The best credit unions for credit-builder loans are Alltru Credit Union and Digital Federal Credit Union because of their low APRs and affordable monthly payments. Alltru offers 50% of all the interest paid on the loan back, while an account through Digital Federal earns dividends. You must be a member to get a credit-builder loan from either of these credit unions, though.
Best Credit Unions for Credit-Builder Loans
Alltru Credit Union
Alltru offers 12-month credit-builder loans of $300 to $1,000 with an APR of 12%. If you make all of your payments on time, the company will refund you half of the interest you paid over the life of the loan.
To get a credit builder loan through Alltru, you must become a member. Memberships are open to people who live in St. Louis, St. Louis County or St. Charles County.
Digital Federal Credit Union
Digital Federal offers 12 to 24-month credit-builder loans of $500 to $3,000 with a fixed APR of 5%. With a credit-builder loan from Digital Federal, the money in your savings account will earn dividends.
Anyone can apply online to become a member of the credit union.
Randolph-Brooks Federal Credit Union (RBFCU)
RBFCU offers credit-builder loans of $300 to $2,500 with loan terms from 6 to 36 months. There are no fees associated with an RBFCU credit-builder loan, but you will have to pay interest on the loan. You'll receive a portion of that interest back at the end of the loan.
You can apply online to become a member of RBFCU, but you must live in Texas to become a member.
If you're having a hard time getting approved for a credit-builder loan from a credit union, you can also try to get credit-builder loans from banks or online lenders. Plus, good alternatives to credit-builder loans include no credit check personal loans and credit cards for people with no credit. These borrowing options do not require a credit history, and they can help you build credit.