Grace Enfield, Content Writer
To get a credit-builder loan, first compare offers from the few companies that have credit-builder loans, then apply for the best one online. Once you're approved, you'll need to make monthly payments to the lender until the end of the loan term. Credit-builder loans don't require a certain credit score for approval, but you will need enough income to make monthly payments.
How Can You Get a Credit-Builder Loan
Find lenders that offer credit-builder loans.
Not all lenders offer credit-builder loans. The most popular lenders do not, but some smaller banks and credit unions do.
Compare loan offers and choose one that's best for you.
You'll need to compare loan offers based on important factors like APRs and loan lengths. There are also a few special features to look out for. Some lenders offer a partial interest refund, which means the lender may return some of the interest you pay on the loan in the end.
The lender could also put your money into an interest-bearing account. This way, you may receive some interest on the money in the savings account over the course of the loan.
Apply for the loan.
You can apply for a credit-builder loan online, by phone or in person. Not all options may be available with all lenders, though.
Make monthly payments until you can get the money.
Once you're approved, you'll need to make monthly payments to the lender until the loan term ends. This could take anywhere from 12 to 24 months, and the lender will report your payments to the credit bureaus each month. After you make all of your monthly payments, you'll get the money from the savings account.
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