Payday Loan Alternatives: Houston, Texas
At Fig, we're committed to providing affordable financial products that help American families meet their current needs and secure their financial future. Sometimes, this takes the shape of a Fig Loan, which can help you navigate unexpected expenses while also strengthening your credit history. At other times, however, we recognize that even a Fig Loan may not be the right choice
Fig is proud to work with a number of nonprofits in Houston, the city where we got our start. In this post, we'll share some alternatives for those of you in the Houston area looking for auto loans, bad credit loans, and other forms of financial assistance. Many of these options come from partner nonprofits, most notably through our collaboration with the United Way of Greater Houston's THRIVE, a collaborative of businesses, nonprofits, community colleges, and city and state agencies all devoted to financial stability for families in the greater Houston area.
Texas was built for cars, but did you know that auto loan-related debt is one of the biggest categories of debt for middle-class Americans? According to the Wall Street Journal, car dealers "now make more money on the loans their customers take than on the cars they sell." For those of us with bad credit, the options are even more limited. Here are 2 ideas:
- United Way THRIVE partner On the Road Lending offers auto loans and auto loan refinances to people in Houston, provided your monthly take-home income is at least $1,500. You will need to work with one of their coaches to obtain the loan, and the meeting is set after you submit an application via their website.
- Houston Metropolitan Federal Credit Union (HMFCU, formerly PCU) offers auto loans to its members, some with interest rates as low as 3.99% APR. In order to apply, you'll need to be a member of the credit union. It is unclear if membership is open to anyone in the Houston area, or if you need to be affiliated with their sponsor companies. The best way to find out is to visit a location near you!
- Although not an auto loan, emergency transportation assistance is available through certain nonprofits. For example, our partner MAM offers assistance in the form of gasoline vouchers, Metro-money, or even a bicycle. To apply for this type of assistance, you will need to contact MAM at the phone number listed on their website and make an appointment. Other nonprofits in your area may offer this type of assistance well, so it always helps to ask!
Bad Credit Loans
As you may know, we really don't recommend payday loans and believe there is almost always a viable alternative. If you need a loan for an unspecified reason and have bad credit, here are some options:
- HMFCU offers personal loans at no more than 18.00% APR for people with no, little, or bad credit through their Second Chance Loans. Once again, you would need to be a member of the credit union in order to apply.
- You can also gain access to low-interest Fig loans for bad credit when you work through one of our partners in the Fig36 program. Through Fig36, we empower our partners, like MAM, to offer loans to members of their communities using Fig's technology and service team. To apply, you will need to be a current client of MAM or another one of our partners.
Credit Builder Loans
Sometimes, you may turn to an online loan for bad credit to improve your credit, even though you don't need immediate cash. For those of you looking to build credit, which will help you avoid payday lenders in the future, we recommend a credit builder loan. Credit builder loans cost much less, in terms of interest and fees, than traditional loans, but they are specifically designed for people who do not need cash right away. Take a look at the following credit builders:
- Another United Way THRIVE partner, the Local Initiatives Support Corporation (LISC) offers an amazing credit builder called the LISC Twin Accounts. It can not only build your credit up to 40 points but also matches each payment so you get double the amount you saved at the end!
Participants are issued a 12-month, $300 loan at 9% APR. The $300 is held in a “locked” savings account, each payment is matched and the original $300 + $300 match is released to participants after completion of all loan payments!
To apply, you’ll need sufficient monthly income to cover the loan payment and have few (or no) active lines of credit, and be a LISC client.
- In Texas, we offer the Fig Credit Builder. To apply, you just need to live in Texas, and submit your application online. Amounts range from $500-$1000 at an interest rate of less than 4% APR. This is a great option if you are already used to socking away a little bit of money in a savings account each month, but don't have a credit history.
Checking and Savings Accounts
I'm not proud to say that I have wasted money on banking fees. There are, however, great low-cost bank accounts available through our partners.
- Bank On Houston has a great program to help you get a customer friendly checking or savings account! If you sign up with Bank On Houston, their Spanish-speaking staff will set you up with resources such as free debit/ATM, online banking, mobile banking, wire transfers with financial institutions that are FDIC (Federal Deposit Insurance Corporation) insured. The best part is your account could qualify for $0 monthly service charges! Through its collaborative partnership, Bank On Houston can also help you set up a "Second Chance" bank account. This is a great opportunity if you are looking to rebuild your bank account history! To apply, you’ll need to be a resident of the Greater Houston area and some form of U.S. OR non U.S. identification.
Matched Savings Accounts
We encourage you to check out Individual Development Accounts (IDAs), which are special savings accounts for lower-income individuals or families (earn less than 2x the Federal Poverty Income Level). In an IDA, a nonprofit (usually) will match however much money you contribute to the account, most often at a one-to-one rate but sometimes more! Here are some Houston area nonprofits that offer IDAs:
- Covenant Community Capital, another THRIVE partner, offers an IDA if you are saving for a home or for education-related expenses. They offer a 1-1 match for any money you save with the IDA. To find out more and apply, you will need to contact the point-person listed on the website.
- The Alliance for Multicultural Community Services also offers IDAs for education, emergency savings, and down payment for a car. Application requirements vary according to which IDA you wish to participate in, however, you must be a member of the Alliance's Financial Opportunity Center.
We hope that the loan alternatives above give an idea of the amount and variety of nonprofit options available. If you need help and are thinking about taking out a loan, but you want to know if there are any nonprofit resources to address your current situation, the United Way of Greater Houston is a great place to start. If you'd rather talk to us, we're available at email@example.com, Facebook, Instagram, and Twitter.
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