a woman on a swing reading her ISA

The 5 things you need
to know about your ISA

TradeUp is different from traditional lenders. Instead of offering
loans, we offer a new type of financing called an Income Share
Agreement (or ISA). Let’s dive into what makes an ISA an ISA, and
answer some questions you might have about them!

Let's get started

1) Your ISA starts one month after you graduate and start making over $25,000 a year ($2,084 a month).

If your pre-tax income isn't above $25,000 a year ($2,084 in a month), your payments are $0.00 for that month. If you are making $25,000 a year or more, you are required to make regular ISA repayments. This means that you still have to pay even if you are employed in a different industry from the trade program you attended. Payments are due on the 1st of the month. Please Note that for some programs your salary floor may be lower than $25,000, please refer to your ISA details for more information.


2) Your ISA has a few important terms - length, income share, and repayment cap.

Let’s take a look at an example ISA, and understand its key terms. Note that your specific ISA terms will probably vary based on the specific program you’re attending.

$10,000 Funding

Funding: This is the amount your ISA is for, and your school will credit this amount towards your tuition.

48 Payments

Length: ISAs expire, unlike loans. If your ISA has a length of 48 payments, that means that after 48 monthly payments, the ISA is over.

8% Income Share

Income Share: An income share of 8.0% means that for those 48 months, you’ll make monthly payments equal to 8.0% of your pre-tax income.

1.5x Repayment Cap

Repayment Cap: This cap protects you by limiting payback. No matter how high your salary is, you’ll never pay back more than 1.5x the amount borrowed.


3) You must report any income changes to your ISA servicer while your ISA is active.

Once you graduate or leave your program, you’ll need to report any changes to your income, even if you don’t meet the minimum salary threshold of $25,000, to your ISA servicer Meratas within five days. When you file taxes, TradeUp will also take a look at your income and W-2. Lets look at some examples of when you need to report your income:

Any time you leave your job

If you leave your job, whether to start a new job or not, you’ll need to report it to Meratas within 5 days.

Anytime your salary increases

Anytime your hours increase, you get a raise, you get a bonus, or your salary increases in any way, you’ll need to report it to Meratas within 5 days.

Anytime your salary decreases

If your hours get cut back, you get a demotion, or your salary decreases in any way, you’ll need to report it to Meratas within 5 days.

Every 30 days if you are making under $25,000 a year

If you are unemployed, or employed and making less than $25,000 a year, Meratas will ask you to verify your income about every 30 days.


4) Your ISA will end when one of the following three things happens:

1

You’ve made the max number of monthly payments

Once you’ve made the number of payments outlined on your ISA (48 in the previous example), your ISA is complete!

2

You’ve paid back up to the repayment cap

If you pay back up to the repayment cap, your ISA is completed, even if you’ve only made a few monthly payments.

3

Your ISA times out after the maximum deferral amount

ISA payments can be deferred for a limited time if you’re looking for a job. When all of the deferral months and payment months expire, your ISA ends.


5) If you leave your program without finishing it, you might still be responsible for payments on your ISA.

Whether or not you need to make payments on your ISA depends on how far into the program you got before leaving. Lets take a look at the two important scenarios.

Leaving before two weeks: If you leave your program before two weeks (one week for CDL programs) have passed, you are not required to make payments on your ISA, and your ISA will be completely forgiven.

Leaving on or after two weeks: If you leave your program after longer than two weeks (one week for CDL programs), you will be responsible for making payments up to a 1x repayment cap of the money disbursed to the school on your behalf. Typically this is less than the total cost of the program.

if you drop out after more than two weeks you are responsible for ISA payments