Align is a new type of lender that provides fast loans with flexible payment schedules to people with poor credit. Instead of charging borrowers interest in the traditional sense, Align requires them to pay a percentage of their income for a set period. This is called an Income Share Agreement. If their income drops or they lose their job, the loan payments drop accordingly. The company was launched in 2011 by Nathan Popkins. It has already issued over $4 million to more than 800 borrowers, and its growth is accelerating. Align is based in Chicago, IL, and has an A+ rating with the BBB.
Align provides cash in exchange for a small percentage (10% or less) of a borrower's income. Align doesn't require any collateral so borrowers can use the money for whatever they want. While detractors describe this relationship as a form indentured servitude, Align prefers to describe it as an investment in borrowers that struggle to find credit elsewhere. If the borrower is broke or has a low income, his payments will be low. However, when borrowers do well and their income increases, so do the payments.
In any case, Align does give borrowers the chance to buy out the loan by paying a lump sum. Exactly how much that lump sum will be depends on the terms of the agreement, which are provided once a borrower completes the loan application.
Because of the way Income Share Agreements work it’s impossible to say exactly how much interest a borrower will pay on a loan. It all depends on how much money the borrower makes during the period the Income Share Agreement is in place. However, Align provides a series of scenarios that specify the equivalent interest rate that will be paid in each scenario. According to Align, the average equivalent rate on loans has been in the mid-double-digits.
We applied for Income Share Agreements with incomes varying from $50,000 to $100,000 and terms ranging from 4 to 5 years. The equivalent APRs ranged from 37% to 94% APR.
Align provides loans ranging from $1,500 to $12,500.
Align operates in Georgia, Utah, Illinois, and New Mexico.
Align has an online application that only takes a few minutes to complete. Once you complete it, Align will give you a no-obligation quote for you to consider. At this stage, Align does not make a hard credit inquiry, so there is no risk to your credit if you decide to check your rate.
If you are interested in the Income Share Agreement, Align will request your permission to run a credit check and verify your bank account to check the information you provided in your application and verify your identity. Borrowers must have a credit score of at least 600 and an annual income of $20,000 or more.
Borrowers who satisfy Align’ eligibility criteria and provide the necessary information can receive their funds within one or two business days.
Align provides mid-double-digit interest rates to borrowers with poor credit. These rates are certainly not low, but they are much better than a payday loan. The application process is fast, and funds can be transferred within one business day.
One advantage Align has on other lenders is that payments are flexible. If you lose your job or your hours are cut, your payments will also drop. In certain circumstances, they could drop down to zero.
The catch is that payments also increase if your income increases. If your agreement calls for a 10% of your income and you make $10,000 a month, your payments will be a $1,000 a month regardless of how much you borrowed. However, you can always repay the loan early with no penalty or fees.
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