Align Income Share Funding review — an alternative to personal loans
Get up to $12,500 and pay what you can afford.
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.
How does Align Income Share Funding work?
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.
What is Align?
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.
What exactly is an income share agreement?
An income share agreement, or ISA, is a borrowing option where you receive funds and then pay back a percentage of your income over a fixed period of time.
How makes Align Income Share Funding unique?
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.
What are the benefits of getting an Align ISA?
- Cost based on income. While you need to make fixed repayments on the amount you borrowed each month, how much extra you pay depends on your income.
- No income? No repayments. As long as you’re able to prove that you don’t have any income after you’ve signed your ISA, you’re off the hook for repayments until you get back on your feet.
- Fast funding. Get money deposited into your bank account in as little as one day.
- No prepayment penalty. Some ISA providers hide high prepayment penalties and other sneaky fees in their contracts — but not Align. Save on the cost of your income share agreement if you pay back the amount you borrowed early.
What to watch out for
- Expensive for high-income borrowers. If you make $100,000 a year and agree to an ISA for a two-year term, it could end up costing you as much as $20,000 on top of your loan repayments.
- Only available in seven states. Align only offers ISAs if you live in Arizona, California, Delaware, Florida, Illinois, Montana and Wisconsin.
- New territory. While Align has been around since 2011 — practically a grandparent in the fintech industry — Align’s approach is still relatively untested. A customer service rep told us it was only available in a few states because it was a startup, making us wonder if it’s found firm standing yet.
- Fixed base repayments. While how much you pay to Align changes each month, depending on how much you earn, you still have to make fixed repayments on the money you borrowed until your salary goes down to $0.
- Small amounts. You’re out of luck if you’re looking to borrow more than $12,500 — Align’s maximum amount.
Want a traditional loan? Compare personal loan offers
What do borrowers say about Align?
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 proven otherwise, another said it shouldn’t matter because they had such a high income.
Am I eligible?
To meet Align’s most basic requirements, you must:
- Make at least $22,000 annually.
- Have a credit score of 600 or higher.
- Live in Arizona, California, Delaware, Florida, Illinois, Montana or Wisconsin.
- Have a personal checking or savings account.
- Work at least 35 hours a week.
How do I apply?
- Go to Align Income Share Funding and choose Apply Now.
- Fill out the required fields, read the terms of service and consent forms before selecting Agree and Get Your Free Quote. This step will not affect your credit score.
- Provide Align with additional information about your personal finances and verification of your address and income to complete your application after you’ve been preapproved.
- Read Align’s ISA offer carefully before signing and submitting the contract.
- Receive your funds in your bank account in one to three business days. Most people get their money the next day.
Step-by-step application with screenshots
I got an ISA from Align. Now what?
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.
Frequently asked questions
Is the income-based fee calculated before or after taxes?
Align’s fees are based on your pretax income.
How can I prove that I'm unemployed?
Align asks borrowers to submit documents showing that they’re receiving unemployment benefits or a formal notice of separation from your former employer. If you’re in a unique situation where neither apply, reach out to Align to see if it can adjust your contract.
How do I qualify for an ISA if I live in an eligible state but my bank account is based somewhere else?
As long as you can provide proof that you live in one of the states where Align operates and your bank account has been open for over 90 days, you're good to go.