We write a lot about credit here on the Carloan.com blog, and for good reason. A good credit score can not only help you get a car loan but it can get you a better rate and save you money.
We like that.
If you have bad credit or no credit, and you’ve tried to get a loan or a credit card, you’ve probably realized that it’s not always easy.
The Classic Catch 22.
You need credit to get credit, but you can’t get credit because you don’t have credit. It’s a vicious circle.
But there are ways to get out of that circle. It takes a little effort, of course, but doesn’t anything that’s worthwhile?
It’s been awhile since we wrote our blog post with some of the top methods for building your credit (“The No-Credit Dilemma: 5 Ways to Get the Credit You Need”). If you haven’t read it, it’s a great resource.
But today we can give you a little more help with one of the methods: the secured personal loan.
Credit Builder Loans
It breaks down like this: you put some money together – say $1,000 – then get a certificate of deposit (CD) at your bank or credit union. You then use that CD as collateral to get a one-year loan in the same amount. You make on-time payments on that loan for a year until it’s paid off, and voila, you now have credit. The only cost to you is the interest you pay over the year.
Of course, one challenge could be putting together the initial cash for that certificate of deposit. But we found a solution.
No Money Required
Enter Selflender.com. These guys put together a deal with a bank to offer loans of $1,100 with a current interest rate of 12.52%. The cool thing is, the $1,100 goes immediately into a certificate of deposit. You don’t need your own money to secure the loan!
Payments are $98 per month, and at the current interest rate, you’ll pay about $76 for the whole year in interest. That’s a pretty small price to pay for building credit.
What’s more is that at the end of the loan term, you get the money from the CD with interest. Okay, it’s not much interest (about a dollar) but still, you have that money to maybe use as a down payment for a car loan.
So if you’re looking to build credit and you can swing $98 per month, this deserves a look.