Fig Loans is an online lender that specializes in offering quick funds and credit building products to low-income individuals. In their mission, Fig states its commitment is “to offer financial products to our customers in a socially responsible way.” They emphasize transparency, flexible repayment, and low fees in order to help customers regain financial footing.
Fig currently offers two types of loans to customers, each with very distinct goals.
The original Fig Loans product, the installment loan is designed to provide an affordable alternative to a traditional two-week payday loan.
Borrowers can take out installment loans in amounts ranging from $300 to $500. The loans offer rapid funding upon approval. Each of the five states where these loans are available has unique rates and terms based on local regulatory requirements.
The Credit Builder loan helps customers with poor credit build credit scores up over time through a reverse loan. Unlike traditional loans, reverse loans collect monthly payments over the designated period before any funds are disbursed. At the end of the period, the borrower receives the full principal amount.
Collected funds are held in a third-party account, similar to a savings account. Monthly payments are reported to the major credit bureaus as on-time payments. In this way, borrowers can build up a payment history and improve their credit scores each month.
Fig Loans are currently only available in five states. Each individual state where Fig Loans operates has distinct rate terms and availability based on specific regulations:
While an interest rate between 176 percent and 199 percent might seem high, these rates are significantly lower than those of payday loans. Payday lenders often offer APRs as high as 700 percent.
Borrowers make payments in monthly installments over the loan term, similar to a home loan or other secured loan. In contrast, payday loans generally have a balloon payment structure, requiring a large payment at the end of the loan term. These large payments can be difficult for borrowers in deep financial need.
One of the cornerstones of Fig Loans is transparency in fees compared to payday loans and emergency funding. There are fewer fees than one might encounter in a loan for a similar amount.
Fig Loans does not charge an origination fee. Payday lenders often charge an origination fee of anywhere from 0.5 percent to 5 percent of the principal to cover the costs of servicing the loan.
Fig Loans works closely with borrowers to offer flexible payment dates. If for any reason a borrower can’t make a payment on time, they simply need to call customer service and request a change.
If you do miss a payment, you will receive a fee in the form of an interest rate increase. Borrowers are responsible for keeping a close eye on their loans. Fig’s service model is built on mutual trust and direct cooperation between borrower and lender. That strategy only works if borrowers take an active part in their financial situation.
Fig doesn’t charge an additional fee for repaying the full loan early. On the contrary, they actively encourage early repayment. Borrowers who repay early can receive lower interest rates and higher loan amounts on future loans.
Fig Loans offers a unique model where, after successfully satisfying the terms of a loan, borrowers become eligible for higher-dollar loans at a reduced APR. The current maximum loan amount for repeat borrowers is $800.
Refinanced loans are not eligible for lower rates. They are subject to fees and maximum rates.
While Fig does charge NSF fees, their philosophy is to work with borrowers in taking every precaution against them. By offering flexible terms and no change fees, avoiding NSF fees is extremely easy.
If choosing to pay with a debit card rather than ACH from a checking account, a borrower in Ohio, Missouri, Texas, or Utah will be charged a 3 percent processing fee. There is no debit card processing fee in Illinois.
Fig Loans are specifically designed for quick emergency funding. Approval often comes on the same business day as an application, and funds are received within 4 business days.
For borrowers in Texas who need to improve their credit scores, Fig offers Credit Builder loans that report on-time payments to TransUnion and Equifax through the nonprofit Credit Builders Alliance.
Typical APR on Credit Builder loans is 18.85 percent. The typical loan term is 12 months, but loans can be canceled at any time with no penalty.
There is a one-time account opening fee equal to a monthly payment in order to cover origination and processing costs. All other fees are included within the APR.
Credit Builder offers reverse loans in amounts ranging from $500 to $1,000 on monthly payment schedules.
Funds are disbursed at the end of the 12-month term. If the loan is canceled, a prorated amount will be disbursed in the month of termination. For example, if a borrower decides to cancel their Credit Builder loan after ten months, they will receive the principal amount minus the outstanding payments.
In order to qualify for a Fig Loan, borrowers must:
Fig Loans does not use employment status as a factor in determining loan eligibility, often a barrier for individuals who are unemployed or self-employed. Potential borrowers only need to show a minimum annual income of $16,800 or higher.
There is no stated credit score requirement to apply for Fig Loans. However, reports suggest that individuals should have a credit score of at least 300 in order to qualify. Borrowers with poor credit are encouraged to apply in order to work on improving their credit scores.
To apply for a Fig Loan, prospective borrowers must first visit the Fig Loans website and create an account. After agreeing to customer disclosures, the site will prompt individuals to enter their personal information, including Social Security numbers and bank account numbers.
Because Fig Loans is dedicated to helping their customers improve their financial health, they do not perform a hard credit check during the application process. This fact means that applying for a Fig Loan is unlikely to negatively affect your credit score.
Fig Loans will use your bank account information in order to perform bank verification. This process allows Fig to see your bank statement for the purposes of verifying your financial information. The procedure is handled by a third party, so Fig never has access to your bank login information.
Customer support is available via multiple channels. Email is encouraged to get the quickest response, as phone calls are only answered during business hours.
Current customers are also able to view their loan, make payments, and contact customer service through a secure online portal.
Fig Loans is neither rated nor accredited by the Better Business Bureau. However, they have a 5-star rating on Trustpilot, with a 94 percent “Excellent” rating. The next most common rating is “Great” at 3 percent.
Of 273 consumer reviews, common points of mention are:
Additionally, many reviewers mention that Fig Loans helped them with funding needs when other methods wouldn’t.
Fig Loans is ideal for individuals in need of quick funds who are interested in repairing their credit. By working on their credit with Fig Loans, many borrowers are able to increase their credit scores, later qualifying for home and auto loans that might have otherwise not been available.
Fig Loans was founded in 2015 in Houston, Texas as a collaboration with United Way THRIVE. The aim of this partnership was to reduce the impact of harmful, high-APR payday loans on low-income communities.
Because of THRIVE’s involvement, the impact of predatory payday loans in low-income communities was carefully considered when developing their loans. Fig Loans designed their products to offer sustainable funding and credit assistance to those who need help most.
Founder Jeff Zhou has been featured in Newsweek, The New York Times, and USA Today discussing the importance of offering affordable alternatives to expensive payday loans. He says his interest in offering people assistance comes from his personal background as a scholarship student at Phillips Academy in Andover, MA.
Social responsibility is the cornerstone of the Fig Loans product. In addition to offering direct consumer loans, they also offer a “plug and play” option called Fig 36. This program allows community nonprofits who don’t have loan underwriting or servicing resources to offer their own loan programs.
Since its founding, Fig has expanded to offer loans in Illinois, Missouri, Ohio, and Utah in addition to Texas.