Banks That Offer Credit Builder Loans
Banks that offer credit builder loans are very important to individuals looking to increase their credit score. Time and money wait for none and sometimes we learn the biggest lessons of life in the hardest way. So, if you had been spending recklessly in the past without a proper budget or financial plan then chances are all that bad habit will take a toll and reflect on your credit score. Whether your bad credit rating is because of impulsive expenses done in the past or due to a medical emergency, the good news is – all is not lost for you!
You can still improve your credit score and nurture it back to health. There are several credit unions and banks that offer credit builder loans. These are special loans designed to help people rebuild their credit scores and regain their financial control.
Where to look for banks that offer credit builder loans?
Inquire about the facility of credit builder loans in the bank where you hold a savings account. If they do not offer such loans then maybe you can look online for banks that do and get a savings account opened in one of the banks that offer credit builder loans.
Apart from the banks, there are several member-owned credit unions that provide such loans. These institutions are eager to help other establish their credit and improve their scores. The credit unions also offer several other tools such as free credit counseling, low-cost secured loans, and low-cost secured loans.
The credit unions usually take a consultancy approach to the problem, hence they do not charge heavy fees for the services offered.
How does credit builder loans help improve the damaged scores?
The banks that offer credit builder loans do not check your eligibility as these types of loans can be taken by anyone. These loans are offered in small amounts usually within a range of $500-$3000 and they help the borrowers rebuild their credit scores.
The interest rate is kept low, usually 5 percent. However please bear in mind that the rate of interest charged by banks or credit unions may vary so check the fine prints before taking a loan.
So, when a person requests for such a loan, the banks deposit the amount in a savings account. It cannot be accessed until the borrower repays the amount to the bank in monthly installments.
After the loan amount has been repaid, the bank reports the timely monthly payments to the credit bureaus. Thus, this is a slow but effective method to improve credit scores.
Besides offering credit builder loans, the credit unions may also offer free counseling over phone or through face to face meeting. They also offer a plethora of online credit building tools that include free online resources, educational tools and so on.
Some banks and credit unions may also offer other options to improve credit scores. One such method is secured credit cards that are usually issued to people with little or almost no credit history. However this option may be expensive for those with bad credit scores.
Hence we suggest that you look for credit unions or banks that offer credit builder loans as this is a slow yet steady way to improve your credit score.
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