwards is a professional researcher and writer specializing in legal content. An Emerson College alumna, she holds a Bachelor of Science in Communication from the prestigious Boston institution.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

FinWise ain't your typical bank...

Summary: FinWise Bank works with a variety of partner organizations to service loans with exorbitant fees and high interest rates. If you have a loan with one of these partners, you may fall deep into debt. If you can’t afford your regular payments, FinWise Bank may pursue a lawsuit against you or send your debt to a collections agency. SoloSuit can help you manage your debt and get FinWise debt collectors off your back.

FinWise Bank is a small community bank located in Sandy, Utah, that offers traditional banking services, like checking and savings accounts. It also provides home loans and business borrowing opportunities, like equipment leasing and Small Business Administration (SBA) loans.

The company prides itself on its digital-first philosophy. Consumers can obtain personal and business loans through several online partners, including Mulligan Funding, RISE, Empower, and Edly. FinWise Bank handles the approval process and services the loans.

Loans available through FinWise Bank’s partners cater to individuals with poor credit, but the interest rates are high and come with exorbitant fees.

Should I apply for a loan from FinWise Bank?

FinWise Bank offers several types of loans for its customers, including SBA loans and home equity lines of credit (HELOCs). However, clients must apply for the loans directly at the Sandy, Utah, bank—the only location available. It does not offer these types of loans over the internet.

Most people incur problems with FinWise Bank when they apply for loans with the company’s partners. FinWise Bank services the loans and establishes payment schedules for consumers. People who apply for loans with the company’s partners may not realize that FinWise is their loan service company, resulting in customer confusion.

Through FinWise partner organizations, consumers can obtain high-interest loans online. FinWise assists in processing loan applications and provides its partners with the amount the company is willing to give the client, along with designated payment schedules, interest rates, and fees.

Poor credit loans often come with high annual percentage rates (APRs), and those from partners of FinWise Bank are no exception. The companies that FinWise Bank works with, like RISE, may charge APRs up to 299%.

What companies partner with FinWise Bank?

Multiple companies partner with FinWise Bank. These include:

  • RISE: RISE offers customers short-term loans of $500 to $5,000. However, the loans are very high-interest and may approach a 299% APR in some states.

  • Upstart: Upstart offers personal loans from $1,000 to $50,000 to consumers and differentiates itself from other lenders by checking non-traditional information, like the borrower’s education and work history. The APR for an Upstart loan is competitive, varying from 5.42% to 35.99%. The company also accepts applications from individuals without a credit history.

  • Reach Financial: Reach Financial is a debt consolidation company that offers credit card refinancing and debt consolidation loans. Rates vary from 5.99% to 35.99%, and you can obtain up to $40,000. However, customers must use the money to pay off existing creditors. Consumers repay Reach Financial according to a set payment schedule, which may last up to five years.

  • Empower: Empower is a cash advance app that markets to people with no credit or bad credit. Consumers obtain up to $250 for their initial loan. They'll owe no interest if they repay their loan within the set time frame. Consumers who pay late may incur interest up to 35.99%.

  • Edly: Edly is a student loan company that offers tuition payments directly to universities, and students don’t owe any money until four months after their graduation date. The company determines repayment amounts based on the student’s income following graduation. Interest rates may be as high as 23%.

  • American First Finance: American First Finance allows consumers to obtain loans of up to $5,000 for goods and services, partnering with various retailers and other providers in the customer’s location. Interest rates vary.

  • Mulligan Funding: Mulligan Funding offers working capital and business loans to small businesses. Depending on their credit history and revenues, owners can obtain up to $2 million in financing. Repayment terms extend up to 36 months.

  • Great American Finance: Great American Finance offers financing opportunities through its merchants. Furniture stores, medical and wellness companies, and home improvement companies provide financing through the company. Interest rates vary but may be up to 31.99%.

  • Opp Loans: Opp Loans is an online lending company that offers personal loans to consumers. Borrowers may obtain between $500 to $4,000 through this company’s services. APRs are as high as 160%, and repayment terms vary from nine to 18 months.

  • LendingPoint: LendingPoint offers personal online loans from $2,000 to $36,500, with APRs between 7.99% and 35.99%. Consumers may use these loans for various expenses, including medical costs, debt consolidation, and home improvement.

All FinWise Bank partners are essentially platforms advertising various loans. They are not lenders themselves. Customers of these platforms obtain loans through FinWise Bank, which underwrites the obligations and establishes a payment schedule.

Is FinWise Bank legitimate?

FinWise Bank is a legitimate, FDIC-approved bank. However, its partnerships with FinTech companies promote high-interest loans to consumers already in unfavorable financial situations. Of particular concern are partners like Opp Loans and Rise, which charge high APRs that may make repayment next to impossible, especially for financially vulnerable individuals. Their loans are similar to those offered by payday lenders.

Edly’s model is also concerning. Students who need tuition money for college may not realize how much repaying their loans will eat into their salaries following graduation.

People searching for debt consolidation loans may find Reach Financial and LendingPoint helpful. However, they may repay more in interest to these companies than they would to their original creditors.

