Is Coffee Break Loans Legit? | Review

Is Coffee Break Loans Legit? | In-depth Review

Coffee Break Loans markets itself as a way for people with bad credit to get quick cash, but is this lending company truly legitimate? With online lending increasing, borrowers must research before providing personal information and accepting a loan. This in-depth review will examine Coffee Break Loans, including its BBB rating, loan terms, pros and cons, and how it compares to alternatives. Read on to learn everything you need to know to decide if Coffee Break Loans is legit and the right choice for your borrowing needs.

What is Coffee Break Loans?

Coffee Break Loans is an online lending network that offers short-term installment loans primarily to borrowers with bad credit. The company launched in 2021 and is based in Nevada. Coffee Break Loans partners with a network of lenders who provide loans ranging from $100 to $5,000. The loans have terms of 3 to 24 months with bi-weekly or monthly payments.

Coffee Break Loans markets its loans as a way for borrowers to get quick cash to cover unexpected expenses or bridge a short-term gap. The company promises a quick and easy online application process with funds deposited as soon as the next business day if approved.

Coffee Break Loans BBB Rating and Reviews

Coffee Break Loans BBB Profile

Coffee Break Loans has an A+ rating with the Better Business Bureau (BBB). The BBB profile shows the company was accredited in August 2021 and has had zero complaints closed against it in the last three years. This good rating from the BBB provides evidence that Coffee Break Loans is running a legitimate business.

Online Reviews of Coffee Break Loans

While the BBB profile is favorable, there are some concerning reviews about Coffee Break Loans found on other third-party sites:

  • Trustpilot – 2.4 out of 5 stars based on over 700 reviews. Many complaints about hidden fees, high interest, and poor customer service.
  • SiteJabber – 2.5 out of 5 stars based on over 500 reviews. Numerous complaints describe the lender as a “scam” and “rip-off.”
  • Google Reviews – 3.1 out of 5 stars with negative feedback about deceptive practices.

These online reviews suggest borrowers should be cautious when using Coffee Break Loans. The poor ratings indicate the lending experience might not match the company’s marketing promises.

How Coffee Break Loans Work?

Loan Amounts and Terms

Coffee Break Loans offers loans from $100 up to $5,000. The repayment terms range from 3 months (or 90 days) to 24 months (or two years). The amount and time you qualify for will depend on your income, credit score, and the lender you’re matched with.

Interest Rates and Fees

Expect high-interest rates from Coffee Break Loans due to its focus on borrowers with bad credit. Rates can range from 59% to 399% APR. There are also origination fees that range from 1% to 5% deducted from the loan amount. Late payments, insufficient funds fees, and processing fees may apply too. Be sure to read the fine print.

Application Process

Applying for a Coffee Break Loan involves filling out a short online form with your personal information. This is then used to match you with a lender in their network. If checked, you’ll need to provide income documentation and banking information. Coffee Break Loans promises a 1-minute application and funding in as fast as 24 hours.

Pros of Using Coffee Break Loans

Fast Application and Funding

The quick online application and approval process makes Coffee Break Loans attractive when you need cash urgently. Funds can be deposited within one business day faster than going through a traditional bank.

Available to Borrowers with Poor Credit

Coffee Break Loans serves borrowers with poor credit or no credit history who may not qualify with other lenders. This gives those with limited options access to emergency cash.

Cons of Using Coffee Break Loans

High-Interest Rates and Fees

The biggest downside of using Coffee Break Loans is the high cost. Interest rates near 400% APR are expensive, making these loans unaffordable for many borrowers. Plus, origination fees and other charges add to the overall cost.

Risk of Becoming Trapped in Debt Cycle

The short terms and bi-weekly/monthly payments make paying off a Coffee Break Loan challenging. Borrowers may be forced to continually roll over or reborrow the loan, becoming trapped in an endless debt cycle. This negates any temporary benefits received from the quick cash.

Coffee Break Loans Compared to Alternatives

Online Lenders like Upstart and LendingClub

Reputable online lenders like Upstart and LendingClub offer personal loans with much lower rates for those with fair credit – often starting around 6% APR. The application and approval process is just as convenient. Payment terms of up to 5 years also make repayment more manageable. These legitimate alternatives are preferable to Coffee Break Loans for most borrowers.

Payday Loans from Companies like CashUSA

For those with bad credit, a payday loan from CashUSA or a similar company may still be a better temporary solution than Coffee Break Loans. The fees and terms are comparable, but payday loans tend to be more transparent about costs. The loan amounts are also smaller, usually $500 or less, limiting your debt exposure.

Is Coffee Break Loans Legit? The Verdict

Signs Coffee Break Loans are Legit

  • Operates legally within the US and Nevada lending laws
  • Has an A+ BBB accreditation
  • Provides a genuine service matching borrowers to lenders
  • The company is responsive to complaints.

Remaining Cautions about Coffee Break Loans

  • Numerous negative reviews describing predatory practices
  • Very high-interest rates sink borrowers deeper into debt.
  • Short repayment terms increase the risk of rolling over loans
  • Details on fees and terms are opaque and confusing

While Coffee Break Loans does seem to operate as a legal and compliant business, borrowers should be very cautious using this lender and understand the risks. Make sure to read all fine print carefully. You may find better alternatives exist for your situation.

Conclusion

In summary, Coffee Break Loans offer easy cash but come with sky-high costs, making it a dangerous borrowing option. While the company is legitimate, take the many negative reviews as a warning. Only those unable to secure credit elsewhere should consider Coffee Break Loans as a last resort. Be prepared for predatory lending practices and traps that lead to endless debt. More transparent and affordable personal loan alternatives likely exist for most borrowers.

FAQs

Is Coffee Break Loans an illegal scam?

No, Coffee Break Loans is an accredited and legal lending network. However, its high high-interest rates and fees make it a predatory lender.

How long does it take to get a loan from Coffee Break Loans?

Coffee Break Loans advertises 1-minute approval and one business day for funds. However, it may take longer in some cases.

What is the maximum loan amount from Coffee Break Loans?

Coffee Break Loans offers loans from $100 to $5,000 based on your income and the matched lender.

What credit score is needed for Coffee Break Loans?

Coffee Break Loans specializes in borrowers with poor credit or no credit history. No minimum score is stated.

Can I pay off a Coffee Break Loan early?

Yes, you can pay your full balance early to avoid further interest charges. Make sure to check if there is a prepayment penalty.

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