Capital Good Fund loan review: Small loans from a nonprofit lender

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In a Nutshell

Capital Good Fund is a nonprofit organization offering small loans and financial coaching to low-income families and others facing credit challenges in six states. If eligible, applicants with less-than-perfect credit can apply for loans to cover emergencies, apartment security deposits, unexpected bills and more.

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Pros Cons
A variety of loans and financial coaching Must be a resident of Delaware, Florida, Illinois, Massachusetts, Rhode Island or Texas
Low interest rates for short-term loans Limited loan amounts available
No additional fees for emergency loans or personal loans Must explain how you’ll be using the loan

What you need to know about Capital Good Fund personal loans

Capital Good Fund is a nonprofit organization offering a variety of loan options — including emergency loans, immigration loans and personal loans — to residents of Delaware, Florida, Illinois, Massachusetts, Rhode Island and Texas.

If you’re looking to make your home more energy-efficient and live in Illinois, Massachusetts or Rhode Island, you can apply for a home weatherization loan, offered in partnership with local utility company National Grid.

The loan process with Capital Good Fund can take about a week.

Multiple loan options

Each Capital Good Fund loan offers a different loan term and loan availability may depend on the state you’re in. But here’s the breakdown of what may be available.

  • Emergency loans ($300 to $1,500) — 15-month loan, which is unique in the industry
  • Personal loans ($700 to $2,000) — Two-year loan
  • Immigration loans ($700 to $20,000) — Two- to four-year loan
  • Weatherization loans ($500 to $25,000) — Two- to seven-year loan

Low rates for small short-term loans

The short-term Capital Good Fund emergency loan costs a fraction of what a short-term payday loan or car title loan costs. The annual percentage rate on a Capital Good Fund emergency loan is currently 5%. In comparison, payday loans and cash advances often charge what equates to APRs in the triple-digits.

If you need to borrow closer to $2,000, you may want to apply for the nonprofit’s personal loan instead. The personal loan product also has an interest rate that’s competitive and in line with what’s offered by other online lenders.

No closing costs and no collateral required

Emergency loans, personal loans and immigration loans don’t carry closing fees and you’re not required to make a loan down payment. Additionally, since Capital Good Fund personal loans are unsecured, you won’t have to put up collateral for your loan. Though for the nonprofit’s weatherization loans, you have to be a homeowner and your mortgage has to be current.

Must explain the purpose of the loan at application

One of the conditions for borrowing money from Capital Good Fund is that you need to explain and show proof of how you’re going to use the funds. For example, if you’re applying for a personal loan to cover a security deposit, you may need to show an apartment listing. If you’re borrowing money to cover immigration expenses, you’ll need documentation that proves you’re eligible for this type of expense, such as the judge’s immigration order.

Less-than-stellar credit may be accepted

Even if your credit history is rough, you may still be able to qualify for a Capital Good Fund loan. While the nonprofit requires a review of your credit profile, which may result in a hard credit inquiry, it also considers your income, character and overall finances to make a decision. There’s a preliminary prequalification form you can complete on the website to see if you’re eligible. And while prequalification doesn’t trigger a hard credit inquiry, you should also take note that it doesn’t guarantee final approval either. Take note that once you submit your completed application, Capital Good Fund will do a hard credit check.

A closer look at a Capital Good Fund loans

The nonprofit serves people who may have trouble qualifying for banking products and aims to keep consumers away from expensive payday loans. Here are a few details you should know about Capital Good Fund personal loans.

  • Loans can be used to cover everyday expenses — You can use Capital Good Fund loans to pay for utilities, security deposits and other bills.
  • No prepayment penalty — There’s no fee if you pay off the loan early, according to a Capital Good Fund representative.
  • Auto loans are offered in certain states — In addition to personal loans, emergency loans, immigration loans and weatherization loans, Capital Good Fund offers auto loans and auto loan refinancing in Florida, Rhode Island and Massachusetts.
  • Financial coaching is available — To help families accomplish financial goals like saving money, repaying debt and building credit, the nonprofit offers several coaching programs, including one year of coaching for $180, payable monthly at $15 per month.
  • There’s a credit-builder program — The credit-builder program is not a credit-builder loan. Joining the credit-builder program costs $60 per year, and you don’t get the money back. Instead, you make $5 monthly installment payments toward the program and each payment is reported to the three credit bureaus as a 0% loan.

Who is a Capital Good Fund loan good for?

Capital Good Fund loans are best suited for residents of Delaware, Florida, Illinois, Massachusetts, Rhode Island or Texas who need to fill a small financial gap of up to $2,000.

Perhaps you need an extra $300 to put a security deposit down on a new apartment, or you need $800 to repair the breaks in your car. Instead of turning to an expensive payday loan, you can apply for the Capital Good Fund emergency loan or personal loan product. The extended loan payback terms coupled with relatively low interest rates may make this loan option more appealing than other emergency financing.

The major drawback here is that the amount you can borrow is limited — only $300 to $2,000. If you need to borrow more money for a major purchase or borrow for debt consolidation, you’ll need to look at other lenders offering higher loan amounts.

How to apply with Capital Good Fund

Capital Good Fund offers a prequalification process that may help you assess whether you’re eligible for a loan. The prequalification form asks if you’ve had any adverse banking or credit history. It also asks for your monthly income and monthly rent or mortgage payment. Keep in mind that even if you prequalify, you may not actually be approved for the loan after formally applying.

To complete the full application for a Capital Good Fund loan, here’s what you’ll need.

  • A copy of a government-issued ID
  • A steady source of income
  • A bank account or prepaid card account
  • Two to three months’ worth of bank or prepaid card statements
  • A voided check or prepaid card
  • Proof of loan purpose

Not sure if Capital Good Fund is right for you? Consider these alternatives.

  • OppLoans: If you need to borrow a bit more money and are prepared to pay much higher borrowing costs, OppLoans offers loans of up to $4,000 to those with less-than-perfect credit (and in more states).
  • Upstart: Upstart is a peer-to-peer lender that offers loans ranging from $1,000 to $50,000 to people who have a minimum credit score of 620, at rates that can compare to a credit card APR. (Though you may see different terms on Credit Karma.)

About the author: Taylor Medine is an indie author and professional writer who covers personal finance topics for various media outlets. Her work has been featured on websites such as FinanceBuzz, Lending… Read more.