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Align Income Share Agreement Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

If you need money — such as to cover an emergency expense or to consolidate debt — but you’re worried about high-interest rates you might face with a personal loan, there is an alternative funding option you may consider: an income-share agreement (ISA).

An ISA doesn’t come with a set interest rate. Instead, you pay a percentage of your yearly income every year for a set number of years, paying back what you originally borrowed plus more.

Chicago-based Align Income Share Funding is one source of this type of agreement. The company has been providing ISAs since its founding in 2011. In this review, we’ll explain how Align’s ISA works and whether it might be a good fit for you.

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Align income share agreement details
 

Fees and penalties

  • Terms: Align states that its income-share agreement runs from 24 to 60 months. However, that may depend on your location.
  • Borrowing cost: Align doesn’t charge traditional interest rates on its loans. Instead, it charges a percentage of your income, no more than 10.00%. Say you make $40,000 a year. You might agree to spend 3% of your income each year to repay your loan, or $1,200. If you borrow $4,000 and you sign an agreement to pay back your loan over four years, you’d end up paying $4,800, or $800 more than what you initially borrowed.
  • Borrowing limits: Align will loan you a maximum of $12,500.
  • Time to funding: Align says that you once you sign your contract, it can deposit funds in your bank account in as little as one business day.
  • Hard pull or soft pull? Soft Pull. You can get a quote for an ISA on Align’s website and it will not impact your credit score.
  • Origination fee: Align does not charge origination fees.
  • Prepayment fee: Align also does not charge a prepayment fee. However, there is a cost for getting out of your agreement early.

There are no limits on how you can use your funds from an Align ISA. You can use the money for everything from consolidating high interest credit card debt to paying for home repairs or a dream vacation.

Align is flexible, too, when it comes to determining your income. As the company’s website states, anything listed in box No. 1 of your annual W-2 form can be considered income.

Eligibility requirements

  • Minimum credit score: Not specified.
  • Minimum credit history: Not specified.
  • Maximum debt-to-income ratio: Not specified.

Align doesn’t say much about the minimum credit scores or debt-to-income ratio you will need to qualify for an income-share contract. Their website, however, specifies that they’ll consider your income, creditworthiness, job, and location when determining whether to approve your request for funds.

How Align’s income-share agreement works

This yearly percentage is broken up into monthly payments. Say you borrow $8,000 from Align and you earn $30,000 a year. If you agree to pay back your ISA at 10% of your yearly salary for three years, you’d pay Align $3,000 a year, at $250 a month. After the three-year repayment period has ended, you’d end up paying a total of $9,000, or $1,000 more than you borrowed.

When you set up your contract, you pick a date on which you want to pay each month. Align then automatically deducts that amount from your checking account.

As your income changes, so can your monthly payment. If your income goes up, the percentage you contribute will remain the same. But because your income is increasing, the overall amount you pay will jump, too.

It works the other way, too. Align says that if your income falls, you will pay less. If you become unemployed and you have no income, your monthly payment could potentially fall to $0. If you become unemployed, you will have to submit proof that you are not working, such as a notice from your former employer or documents showing you are receiving unemployment benefits.

Applying for an income-share agreement from Align

Applying for an ISA from Align is a simple process. Just click on the “Apply Now” button on the company’s homepage. Once you do, you’ll be asked to provide your name, date of birth, Social Security number, email address, physical address and phone number.

Align will also ask for your gross yearly income, your income source and the industry in which you work. You’ll also need to provide your education level, estimated credit score, the amount you’d like to borrow and what you want the money for.

After filling in this information, you will then submit your application for an online quote. If you are interested, you can contact Align to speak with a representative who will verify your income, job status and credit. Once this is done, Align will make you an official offer stating how much it is willing to lend you and at what percentage of your yearly income. Align will also state how many months you will make payments, and how much you will pay each month and each year to pay off the money you received.

If you like the offer, you will sign your contract. Align will then deposit your funds into your bank account in as little as one business day.

Pros and cons of an Align income share agreement

Pros:

Cons:

  • No interest rates: Align doesn’t charge interest rates for its loans. However, you will have to pay a percentage of your annual income for a set number of months to pay back your loan.
  • No origination fees: Applying for a loan at Align is free. The company also doesn’t charge you for the work involved in originating your loan.
  • Protection if you lose your job: How much you pay is based on how much you earn, so you won’t have to make any payments if you lose your job and your income.
  • Applying is fast: You won’t have to meet in person with a lender to get your money. You can start the process online. You will have to speak with a representative to verify your financial information.
  • Monthly payment may change: Your monthly payment can vary because Align charges you a percentage of your gross income to lend you money. If your income fluctuates, your monthly payment will, too. This can be challenging when you are making a household budget.
  • Not everyone is guaranteed an ISA: Align looks at your credit score, income and employment status when determining who qualifies for funds. There is no guarantee of approval.
  • Paying out of your contract may be pricey: You can end your contract with Align before your term ends. This will cost you, though. Align lists in your contract the amount of money you’d have to pay to get out of your ISA early.

