Elastic offers unsecured personal lines of credit up to $4,500 to borrowers who may struggle to get financed elsewhere. The company makes clear that the credit it offers is high-cost — it’s not intended to satisfy long-term loan needs, and other options may be less expensive.
How a line of credit works
A line of credit is similar to a credit card. They’re both revolving forms of credit, and you can borrow up to the amount of your credit line. However, you can’t use a line of credit like a credit card — you won’t carry it in your wallet and tap it at stores, for example. But you can typically use it to pay off bills, write checks, withdraw money, or transfer money to your bank account.
A line of credit is also sometimes confused with a personal loan. But unlike a line of credit, a personal loan provides a lump sum upfront that’s equal to the amount borrowed (minus any origination fees). Another difference is that the annual percentage rate (APR) on a personal loan generally tops out around 36%, while it can be in the triple digits with an Elastic line of credit.
How an Elastic line of credit works
Elastic does not have a minimum credit score requirement to qualify for a line of credit, and instead of charging interest, it charges cash advance fees and carried-balance fees. If approved, your credit line could be as high as $4,500 — Elastic will determine that based on your financial profile.
Cash advance fees
Once approved, you can request money up to the amount of your credit limit. Cash advance fees are either 5% or 10% of the amount borrowed, depending on whether you choose a bimonthly or monthly billing cycle, respectively. They’re deducted from your credit line. If you pay off an Elastic cash advance within the first billing cycle, you’ll only pay the cash advance fee.
For example, if you borrow $1,000, and choose a monthly billing cycle, Elastic would add a $100 cash advance fee (10% of $1,000) to your balance, plus the amount you borrow. If you pay that $1,100 off within the first monthly billing cycle, the APR would be 120%.
Minimum required payments
Like a credit card, Elastic requires minimum monthly payments if you carry a balance forward after the first billing cycle. The amount you’re required to pay depends on your billing cycle type and outstanding credit limit, as follows:
- Biweekly or semimonthly billing cycle: The greater of $50 or 5% of your outstanding balance, plus the carried-balance fee. Balances less than $50 are due in full.
- Monthly billing cycle: The greater of $100 or 10% of your outstanding balance, plus the carried-balance fee. Balances less than $100 are due in full.
Past-due amounts are due in addition to your minimum monthly payment, but they’re not considered when calculating the minimum payment for the current billing cycle.
Carried-balance fees
If you carry a balance beyond the first billing cycle, you’ll be charged a carried-balance fee for each cycle, based on your balance and the billing cycle you chose (monthly or bimonthly). Elastic’s carried-balance fees are below. Note that you can only maintain a balance for up to 10 months. And that’s a good thing, because doing so can get extremely expensive.
Let’s continue our example to illustrate. The minimum required payment on a $1,100 balance on a monthly billing cycle would be $200 — $110 (10% of $1,100) plus a carried-balance fee of $90. But let’s say you decide to pay the entire balance plus the fee off instead, for a total of $1,190. The APR would be approximately 164%.
View all of Elastic’s carried-balance fees.
Important
If you open a credit line with Elastic, plan to borrow only what you can pay off within the first billing cycle to avoid very high APRs, and a potentially debilitating cycle of debt.
Elastic pros and cons
Elastic line of credit details
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What to consider before applying for an Elastic credit line
If you need a repayment term longer than one month, compare rates and see if you can qualify for a personal loan for bad credit first. Personal loan interest rates are generally capped at 36% (and could be much lower). Loan repayment terms can extend to seven years or more.
