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Initial Fee | $15 |
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Monthly Fee | $25 |
BBB Rating | A |
Customer Support | Phone, Email, Online Chat |
Cancel Anytime | Yes |
Credit builder accounts — also called savings-secured installment loans — are secured by virtue of how they’re set up. The entire value of the loan is in a certificate of deposit (CD), which can be taken by the lender if you default.
Through Self Lender - Credit Builder Account you can take a loan out for $525, $545, $1,000 or $1,700 from one of Self Lender’s banking partners. The funds from the loan are then held in a CD that earns 0.10% APY for 12 months.
What’s probably best about this loan is that you don’t have to meet a minimum credit score requirement. The loan being completely secured greatly reduces any risk to the lender, thus relieving some of the requirements other providers or loan types carry.
A Self Lender - Credit Builder Account isn’t a loan in the typical sense. Usually when you take out a loan you get the funds, spend them and then repay the loan.
With Self Lender - Credit Builder Account you take out a loan with a banking partner and your funds are held in an FDIC-insured CD for 12 or 24 months, depending on the account value you choose. You make 12 or 24 equal payments over the course of your repayment term, and the partner reports your payment history to the three major credit bureaus each month. Once you’ve paid off the loan, the funds in your CD will have matured — with earned interest.
When you use a credit builder account, you can establish a payment history. Keeping up on your payments and making them in full can help bolster your credit score.
It’s free to join Self Lender. When you establish your credit builder account, the following rates and fees will apply:
If you miss a payment by more than 15 days, you’ll be charged a late fee of 5% of the monthly payment due.
One key difference is the requirement of an upfront deposit. Secured credit cards require you to provide cash upfront to secure the credit limit on the card. Meanwhile, Self Lender does not require that.
Self Lender - Credit Builder Account | Secured credit card | |
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Upfront deposit requirement | None | Total amount of credit limit, usually $200 to $500 |
Access to funds | No access until after 12 or 24 month of payments, depending on your account’s value | Ongoing access to credit limit |
Credit reporting | Reports to the three major credit bureaus as an installment loan | Reports to the three major bureaus as a revolving line of credit |
Cost | APR of 12.03% to 15.98% (varies by product) | APRs start at 9.99% but can be as high as 24.99% |
Your interest rate is the simple interest you’re paid on an account or an investment over the period of a year. For example, if you’ve invested $1,000 into an account that comes with 1% interest, you’ll have earned $10 on that investment at the end of a year.
The annual percentage yield is a bit trickier. An APY is an effective annual rate of return that takes into account the effect of compounding interest over a year. In short, it’s the interest rate compounded monthly over the course of a year. Learn more about savings accounts.
CD-secured installment loans like Self Lender - Credit Builder Account can help build your credit score as they advertise, but they affect more than one part of your score. The amount that you save with the CD is also less than what you’re paying in interest on the loan, so it’ll cost you in the end.
Here are a few things to keep in mind before applying for an account:
If you’re ready to start building your credit and saving with Self Lender - Credit Builder Account, you’ll need to:
Yes. Applying for a Self Lender - Credit Builder Account is safe.
Self Lender uses multiple encryption levels to secure your information, including 256-bit Secure Sockets Layer. On top of the encryption, Self Lender regularly tests and scans its security systems to prevent hacking.
As far as accreditations, Self Lender is an FDIC member and is accredited with the Better Business Bureau, which gives it an A rating.
Now that you’ve checked your eligibility, there are just a few steps to apply:
1. Visit Self Lender’s website. 2. Click Get started.
3. Select I want to build credit and savings. 4. Enter your contact information to create an account.
5. Complete the required form.
6. Submit your application.
The entire process usually doesn’t take more than five minutes.
You’re on the way to better financial health, and that’s a big deal. You can log in to your Self Lender - Credit Builder Account to make one-time payments at any point. If you miss a payment by more than 15 days, the late fee is 5% of the monthly installment. You could set up automatic payments: If you’re sure you can have the payment amount in your bank account every month on the same day, autopay can save you from missing a payment.
Building and rebuilding credit can be a strenuous experience. Self Lender - Credit Builder Account may be able to ease some of that with a simple system and straightforward repayments.
Credit builder loans aren’t the only way of building credit though. Compare other options for improving your credit score to find what will best fit your needs.