Who’s the best fit for Align Income Share Funding?

An Align ISA can work for people who aren’t afraid of a little uncertainty and are worried about high interest rates. Because Align charges a percentage of your income, your monthly payments can increase or decrease. If you don’t mind this uncertainty, an Align ISA might be a good choice.

This type of agreement might work, too, if you have a relatively low income. But if your income is high, or if you expect it to rise in the near future, an ISA might not be a good fit — your monthly payment could jump too high.

Alternative funding options

LendingClub

APR

6.95%
To
35.89%

Credit Req.

Not Specified

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

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on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 0.... Read More

LendingClub is an online lender providing personal loans up to $40,000. Unlike Align, LendingClub provides traditional loans with a fixed interest rate. This means that your payments remain the same every month, a benefit when you are overseeing a household budget. LendingClub does not charge prepayment penalties, but it does have an origination fee between 1.00% - 6.00%. Anyone seeking more certainty with their loan payments should explore this option.

SoFi

SoFi
APR

5.99%
To
17.67%

Credit Req.

680

Minimum Credit Score

Terms

24 to 84

months

Origination Fee

No origination fee

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Advertiser Disclosure

SoFi offers some of the best rates and terms on the market. ... Read More


Fixed rates from 5.990% APR to 17.67% APR (with AutoPay). Variable rates from 5.60% APR to 14.700% APR (with AutoPay). SoFi rate ranges are current as of August 7, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.60% APR assumes current 1-month LIBOR rate of 2.27% plus 3.08% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

All rates, terms, and figures are subject to change by the lender without notice. For the most up-to-date information, visit the lender's website directly. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.

See Consumer Licenses.

SoFi Personal Loans are not available to residents of MS. Minimum loan requirements might be higher than $5,000 in specific states due to legal requirements. Fixed and variable-rate caps may be lower in some states due to legal requirements and may impact your eligibility to qualify for a SoFi loan.

If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

SoFi is another popular source of personal loans. This online lender also provides traditional loans, with interest rates lower than many lenders because it primarily targets borrowers with great credit. SoFi charges no origination fee or prepayment fees and temporarily pauses your payments if you lose your job.

Payoff

APR

5.99%
To
24.99%

Credit Req.

640

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

up to 5.00%

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on LendingTree’s secure website

Advertiser Disclosure

Payoff is a financial services firm that offers personal loans mainly to help consolidate credit card debt.... Read More


All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

Another online lender, Payoff lets you apply online for a personal loan. The company charges no application fees, and applying does not impact your credit score. You can choose a loan amount between $5,000 to $35,000 and terms from 24 to 60 months.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dan Rafter
Dan Rafter |

Dan Rafter is a writer at MagnifyMoney. You can email Dan here

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Where U.S. Families Are Leaving in Droves — and Where They’re Moving to

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

While some media outlets report increasing challenges for families seeking a comfortable life in America’s biggest cities, leading to declining birth rates, other research claims most cities and metropolitan areas are as family-friendly as the nation as a whole. What’s clear is that the cost of living, and in particular the cost of childcare, presents significant challenges for those raising children in 2019 and beyond.

We analyzed U.S. Census Bureau migration data to understand which areas families with children are moving to, as well which metropolitan areas they are moving away from. For the purposes of this article, we defined a family as any household with children under the age of 18. Final rankings were determined by subtracting the number of families who left a metro area between 2016 and 2017 from the number of families who moved in.

Key findings

  • Riverside, Calif., took the top spot for highest migration, with a net inflow of 6,279 families. Nearly 15,700 families moved to Riverside while just under 9,400 left.
  • Phoenix, Ariz., was the second most popular spot for families to move to. In total, this metro saw a net inflow of 5,580 families. This city is also known for being a destination of choice for retired seniors and snowbirds, thanks not only to good weather but also retirement-friendly tax laws.
  • The country’s largest city, New York, saw about 38,100 families leave and 13,149 move in. This created a net outflow of just under 25,000 families, making it the city families are most likely to leave.
  • Other big cities like Los Angeles and Chicago did not perform well in this analysis, either, ranking second and third for net outflow of families. The good news for big cities is that they are the ones best able to recover from the loss of families. With a large population of young people, it is possible these cities can naturally replace the families leaving.
  • Apart from the three largest cities, other large cities round out the bottom 10. San Francisco, Washington, Miami, San Diego and Seattle all saw a net loss of families from migration.
  • On the state level, the most popular states for families to move to were North Carolina, Massachusetts and Texas. Those states saw a net gain of 10,108 families; 8,092 families; and 7,643 families, respectively.
  • The worst-performing states, according to our analysis, were New York, California and Indiana. New York lost 23,276 families; California lost 15,690; and Indiana lost 7,670.

