If you’re new to credit, or trying to rebuild your credit but struggling to gain access to the right tools, a credit builder loan might be just the ticket: NGETS.COM – SELF PROGRAM

What is a credit builder loan?

NGETS.COM and A credit builder loan is an installment loan that exists for the sole purpose of helping build a positive credit history

A credit builder loan is an installment loan that exists for the sole purpose of helping build positive credit history.

The main difference between credit builder loans and a more traditional loan (like a personal loan) is that you don’t get the money until you’ve finished making every loan payment.

By holding onto the loan funds as you make regular payments, the lender is able to reduce its potential loss should you prove unable to make your payments.

Here’s how it works:

1. You apply for and open a credit builder loan at a bank, credit union or through Self. A credit union may also call this type of loan a share secured loan (being secured by your savings account).
2. When your application is granted, the financial institution moves the loan proceeds you were approved for into a separate account, usually a savings account or certificate of deposit (CD). The loan amount tends to be between $300 and $1,000, though some banks offer credit builder loans as high as $2,500.
3. You then begin making your monthly payments for the predetermined amount of time (the loan term). The loan term can be as short as six months or as long as six years.
4. The bank, credit union, or service provider reports your monthly payment activity to one or more of the three major credit bureaus (Experian, Equifax, Transunion). A credit bureau generates a credit rating (also known as a credit score, based on your history of using credit).
5. Once the loan balance reaches zero, the service provider unlocks the CD or savings account and returns the total money the borrower paid, minus any interest and administrative fees.