Fig Loans Review – An Alternative to Payday Lenders
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Sadly, it looks like high interest rates are here to stay for the foreseeable future. While it’s easy to blame the government for high interest rates, your credit score can also affect the annual percentage rates you qualify for.
This is one of the many reasons a bad credit score can be detrimental to your overall personal finances. When your score is low, you may find that the variable interest rate you pay on your credit card tends to be much higher than borrowers with more positive credit history.
So, what should you do if you’re looking to raise your credit score to set yourself up for more success in the world of personal finance? There are a few different financial products called credit builder loans that can help you build up your credit and improve your credit score. One company called Fig Loans positions itself as an alternative to payday lenders that will help you boost your score through simple, short-term installment loans. Learn more about Fig Loans and whether or not their small loan program is right for you in this review.
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What is Fig Loans?
Unlike other lenders or financial institutions, Fig Loans started as a project between Fig and United Way THRIVE, a nonprofit in Houston, Texas. They realized that businesses offering payday loans were becoming a major problem for a swath of working-class Texans and wanted to find a solution to this problem.
Their solution was two-fold. Fig would offer personal loans to individuals without input from credit reporting agencies like Equifax or TransUnion. That meant a hard credit pull wouldn’t affect individuals’ credit scores as they worked to rebuild them. Fig also reports all payments to these reporting agencies, meaning that as the short-term loan is repaid, individuals’ credit scores would improve, too.
The result of this values-based approach to creating and running Fig tech is a company that is honest about its loan terms, offers a clear and understandable loan application, and, according to its website, is about 60% cheaper than most of its competitors.
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How do Fig Loans work?
Applying for a loan from Fig Loans takes less than five minutes and only five steps. Start by navigating their webpage and clicking the “Apply” button.
You’ll start by being able to apply for a small loan between $50 and $500. As you repay your Fig Loans, the maximum amount Fig can lend you will increase. Note that Fig Loans spells out what you can expect to pay monthly as part of its loan program.
After you’ve selected your loan amount, you’ll complete a quick registration. This involves creating an account and password and completing a simple CAPTCHA process.
After this step, you’ll provide some personal information, such as your name and address, as well as more secure information to verify your identity and eligibility. This includes banking information used to verify your income and ultimately deposit your loan. From there, you’ll be on your way to getting funding!
How much do Fig Loans cost?
Unlike other lenders that tell you one thing only to tack on processing fees and other costs, Fig Loans is upfront about what they charge you for a loan. On the FAQ page of their website, they make this clear: "At Fig, we never charge late fees or late interest. We believe that you should know how much your loan will cost before you apply. That way, you can decide if the loan is right for you and your budget.”
An example on their website discusses a loan of $350 in Texas, which has an APR of 199% for a total amount repaid of $506.16. The repayment length is four months, for a total payment of $126.54 monthly throughout the loan. All of these fees are spelled out so that you know whether or not you’re comfortable taking the loan before you apply.
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- Subject to qualification and approval. $1,500 monthly income required.
- Apply in 5 minutes. If you qualify, chat online with a friendly online debt representative.
Fig Loans features
Fig Loans has a few popular features that help the company and its financial products stand out in a crowded field. Here are a few aspects of Fig Loans that make them worth considering if you’re looking to build credit or need a short-term loan.
Transparent fees
One important thing about Fig Loans is that transparency and clarity are paramount to their way of doing business. Many payday lenders take advantage of their borrowers, and Fig Loans wants to change that way of operating by being as clear as possible about their fees. With Fig Loans, you won’t get any extra charges in the form of late fees, and your monthly payments will stay the same throughout your loan.
Payments get reported to credit bureaus
While one selling point of Fig Loans is an alternative to payday lending for individuals experiencing financial hardship, another reason you might choose to take out a loan from Fig is to build your credit safely. All of your payments to Fig get reported to TransUnion, Experian, and Equifax from the first day you take out your loan. This helps boost the repayment aspect of your credit score so you can quickly begin to improve your credit history.
Easy rescheduling
If your payment date is no longer convenient for you, Fig makes it easy to reschedule your payment date and avoid late payments altogether. Fig lets you reschedule your payment for up to 28 days at no additional charge, and they will also work with you if you need to split your payment up to make payments on time.
Particularly if you’re using one of Fig’s emergency loans, this can give you peace of mind that you’ll actually be able to pay off your loan on your terms. Best of all, you can reschedule from your phone on the go.
Nearly instant funds
Convenience is one of the main reasons many people use payday lenders and cash advance apps in the first place. The need for quick funds in their bank account often outweighs any less-than-savory terms and fees.
With Fig Loans, you don’t have to compromise. When you apply for a loan through Fig, you’ll get your loan amount deposited into your checking or savings account in under 5 minutes.
Who is Fig Loans best for?
Individuals without the minimum credit score for traditional loans
There are myriad reasons that you may not have a high enough credit score to qualify for traditional loan products. Especially if you are trying to rebuild your credit, Fig Loans is an excellent strategy to leverage. With Fig Loans, you can apply for a loan without a hard credit pull as long as your income is otherwise steady and stable.
