Loans

5 best credit building loans 2023

In this list you'll find the best credit building loans that will help you build credit while providing the funds you need.

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Looking for a loan that boosts your credit score? Here are the 5 best credit building loans in 2023

Some loans can help you build credit: know 5 options. Source: Canva.

Looking for the best credit-building loan? Starting your credit journey can be tough, especially if you have a bad, limited, or no credit history. But don’t worry. You’re not alone. 

Many people have been in your shoes and have managed to improve their credit over time.

One way to build your credit is by using credit products wisely. 

For instance, Installment loans for people with bad credit, secured credit cards, and credit lines specifically designed for building credit can all be helpful tools.

These products have a loan structure, which means you borrow a certain amount of money and then repay it over time. 

Further, by paying your bills on time and using credit responsibly, you can improve your credit report and score without incurring excessive costs.

So if you’re interested in using credit products to build or rebuild your credit, there are many options available to you. 

The credit products on this list are all designed to help you improve your credit score, and they’re widely available.

So without further ado, let’s dive right into the 5 best credit building loans in 2023, in no particular order.

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1. Self

Formerly “Self Lender”, Self offers credit-builder credit cards as well as traditional credit-builder loans.

The Self Credit Builder credit card is a flexible option that lets you choose which portion of your accumulated balance to use to secure the card. 

Further, you can draw against your credit limit as you need to make purchases online or in person, and it’s available as little as 3 months after your loan originates.

Self’s traditional credit-builder loans also have four loan plans tailored to different income levels and time horizons. 

Longer-term plans build credit for longer and may result in a higher ending credit score. The higher-priced plans offer larger payouts when the loan term expires.

Also, Self is unusually flexible and borrower-friendly. Their loan plans have a flat administrative fee of just $9, and no hard credit pull or credit score is required to apply. 

Additionally, they report to all three major credit bureaus, and you can cancel anytime before the end of the loan and get your payments back, less interest and fees — without damaging your credit.

2. SeedFi

Soon your credit score will be excellent if you put your mind to it. Source: Canva.

SeedFi is an ideal lender for those seeking low monthly payment options. Its payment plans start at $10 per month.

SeedFi’s Credit Builder Prime plan is unique. It’s technically free, and SeedFi doesn’t deduct interest or fees. 

However, you must contribute a minimum of $500, which can take over four years at the $10 monthly minimum to get your money back.

Additionally, for traditional credit-builder loans, SeedFi offers its Borrow & Grow plan. You get access to a portion of the loan right away and the remainder after you complete the payment plan.

Here are additional features:

  • Borrow up to $4,000 immediately with Borrow & Grow
  • Interest rates for Borrow & Grow start around 8%
  • Borrow & Grow payments start at $80 per month or $40 per week
  • Credit Builder Prime does not require a credit check

3. MoneyLion

MoneyLion is an all-in-one financial app that comes with a debit card and an everyday bank account. Because of this, it offers more versatility than the average credit-builder loan. 

Further, it offers interest-free cash advances up to $1,000 against your next paycheck. It also offers the ability to round up purchases to invest in bitcoin, and cash-back rewards on eligible purchases. 

You can also get your paycheck early with eligible direct deposit and auto-invest starting at just $5. Is it or not one of the best credit building loans you’ve heard about.

Additionally, MoneyLion’s credit-builder loan has a competitive interest rate and a 12-month term. Consequently, you pay less in interest over the life of the loan. 

For a $19.99 monthly membership fee, you can access immediate funds, additional cash advances up to $300 per pay period with no interest charges.

This also gives you access to robust credit monitoring tools, and personalized credit building tips and insights.

4. CreditStrong

These are the 5 best loans for building credit. Source: Canva.

This is a top credit-builder lender which everybody knows for high borrowing limits and flexible loan structures.

This lender offers three types of products:

  1. Revolv: Access a $1,000 revolving credit line for $99/year.
  2. Instal: Save $1,000 in 24-48 months with payments starting at $28/month.
  3. CS MAX: Save up to $25,000 with extended repayment terms based on loan size.

Additionally, CreditStrong comes with the following no minimum credit score requirements. This is excellent if you are trying to build credit.

The lender also runs no credit checks during the application process. And, as if it wasn’t enough, it offers early cancellation with principal refund, less interest and fees, with no impact on credit.

This loan also offers competitive interest rates and even options for business credit building. Hence why it made it to our list of the best credit building loans

5. Digital Federal Credit Union, or DCU

Digital Federal Credit Union, which you may also know as DCU, is one of the best credit building loans out there. 

It offers a credit-builder loan that is ideal for borrowers who are looking for low interest rates and competitive terms. 

With a fixed interest rate of just 5% APR, DCU stands out from other credit-builder loan providers.

Moreover, DCU offers borrowers a choice of 12- or 24-month terms, allowing them to choose the term that best fits their budget and repayment goals. 

Additionally, as borrowers make payments towards their loan, they earn dividends, or interest, on their savings balance, further strengthening their financial health.

If you’re looking to establish a new credit union relationship or build your credit without worrying about geography, DCU’s credit-builder loan is definitely worth a closer look. 

Depending on your needs, you can borrow anywhere from $500 to $3,000.

In conclusion

When considering a credit-building loan, look for options with low interest rates, flexible payment terms, and borrower-friendly policies. 

Also, be wary of loans with high fees or penalties for missed payments, and always make sure to read the fine print before signing on the dotted line. 

With the right credit-building loan and a commitment to responsible financial management, you can take control of your credit and achieve your financial goals.

Did your credit score drop? Learn the reason

Have you noticed a sudden drop in your credit score? There are many different reasons for this to happen.

If you’d like to improve your financial knowledge, read the following article about credit scores and possible reasons why they dropped.

sad man because credit score drop

Why did my credit score drop?

Read on and find out why your credit score might have dropped, and what you can do to bring it back to a better level.

About the author  /  Danilo Pereira

Danilo is a copywriter with a passion for learning. Deeply interested in philosophy, politics and arts.

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