Self Financial is a credit-building platform working to improve economic inclusion and financial resilience through its products. Those products primarily include the Self Credit Builder Loan and the Self Visa® Credit Card.
One of the main draws of the Credit Builder Loan is that it’s available in all 50 states, unlike some other credit builder loans. It doesn’t require an upfront deposit, and there’s no credit check, showing Self’s commitment to increasing economic inclusion.
This guide will help you determine whether it’s the right choice for you.
Self’s credit builder loan at a glance
- What we like: No security deposit or credit check; pairs with a secured credit card
- Rates (APR): From 15.88%
- Dollar amount of payments: $25 – $150
- Repayment terms: 24 months
- Fees: $9 administration fee, up to 5% late payment fee,
- State availability: All 50 U.S. states
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How Self credit builder loan works
To get started with the Credit Builder Loan, enter your email address and fill out the online form. You’ll also have to pay the non-refundable $9 administration fee. No credit check is required to apply.
Several plans are available, with monthly payments between $25 and $150. A month after signing up and paying the fee, you’ll begin making monthly payments to your account.
Unlike some credit builder accounts, you don’t have access to your money immediately. Instead, it’s deposited into a certificate of deposit (CD). At the end of the 24-month term, your money is released, and you will have access to it. The amount you get back varies based on your monthly payments and interest costs.
The administration fee for all of Self’s plans is the same, but the plans otherwise have completely different terms. Payment amounts vary, as does the total cost and the amount you get back.
How Self helps build credit
Self helps build credit by reporting your payment history to the three major credit bureaus—Experian, TransUnion, and Equifax. Payments are reported monthly. By making on-time payments, you can slowly build your credit.
Creditors are typically more willing to lend to consumers who are more likely to pay on time. This is why payment history is one of the most important credit score factors—it accounts for up to 35% of your credit score. With monthly reports, on-time payments can help you raise your credit score.
Self doesn’t specify how much its loans can help improve your credit. However, it does mention relevant statistics. For instance, a CFPB report found that credit builder loans helped participants increase their credit scores by 60 points more than participants without existing debt.
The best way to improve your credit while you have a Credit Builder Loan is to make your payments on time every month. Because you can’t borrow against your balance, other credit factors like credit utilization don’t apply at this stage.
Monthly payments on the Credit Builder Loan range from $25 per month to $150 per month. Over the entire 24-month term, total payment amounts range from $600 to $3,600.
Pros and cons of a Self credit builder loan
Pros
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No credit check or upfront security deposit required
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Easy qualification
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Available in all 50 states
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Payments reported to three major credit bureaus
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Ability to choose your payment amount
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Comes with free credit monitoring
Cons
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All plans require a non-refundable administration fee
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Can’t access your money until the end of the term
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Late payments are also reported to credit bureaus, which could damage your credit
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APR is somewhat high compared to some credit-builder accounts
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You may not be able to keep the interest earned on your CD
Self eligibility requirements and application process
One of the benefits of the Credit Builder Loan is that qualification is relatively easy. Just choose your plan and pay the administration fee, then complete a form online.
There are only a few basic requirements to apply:
- You must be a U.S. citizen, permanent resident, or non-resident alien
- You must be at least 18 years old
- You must have a Social Security number
- You must have a valid bank account
Self doesn’t specify income requirements, and there is no hard credit inquiry. However, you may see a soft credit inquiry at no cost. This is to verify your identity and for credit monitoring purposes.
Alternatives to Self credit builder loan
While the Self Credit Builder Loan has its advantages, it may not be the best choice for everyone. Consider these alternatives if you need other ways to boost your credit:
Secured credit cards
With a secured credit card, you typically make an upfront security deposit, usually equal to your credit limit. One example is the Self Visa Credit Card, but many secured credit cards are available.
When you use a secured credit card, your available credit decreases until you pay. These payments are usually reported to credit bureaus, so paying on time can help you raise your credit score.
The downside of this approach is that you must put down a security deposit, but it can be the right choice if you have some extra cash.
Other credit-builder loans
Self’s Credit Builder Loan is a popular choice among credit-builder products, but it isn’t the only one available today. The market for these loans is becoming increasingly competitive as more people seek access to credit.
For example, some of Self’s competitors offer credit-builder loans with no fees, longer repayment terms, and larger loan amounts. As is often the case when considering financial products, it pays to shop around.
Student credit cards
If you are a student, you may be able to qualify for a student credit card. These credit cards often have lower limits credit cards along with fewer benefits.
Remember that student credit cards may have higher interest rates than other credit cards. However, qualifying may be easier, and they may have certain student-specific perks. This can make them a good way for students to start building credit.
Secured personal loans
Similar to secured credit cards, a secured personal loan requires collateral. However, secured personal loans are often backed by personal assets, such as a house or a car. Because these loans are secured, they can have easier qualification, and on-time payments can improve your credit score.
The catch is that your property could be at risk if you fail to make timely payments. This makes them riskier lending that you should only pursue if you know you can make the payments.