What is a Credit Builder Loan?
A Credit Builder Loan is a loan that’s designed to assist Staley CU members with no credit or past credit issues who wish to establish a better credit history. The funds borrowed are secured and deposited in the member’s savings account while regular payments are made. Once the loan is paid off in full, the funds in the savings account will be released and available for future use.
5.70% APR fixed rate*
Loans from $250 to $2,500
6 to 24-month terms
Established credit score not required
How does a Credit Builder Loan work?
The loan amount is funded into your Staley CU savings account, which secures the loan. Your loan status is reported each month to the 3 credit reporting agencies. As each monthly payment is made on a timely basis, your successful credit history will begin to develop. Once the loan is paid off, the funds are released to you.
We report your payment history to the credit bureaus, which helps demonstrate your creditworthiness as a future loan candidate. At the same time, the money that you’ve built up while making regular payments helps to provide you with an established savings.
Recommended Loan Structure
Building one’s credit is not accomplished instantly. Building a solid credit history through successful loan repayment is a process. The process we recommended would be a series of 3 loans as follows:
1st Loan
$250 to be repaid over 6 months
2nd Loan
$500 to be repaid over 6 months
3rd Loan
$1,000 to be repaid over 12 months
* Member must be in good standing with Staley Credit Union. Maximum loan amount up to $2,500 per loan with a maximum term up to 24 months. Member can only have 1 active Credit Builder Loan at any point in time.
Payment Example: A $1,000.00 loan for 12 months with a 5.7% APR would result in a monthly payment of $85.95.