601750Reader Question: I keep getting scammed by these payday loan guys and I heard that this new one called LendUp is better. Have you heard of them, do you know if they aren’t scammy?

Answer: We can’t vouch for the trustworthiness of LendUp since they have only been around since 2012, but like you, we have heard great things. The don’t even have any complaints from the Better Business Bureau, which is unique for a payday loan service. LendUp seems to be trying to change how people view payday loans. In fact, they try to even distance themselves from the term “payday loan” and want to be called an online loans service. For example, compare LendUp with our review of CashNetUSA. So are they different?

How LendUp Works

LendUp works very similarly to other payday loan services, with a few twists. LendUp has an incentive system that allows people who borrow more than once to add points as they pay back their LendUp loan on time. These points help them be able to borrow more and reduce the interest rate for the loan. Here’s a breakdown:

How much can I borrow: LendUp allows you to borrow anywhere from $100-$250, depending on what state you live in.

What are the fees: This is one of the big differences between a LendUp payday loan and other payday loan companies: there are no fees for borrowing.

What’s the interest: There is, however, interest charged, and it can be a lot. The standard APR for a LendUp loan is 210.48%, which is obviously high, but not as high as other payday loan services. If you continue to borrow from LendUp, the interest rate will drop as you pay back your loans on time. This is a great incentive for anyone who plans on using LendUp more than once.

What’s the length of the loan: You have 30 days to pay back your loan once you borrow.

What states are eligible: Like most payday loan services, LendUp is not available in all states, although they are constantly adding new states to their list. The best way to find out if LendUp is available in your state is to go to the site and check.