Which states families are moving to

Riverside, Calif., ranks first on our list of the top 25 places families are migrating to. It’s followed closely by Phoenix, then by Tampa, Fla.; Portland, Ore.; and Orlando, Fla.

Surprisingly, these states rank relatively low on MagnifyMoney’s list of the top 25 happiest states in America. In that study, Arizona ranked 17th, followed by Oregon at 18th, while California and Florida came in 21st and 29th, respectively. Diving deeper into the categories that contributed to residents’ happiness, California ranked 11th in health, while Florida came 46th in economic stability.

Surprisingly, while the state of Arizona has a lower total population overall than California or Florida, its capital city, Phoenix, ranked second in the number of new families moving in. Florida is also a hot spot for educated workers who are drawn to its relatively low cost of living and low unemployment rates. These are some of the attributes responsible for two cities in Florida ranking in the top five places families move to.

Which states families are moving from

The largest exodus of families comes from the nation’s largest cities. The top five cities families are moving away from include New York, which is at the very top of the list with a net mobility of almost -25,000.

The difference in net mobility between New York and Los Angeles, the next city on the list, is more than 10,000 families. Chicago, San Francisco and Washington follow more closely behind.

These numbers support the recent MagnifyMoney happiness study that ranked New York the 39th happiest state in the U.S. and second-to-last in economic stability overall, just above the state of Louisiana. Another MagnifyMoney study ranked Washington and San Francisco among the top three most expensive cities in the nation, where even a six-figure salary may not be enough to afford housing and transportation costs or live a comfortable lifestyle.

On the other end of the spectrum, Colorado ranked third-happiest state in America, and Fort Collins, Colo., is lowest on the list of metropolitan places families move away from. It also has the second lowest number of families who are moving in.

The cost of moving

From packing supplies and moving trucks to hiring staff and taking time off work, moving and relocation expenses can put a significant dent in a family’s savings. On average, it costs between $2,000 and $5,000 per move more than 100 miles away, according to Consumer Affairs.

You may want to start saving for moving expenses now — or consider options such as an introductory 0% APR credit card or personal loan — to cover costs when making a move with your family across state lines. That’s especially true if your company won’t cover moving expenses.

If you decide that a personal loan is the best option for you, try searching for the best interest rates and repayment terms on MagnifyMoney’s personal loan comparison tool, where you can see if you qualify for personal loan offers.

Methodology

In order to rank the places where families were moving, researchers looked at the number of families who moved from one metro area to another from 2016 to 2017. To define family, we looked at households with children under the age of 18. To create the final ranking, we subtracted the number of families leaving a metro area from the number of those moving in.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Barbara Balfour
Barbara Balfour |

Barbara Balfour is a writer at MagnifyMoney. You can email Barbara here

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These States Spend the Most on Weddings

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

wedding cost study
iStock

Weddings are notoriously expensive. Combine that bill with the costs of other aspects of adulthood — student loans, a mortgage, child rearing — it’s no surprise that the average age of first marriage is on the rise for both men and women (27.8 years for women and 29.8 for men in 2018), as reported by the U.S. Census Bureau. While many factors affect the cost of a wedding, where you live is a major one. Due to differences in costs of living and local incomes, the average wedding price tag is significantly higher in some states than it is in others.

Below, we analyze wedding cost data, marriage length data, household income data and divorce rates to find the states spending the most on their weddings. Read on to find out how your state fares when it comes to celebrating nuptials.

Key findings

  • New York couples spend the most on weddings. The average wedding in the Empire State costs about $34,300 or just under 53% of the state’s average income.
  • Vermont takes second when it comes to wedding spending. The average couple there can expect their wedding to cost over 52% of one year’s income.
  • Pennsylvania takes third, with our data showing the average couple spending just over $28,800 on their wedding. That’s over 48% of the statewide household income.
  • Regionally, the northeast spends the most on weddings. In addition to New York, Vermont, Pennsylvania, Rhode Island, Connecticut, Maine, Massachusetts and New Jersey are all in the top 10. New Hampshire falls just short of the top 10, coming in at 11.
  • Southern states spend the least proportionally on weddings. Four of the bottom five states that spend the least on weddings relative to income are in the south. Kentucky, Alabama, Tennessee and Mississippi all spend between 35% and 36% of household income on weddings on average. While these states tend to rank near the bottom in terms of income, according to data from the U.S. Census Bureau, they also spend much less on weddings. Those four states spend an average of $17,100 on weddings. The top four states spend nearly double that amount.
  • Weddings in Hawaii are the most expensive at nearly $38,000 on average, followed by New Jersey at $37,000 and Washington D.C. at $36,000. Though due to income differences, the relative cost of those weddings varied.