Borrowers without adequate emergency funds
If you’re looking for a short-term loan to weather an emergency and your emergency fund isn’t built up, Fig Loans is well worth considering. Fig Loans specializes in financial hardship loans, letting you beef up your account balance so you can use your debit card to handle whatever obstacle has come your way.
People who need cash now
Many other lenders take a few days to deposit their loans into your account. With Fig Loans, you’ll get money fast. Upon approval, your Fig Loan will hit your bank via direct deposit in as little as 5 minutes.
Who shouldn’t use Fig Loans?
People outside of Fig’s states of operation
Fig Loans is a great company, but its loans are only available in a limited number of areas. Unless you live in Texas, California, Missouri, Ohio, Utah, or Florida, you may not be eligible for a loan from Fig. In these situations, you’ll need to look elsewhere for a similar lender.
People with solid credit history
Suppose you don’t need to rebuild your credit. In that case, you’ll likely not need to take out a loan with Fig. While their terms may be competitive compared to other short-term options on the market, if you have a good credit score, you’ll generally qualify for better terms from another lender.
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- Subject to qualification and approval. $1,500 monthly income required.
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Pros and cons
Pros
- Easy application. Fig Loans’ application process is straightforward and fast. Most borrowers complete their loan application in under five minutes.
- Reschedule from your phone. The flexibility to reschedule your payment date up to 28 days (for free!) is a major boon for borrowers facing financial hardship.
- Transparent pricing. With transparent pricing, what you see—and agree to—is what you get. You won’t experience any “gotcha!” moments as a borrower with Fig Loans.
- Overwhelmingly positive customer reviews. Customer reviews on Google and TrustPilot are quite positive for Fig Loans. Their average Google review is 4.7 out of 5 stars (from a total of 1,800+ reviewers), and TrustPilot also gives them an average of 4.8 out of 5 stars (from 6,165 reviews at the time of writing).
Cons
- Geographically limited. Fig Loans is relatively nascent in terms of its national reach, meaning that you may not live in a state where their services are valid.
- Customer service can be hard to reach. Fig Loans’ process typically goes quite smoothly. However, some users report that customer service leaves a bit to be desired when something goes awry, and help is needed over the phone or email.
- May not get future funding. Some repeat users of Fig Loans have reported getting applications for additional loans denied even after they’ve received and paid back funds on time with the company. As such, you may want to explore other companies if you consistently need to use personal loans as a form of cash advances.
- High APR. As seen in the example on their FAQ page, the APR of a Fig Loan can sometimes be quite high. You may want to weigh your options before committing to a loan from Fig.
Fig Loans vs. competitors
Financial product | Average APR | Average Savings | Loan Amounts |
Fig Loans | 35.99%+ | 60% | $50- $500 |
Credit Karma | 24.95%+ | 25% | $1,000 - $50,000 |
MoneyLion | 8.99% | 70% or more | Up to $1,000 |
Credit Karma
Credit Karma helps you find personal loans that fit your profile and needs, with loan amounts ranging from $1,000 to $50,000. These loans start much more substantial than Fig Loans, which may be good for some lenders. On the other hand, Credit Karma only boasts an average savings of 25% compared to other lenders. The average APR is probably much higher when using the platform if you have bad credit.
MoneyLion
MoneyLion boasts an incredibly low APR and high average savings on loans up to $1,000. The only hitch is that MoneyLion charges those using its credit builder loans a monthly subscription fee of $19.99. That may or may not be higher than your APR, meaning that things aren’t quite as good as they look on the surface. This sort of practice would likely not fly at Fig Loans, where clarity and transparency are critical elements of how they present themselves.
FAQs
What states are Fig Loans available in?
While Fig Loans began in Texas in 2016, they have since expanded to several other states. As of writing, borrowers in Texas, California, Missouri, Ohio, Utah, and Florida, are all eligible for loans from the loan company.
How does a Fig Loan affect my credit score?
Since Fig Loans doesn’t do a hard credit pull when checking your eligibility, you won’t need to worry about a loan application dinging your credit. Additionally, Fig Loans’ installment loan payments are all reported to each of the three credit bureaus, enabling you to increase your on-time repayment metric and boost your credit score.
How long does a payment take to process?
When paying by debit card, your payment generally processes in 2-3 days. When paying by ACH bank transfer, your payment to Fig Loans will typically take up to 5 days. In either scenario, Fig will email you to let you know that your payment was successful.
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The bottom line
Offering credit-building short-term loans and loans for financial hardship, Fig Loans is a helpful lending option in a sea of predatory payday loans and other opportunistic financial products like car title loans. Governed by its values of honesty, transparency, and fairness, the company has a lot to like. Top features include the ability to reschedule your payment date and the opportunity to get a loan without a hard credit pull.
While there are many advantages to Fig Loans, the APR rates can start quite high. Additionally, since you can only get started with smaller loans of $50-$500 as you’re starting, Fig Loans may not be the best option for those with serious financial hardship.
Of course, a smaller loan amount is much easier to repay if you're looking at Fig for credit building. Additionally, high APRs are a small price to pay if you have a poor credit history which would otherwise disqualify you from being eligible for certain financial products. Ultimately, whether or not you choose to use Fig Loans is up to you, and if you’re in a state where it’s offered, it may be well worth considering.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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