Grace Enfield, Content Writer
@grace_enfield
You get the money from a credit-builder loan after the loan term ends and you’ve made all the payments, plus interest. You will not be able to access any of the funds until the credit-builder loan is paid off, unlike with other loans. In other words, you’re not actually borrowing money with a credit-builder loan.
If you’re looking to get funds right away, you may want to consider getting a personal loan or a credit card. With these options, you’ll be able to borrow money within days of being approved. If a personal loan is right for you, you can estimate your potential rates by using the free pre-qualification tool on WalletHub.
People also ask
How does a credit-builder loan work?
A credit-builder loan works like a normal loan but in reverse. With a credit-builder loan, the lender puts money into a savings account for you, you make fixed monthly payments totaling the amount in the account plus interest, and then you get the money in the account once you make all the payments. You can see the full step-by-step process of how a credit-builder loan works below.
How a Credit-Builder Loan Works
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How much can I borrow with a credit-builder loan?
You can’t actually borrow money with a credit-builder loan. When you get a credit-builder loan, the lender will put from $300 to $3,000 into a savings account for you, and you then have to repay the amount plus interest before getting the money in the account at the end of the loan term.
To compare the top-ranked offers, check out WalletHub’s picks for the best credit-builder loans.
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