Capital Good Fund Loans: 2021 Review

Capital Good Fund is an online, nonprofit lender that makes installment loans to borrowers with low income and no credit history or bad credit. Common uses of Capital Good Fund loans include car repairs, security deposits, refinancing high-interest debt and catching up on rent or utility bills.

With rates capped at 15.99%, Capital Good Fund personal loans are cheaper than payday and other high-interest loans but can still be expensive. If you’re borrowing for short-term or emergency expenses, NerdWallet recommends also exploring alternatives.

Capital Good Fund lends to consumers in seven states: Colorado, Delaware, Florida, Illinois, Massachusetts, Rhode Island and Texas.

The company can offer low rates to consumers because it partly operates on donations and grants, says CEO Andy Posner.

Capital Good Fund loan types

Capital Good Fund offers several loan types, depending on what you need the funds for. Rates, terms and availability vary by state.

Crisis Relief loans

These loans can be used to cover utility bills, rent, medical bills and groceries when you’re in financial distress. Unlike the other loans, these loans start with a 90-day deferred payment period, so you don’t have to make a payment in the first three months after you get a loan.

Special requirements: Borrowers need to show proof that they need the Crisis Relief loan. That can be a note from a mechanic, a copy of the bill you need to pay or an apartment listing, according to the company’s website.

» MORE: Compare emergency loans for bad credit

Impact loans

Like Crisis Relief loans, Impact loans can be used for meeting your basic needs like paying rent or covering a surprise expense, such as medical bills or car repairs.

Immigration loans

These loans can pay for immigration-related expenses, such as obtaining citizenship and securing or renewing a green card. Capital Good Fund has staffers who are fluent in English and Spanish, Posner says.

Special requirements: Borrowers need a referral from a community agency or immigration attorney proving they’re eligible for immigration to get this loan.

Weatherization loans

The lender offers weatherization loans to help homeowners make their houses more energy-efficient.

Special requirements: Borrowers need a state-issued HEAT Loan Authorization Form in order to apply for the loan with Capital Good Fund.

How to qualify for a Capital Good Fund loan

To qualify for a Capital Good Fund loan, you usually need a bank account or prepaid debit card with two or more months of statements and income that can be verified with pay stubs or deposits into a bank account. You also must live in one of the states where Capital Good Fund operates.

Those qualifications are in addition to any special requirements for the type of loan you’re getting.

Banking history is the most important factor considered for approval, Posner says. The company looks at the average daily balance in your bank account and whether you’ve had any overdrafts. This information shows not only if a borrower has enough income to repay the loan, but also whether they keep enough money in their account every month to do so.

You don’t need a credit score or credit history to get a loan, but any credit you have will be considered.

Capital Good Fund loan features

Loan flexibility: Borrowers who run into payment trouble may qualify for deferred payments or interest-only payments, as long as they remain in contact with the lender.

Other programs: Capital Good Fund offers a credit-builder program, in which you pay $5 per month for 12 months and the lender reports the payments to all three credit bureaus. It also offers two financial coaching programs at $5 or $15 per month for 12 months.

» MORE: Get your free credit score

Capital Good Fund loan example

Here’s what you can expect to pay for one of its loans:

• Crisis Relief loan: A $400 loan at 5% APR repaid over 12 months carries monthly payments of $34 and would cost $11 in total interest and fees.

• Immigration loan: A $5,000 loan at 15.99% APR repaid over 36 months would cost $176 per month and carry $1,327 in total interest and fees.

• Impact loan: A $1,000 loan with a 12% APR repaid over 15 months would have monthly payments of $72 and would cost $82 in total interest and fees.

» MORE: Calculate estimated costs of a personal loan

How Capital Good Fund compares

Capital Good Fund has lower rates and smaller borrowing amounts than other payday loan alternatives, though lenders like Oportun and OppLoans are more widely available.

Oportun: Offers personal loans up to $10,000 with APRs up to 36%. Oportun allows borrowers to choose their payment date or add a co-signer.

OppLoans: Offers installment loans up to $4,000 with APRs reaching triple digits. OppLoans lets you change your payment date.

Capital Good Fund isn't a good idea if:

• You need to consolidate debt: Capital Good Fund’s personal loan can’t be used for debt consolidation or refinancing. If you’re looking to consolidate high-interest debt, consider other options.

• You have cheaper options: If you can’t pay your bills, ask for extra time from your creditors, get local assistance or find cash elsewhere.

Here are some alternatives that may be cheaper than borrowing.

For help meeting basic needs: Seek assistance from local nonprofits, charities and religious organizations. They can help you get food, clothing and access to transportation for job interviews.

For help with rent or utilities: Contact your utility company, landlord or mortgage issuer for help deferring a payment. If you need long-term help, consider seeking other housing or contact a housing counselor.

To pay medical bills: Learn about ways to cover medical costs, including payment plans.

To cover other one-time emergency expenses: 

• Ask a friend or family member for a loan, or form a lending circle to borrow from those you trust without accruing interest.

• Ask your employer for a paycheck advance or use a loan app to borrow against your next paycheck.

• Get a payday alternative loan or a small personal loan from a credit union. You have to be a member to use this option, but it’s one of the most affordable ways to pay for an emergency.

• Try other ways to make money. You need some extra time to make this option work.

If you take a Capital Good Fund loan

After considering alternatives, you may decide that taking a Capital Good Fund loan is your best option. In that case, do what you can to carve out room in your budget to repay the loan as quickly as possible and to build your emergency savings. For many people, borrowing for emergencies can be an expensive solution.