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Align Income Share Funding is a personal loan alternative that takes a percentage of your future income, rather than applying interest, for repayment. In fact, it’s one of those rare financing unicorns that’s actually more expensive the more you make.
$12,500
Max. Loan Amount
600
Min. Credit Score
Product Name | Align income share agreements |
---|---|
Max. Loan Amount | $12,500 |
Interest Rate Type | Variable |
Min. Credit Score | 600 |
Loan Term | 2 to 6 years |
Throw out everything you thought you knew about loans — okay, not everything. What Align offers doesn’t come with interest or origination fees. Instead, it funds what’s called income share agreements (ISAs). This is a contract between Align and a borrower, where Align gives a borrower money in exchange for a percentage of their future income — up to 10%.
It’s particularly useful for someone who needs to borrow money but doesn’t have a steady income or doesn’t expect to make much over the next few years. The cost of your ISA goes down if your income takes a dip. If you lose your job, you don’t have to make repayments until you start earning again.
Align is a startup financial institution that’s one of the few places you can get an ISA in the US. Formerly known as Cumulus Funding, Align was started in 2011 in Chicago as a partial response to the 2008 financial crisis. The idea was to provide an alternative to loans to people who might not qualify for funding from traditional financial institutions or could have trouble making repayments because of an unstable income.
Other companies offering ISAs tend to market it as an alternative to private student loans, but you can use an ISA from Align for any legitimate expense, including medical bills, weddings and even debt consolidation.
An income share agreement is a type of borrowing in which you receive funds and then pay back a percentage of your income over a fixed period of time.
Align income share agreements are similar to traditional loans in a lot of ways. Align gives you funds, which you agree to pay back over a fixed period with a percentage of your income. Align determines this percentage based on factors like how much money you need, your credit history, how long you need to repay the loan and your income. The key difference between an ISA and a personal loan is that the cost of your financing is determined by your income, not how much you owe.
Not much. Align’s Better Business Bureau (BBB) page earns an A- rating, solely based on the fact that it failed to respond to a customer complaint. It has no reviews on its BBB page and isn’t accredited.
Align does better on Trustpilot. As of March 2019, it scores a 9.4 out of 10 based on over 300 reviews. Customers rave about Align’s speed, customer service and the fact that it offers a financial product that doesn’t depend on your income.
At least one reviewer was unpleasantly surprised at how much that percentage of their income actually amounted to when their repayments were due. At least two others were upset because Align rejected their application because they didn’t work at least 35 hours a week (one claimed they had proved they did, another said it shouldn’t matter because they had such a high income).
To meet Align’s most basic requirements, you must:
It’s time to start making repayments to Align, plus a percentage of your monthly income. Keep track of how much you owe and anticipate changes in your repayment if your income fluctuates from month to month.
If you get a raise, a higher-paying job or other source of income, you might want to consider buying out your contract — paying back the remainder of what you owe at once — to avoid having to pay larger fees.
If you lose your job or a source of income, let Align know. You won’t need to make any repayments until you start making money again.
Align is one of the rare companies offering financing that’s more affordable to low-income borrowers than their high-rolling counterparts. ISAs could be a lifesaver if you have a low income or are uncertain you’ll have steady income in the future.
However, it might not be worth it if you make more than the minimum income requirement of $22,000. Read our guide to personal loans to see how Align compares to other financial institutions.