If you have no credit history or have damaged credit, then a credit builder loan could help you. A credit builder loan is a way to establish a positive credit history that rewards you for paying off the loan.
How a credit builder loan works:
A credit builder loan isn't a loan in the traditional sense. Rather than getting a sum of money upfront that you have to pay back, instead we place the money into a certificate of deposit (CD) for you. You’ll select the amount and term of the loan and then make fixed payments to pay off the loan.
Once you’ve paid off the principal of the loan, including the interest, we will transfer the funds from the CD to your account. You’ll walk away with a current record of paying off a loan on time on your credit report and a decent sum of money that you can save, invest or put towards a financial goal.
First Alliance Credit Builder Loan Details:
- Minimum Loan Amount: $1,000
- Loan Term: 12 months—36 Months
- Interest rate: Certificate of deposit interest rate plus 6.00%, maximum of 17.99%*
- Payment history reported to credit bureaus to build your credit score
- Saved funds are released to you after the loan term expires
- No skip a pay option with credit builder loans
For more information about our credit builder loans we encourage you to contact us.
*Example: if you open a credit builder loan for $1,000 with a 24-month term, we would open a $1,000 CD. If the dividend rate for a 24-month CD is 2.20%, the interest rate on the credit builder loan would be 8.20%. Your monthly payment in this case would be $45.32, and once you pay off the balance of your loan at the end of 24 months, we release the total amount of the CD, $1,044.94, to your checking account.