Which states spend more for weddings

The Northeast clearly leads in this category, with a few states on the west coast also ranking high. In general, the southern states tend to spend the least amount on weddings proportionately to their incomes.

When it comes to wedding spending, it’s New Yorkers who spend the most in proportion to their income. The average cost of a wedding in NY is $34,315, while the average median household income is $64,894 — meaning an average of 52.9% of a couple’s annual income is spent on their wedding.

While the cost of weddings themselves is most expensive in Hawaii — an average of $37,827 per wedding is spent — the Aloha State comes in at No. 4 when it comes to the proportion of their income they spend (48.6%). Vermont, Pennsylvania and Rhode Island round out the top five in wedding spending relative to income.

Average wedding costs by age

It’s not only where a couple lives that tends to affect the price of their wedding but also the age at which they get married that shows a strong correlation. The following graphic shows how much on average people spend on first-marriage weddings by age. As you can see, in general, the older people are, the more they tend to spend on weddings.

For example, in a state like Idaho where the median age of marriage is 26.7, the average wedding cost is $19,925, whereas in Massachusetts, with a median marriage age of 31.2, the average wedding cost rings in at $35,966.

Median age and duration of marriage by state

Another interesting factor to consider when putting a type of cost “value” on marriage is to look at how long marriages last and how one’s age affects that.

The following chart shows how the median age of each state’s residents compares to the average length of their marriage. For example, in Washington, D.C., the median age of residents is relatively young (34) and the average length of marriage is estimated to be 10.6 years, whereas in Maine the median age is 44.6, with the average length of marriage coming in at 22.6 years.

It’s important to note, however, that the Census Bureau collects this data by asking people how long their current marriage has lasted. This means the data only tracks currently successful marriages and doesn’t entirely factor in divorces, and people who were married, divorced and then remarried would then lower the average length of the marriage.

Annual cost of a marriage by state

Much like a down payment on a home, weddings often come with expensive upfront costs, but those costs serve as an investment in something that can potentially carry long-term value — your marriage. While determining that value on emotional level will be unique to every couple, it’s fascinating to look at just how that upfront investment fares in financial sense over the years.

The following map shows which states get the biggest bang for their buck, so to speak, when it comes to money spent on their weddings. For each state, it shows how much on average a couple would pay annually if they spread out the cost of their wedding over the life of their marriage. Those states with the lightest shades pony up the least amount, and those with darker shades pay more.

The best “value” is in Michigan, where the cost of a wedding is an average of 1.8% of a couple’s income over the course of their marriage.

On the other end of the spectrum is Washington, D.C. (not shown on map), which has the most expensive marriages. The average current marriage in D.C. is chugging along at roughly 11 years strong, meaning the average price of a wedding there — $36,082 — spread out over the life of the marriage costs about $3,400 per year or roughly 4.1% of a couple’s annual income.

Should you take out a personal loan for your wedding?

Ideally, you should avoid taking out debt for your wedding. There are countless ways to save when it comes to weddings, such as skipping a wedding planner for a do-it-yourself event and making economical food and beverage choices.

Unfortunately, many couples find themselves cash-strapped and unable to fully fund their wedding. In these cases, a personal loan may be helpful for minimizing the cost of borrowing, assuming you have strong credit.

While the terms of a personal loan will depend largely on your financial situation, they may offer a lower-interest way to pay for your big day than, say, a credit card. Borrowers with less-than-perfect credit, though, may find they don’t qualify for good rates, if at all. In these cases, you may consider borrowing from friends or considering a secured loan, which requires collateral but may offer lower rates.

If you decide to finance part of the wedding, make sure you know exactly how much the loan will cost over the life of the loan and have a plan to pay it off in a timely manner to avoid racking up interest charges. As much as you want your marriage to last for many years to come, the opposite should be the case with interest charges.

Methodology

In order to rank the states that spend the most on weddings, we looked at data on three factors for all 50 states plus Washington D.C. Specifically, we looked at the following three metrics:

  • Cost of wedding. Data comes from theweddingreport.com and is for 2018.
  • Median household income. Data comes from the U.S. Census Bureau and is for 2017.
  • Median marriage length. Data comes from the U.S. Census Bureau and is for 2017.

To create the final rankings, we divided wedding costs by median household income. This gave us wedding costs as a percent of household income. We also amortized the cost of a wedding over the marriage length and then divided by household income to create another ranking.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Julie Ryan Evans
Julie Ryan Evans |

Julie Ryan Evans is a writer at MagnifyMoney. You can email Julie here

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