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Fig Loans: 8 Facts About Them That You Need to Know It's happened again. Your bills are due, but you're short on funds. Not only that, but your credit score has tanked and traditional lenders are ignoring you. Many creative people have been there—we get it and have been there! Roughly 12 million Americans turn to personal loans, often referred to as payday loans, every year. It’s a $320 billion dollar industry and it's growing. For struggling writers, poets, and photographers—or any artist who needs a financial break—we need options for small loans to help us get by so we can keep creating art, but we don't want to fall prey to predatory lenders. FigTech is a different kind of company. They offer solutions for people on the lower rungs of the economic ladder who may have low credit scores as well. Their financial products, like Fig Loans, make it possible to borrow money with no late fees, no credit check, and that even boost credit scores. Here are 8 facts about Fig Loans you may not have known: 1. Fig Loans Aren't Payday Loans A payday loan is a common term for the type of loan offered to people in financial distress. These loans are intended to get people through until the next payday, but the loan amounts are small and the interest is high. This only hurts the borrower more and damages their credit further. Jeff Zhou founded FigTech in 2015 in partnership with the United Way of Greater Houston as an alternative to payday loans. FigTech works with several nonprofits in the Houston area to provide financial services to underbanked communities. The mission of the company is to help low-income families borrow small amounts to cover expenses and to raise their credit scores. They do this through their financial products, Fig Loans, and Credit Builder Loans. 2. FigTech Is Socially Responsible FigTech is the first financial technology company to receive CDFI and B Corporation certification. CDFI stands for Community Development Financial Institution and it's awarded to financial companies who work with low-income communities. B Corporation status is awarded to companies whose services make a positive social impact on the communities they serve. FigTech provides its loan management software, Fig36, to nonprofits. They also fund the FigTech Scholarship. 3. Available In Five States FigTech is based in Sugar Land, Texas, but has expanded services to Illinois, Missouri, Ohio, and Utah. Fig Loans are available in amounts of between $300 and $500 with the exception of Ohio, which offers amounts between $200 and $400. The annual percentage rate also varies by state. The APR is 190% in Utah, Missouri, and Texas, 176% in Illinois, and up to 199% in Ohio. 4. Pay Bills Fast FigTech offers two types of financial products; a traditional loan and a credit builder loan. Their traditional loan, in amounts of up to $500 ($400 in Ohio), is to be repaid over four months in all states except Illinois which offers a 180-day repayment plan. Applicants are notified within 24 hours if they've been approved. Repeat customers in good standing may see the limit raised to $800 on subsequent loans. 5. Raise Credit Scores A credit builder loan is different in a significant way. The borrower of this non-traditional loan makes monthly payments which are held by a third-party financial institution. Fig charges a fee to set up the account, but when the loan is complete, the borrower gets their full principal back. The payments are reported to credit bureaus and their credit scores go up. Credit repair loans are for people with credit scores below 520. People with low credit scores have difficulty renting apartments, getting credit cards, and making major purchases. Since they are considered too risky for traditional loans, this limits their options and prevents them from moving up the economic ladder. Credit builder loans work better for some people than others. The lower the credit score, the better the results. For example, people with credit scores between 350 and 499 will see a 94 point boost on average. For borrowers with scores between 500 and 549, the average increase is 47 points. People with scores in the 550 to 599 range can expect to see an average increase of 23 points. 6. No Late Fees Late fees are devastating to people who are struggling financially and FigTech understands this. There are no fees for late payments on FigLoans, but payments not received within 30 days of the due date are reported to the credit bureaus. Some Fig loans reviews point out that the company works with borrowers who have difficulty making payments. Borrowers may only receive one loan at a time. The loan amount must be repaid in full before another loan is given. This keeps people from taking on too much loan debt. The payments are equal amounts and don’t balloon up at the end of the loan period. There’s also no fee for early repayment. 7. No Credit Check Required Fig Loans do not require a credit check before approval. One of their selling points is that they offer loans to help boost credit scores with their Credit Builder loans. Prior to approving a loan, they review the borrower's prior loan payment history and employment income. 8. Applying Is Easy Borrowers can apply through FigTech's website. They must provide basic information like name, address, and social security number. They will also provide their banking information which is then verified through the verification software app Plaid. In addition to being a resident of Texas, Ohio, Illinois, or Utah, borrowers must meet the following qualifications:
Don't Be a Starving Artist There are many things that creative people can do to be financially responsible as they create their art. Keeping money in a savings account and avoiding credit card debt are key. Sometimes, we just get behind as we pursue dreams of artistic freedom. It's good to know that Fig Loans are there as an alternative to payday and car title loans. CommentsComments are closed.
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