Loan applicants who apply for funding through one of these partners may not realize that FinWise Bank handles the loan servicing and approval process. So, when bills from FinWise Bank begin to appear or the name shows up on borrowers’ credit reports, they may not recognize the company.

Let’s consider an example.

Example: Jeff takes out a $1,000 loan with Opp Loans. After a few months of making payments, Jeff still hasn’t paid off the loan amount and the insanely high interest hits. Jeff falls even more behind on his payments, and eventually stops paying. Later, he finds out that a company called FinWise Bank, who financed the loan with Opp Loans, is suing him. Jeff uses SoloSuit to respond to the lawsuit to give himself a fighting chance.

Get debt collectors off your back with SoloSuit.

FinWise Bank has bad reviews

The Better Business Bureau notes several complaints against FinWise Bank from consumers, like you. Most negative reviews relate to unexpected withdrawals from their bank accounts and complex repayment plans.

On top of that, FinWise Bank only has a 1.28-star rating with BBB and a 3.4-star rating with Google reviews. Most consumers don’t have great things to say about the company.

Let’s take a look at a real complaint from FinWise Banks BBB profile:

“I have had a loan with Rise, which is a Finwise product for over 2 years. As of May 2nd, the account shows a zero balance but for some reason, my account was reported as 30 days past due on my credit report. This is surprising, since my last payment was made on April 29th, so even if I did still owe on the loan I am still well within 30 days of the next due date which would have been in May. All efforts to make contact regarding getting the erroneous information have so far not worked. To add to that, I just separated from the Army and am in the process of trying to buy a house. This issue severely affects my ability to do so.”

How can I obtain a loan if I have bad credit?

If you have bad credit and need a loan for an unexpected expense, it’s best to avoid predatory lenders. You probably won’t be able to obtain a decent loan if your credit score is below 650.

Instead of looking for a loan, search for other ways you can come up with the money. Ask close friends or family members for help, or start a side hustle. You may be able to find a part-time job you can perform remotely. You can also sell things you don’t need that have value, like clothing, electronics, or furniture.

Often, people believe they can’t make ends meet without a loan. However, you can usually get by on what you have without needing to get further into debt. If you’re facing a severe crisis, like possible foreclosure or eviction, it’s best to try negotiating with your lender or rental agent.

You may consider bankruptcy if your current crisis doesn’t appear to be lifting anytime soon. A Chapter 7 bankruptcy accounts for unsecured debts, such as medical bills or credit cards. However, you’ll need to meet specific income requirements to qualify.

Individuals who don’t meet the Chapter 7 bankruptcy requirements may qualify for a Chapter 13 bankruptcy. Under a Chapter 13 bankruptcy, the court puts you on a payment schedule you adhere to for several years. Once you complete the repayment program, the court discharges the remainder of your debts.

Why are there so many predatory lenders?

Predatory lending has always been a problem, but it's grown tremendously over the past few decades. Payday lenders began to appear in the ‘90s and ‘00s. Their exorbitant fees put many people into dire financial straits. Some states created legislation to limit their availability, but not all states followed.

Lenders like FinWise Bank exacerbate the issue. Using its status as an FDIC bank, the company can offer various high-fee products through its partners. Individuals without other options, or those who don’t understand their loan agreements, get swept into a financial mess.

Because of this, it might be in your best interest to avoid companies that work with FinWise Bank.

It’s best to avoid partners of FinWise Bank—here’s why

FinWise Bank, itself, isn’t a predatory lender. The company offers traditional banking services to customers who live in Utah, including checking and savings accounts. It also helps local businesses obtain conventional loans, like SBA loans and equipment leases.

However, FinWise Bank partners with predatory companies that offer customers high-interest loans. FinWise Bank handles the approval and servicing of these loans, which are generally detrimental to clients.

Before taking on any loan, you must understand what you agree to. If the interest rates and fees are high, or you anticipate having difficulty repaying the lender, consider other options.

Respond to predatory lenders when they come after you for a debt.

What to do if you find yourself with a FinWise Bank debt

When you’ve taken on a loan from one of FinWise Bank’s partners, you may struggle to get out of it. If you can’t afford your regular payments, FinWise Bank may pursue a lawsuit against you or send your debt to a collections agency.

However, there are ways to recover. If you receive a notification of a pending lawsuit, use SoloSuit’s customized application to prepare your Answer. Submitting your Answer will protect you from a potential judgment and allow you to present your case fairly in the courtroom.

If FinWise Bank sells your outstanding debt to a collections agency, you can use our Debt Validation Letter to compel the agency to verify your debt before they keep contacting you. Many times, collection agencies won’t have enough information to support their collection efforts and will drop further actions against you.

Once you emerge from a FinWise Bank obligation, avoid further business with the company or its lending partners. Other creditors can help you with fair terms that don’t take advantage of your financial situation.

Respond to a debt lawsuit against FinWise Bank

If FinWise Bank is suing you, don’t ignore it.

You might not recognize the company name, and it’s probably because you worked with one of FinWise’s partners instead of FinWise directly. This doesn’t make the lawsuit any less legitimate.

The first step to defending yourself in a debt collection lawsuit is to respond to the initial court documents with a written Answer.

The video below breaks down three easy steps for how to respond when you get sued for a debt:

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You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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