You can’t actually borrow money with a credit-builder loan. When you get a credit-builder loan, the lender will put $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.
A credit-builder loan is $300 - $3,000, which you will need to repay over 6 to 24 months. You will have to pay interest on the loan amount at an annual rate of around 6% - 16%, along with a one-time fee to open the account in some cases. This fee could be around $10.
Yes, a credit-builder loan is a good idea because it’s an easy, low-risk way to establish or rebuild your credit history, especially if you don’t want to get a credit card for one reason or another. With a credit-builder loan, the lender will put money into a savings account for you and you’ll make payments to them over a set time. These payments will add up to the amount of money the lender put in the...
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