Best Credit-Builder Loans Compared
|Lender||APRs||Loan Amounts||Payoff Periods|
|Republic Bank||5.3% - 8%||$500 - $1,500||12, 18 or 24 months|
|AllTru Credit Union||around 12%||$300 - $1,000||12 months|
|Sunrise Banks||15%-21%||$600 - $900||12 - 18 months|
|Self||around 15%||$520 - $1,663||12 - 24 months|
|MoneyLion||5.99% - 29.99%||up to $1,000||12 months|
|Digital Federal Credit Union||up to 5%||$500 - $3,000||12 - 24 months|
Tips for Getting a Credit-Builder Loan
Compare several choices
Credit-builder loans can vary pretty widely in terms of cost, so it’s best to go for one that has a low APR. If the lender also puts the money in an interest-bearing account, or gives back some of the interest you pay on the loan, that’s even better.
Be diligent about payments
The whole point of a credit-builder loan is to build a positive credit standing or improve your current credit score. The only way you will accomplish that is by making all of your monthly payments on time. Having any late payments can completely defeat the purpose of the loan.
While WalletHub has collected some of the best options for you to consider, your local banks and credit unions may have worthwhile offers as well. You should visit them or give them a call to find out the terms of their loans, and then compare those terms to popular offers before deciding which to apply for.
Consider credit cards
Credit-builder loans aren’t the only way for people to build or rebuild their credit. There are plenty of credit cards available to people with no credit or bad credit, and they report account information to the major credit bureaus monthly. As long as your account is in good standing each month, the credit card will help improve your credit.
Plus, with a credit card, you’ll continue to build credit as long as the account remains open. With a credit-builder loan, you’ll only build credit for a limited number of months.
To identify the best credit-builder loans, WalletHub’s editors looked at offers from some of the most popular lenders on the market. We compared these lenders based on six overall categories: APRs, loan sizes, fees, loan requirements, transparency and the application process. We also considered special features that the loans might have, like interest-bearing accounts, along with whether the loans are open to all consumers.