Self Lender is a financial technology company based in Austin, Texas, which was founded in 2014. Self Lender is not a direct lender. Instead, it works with Austin Capital Bank SSB, a Texas chartered state savings bank that is an FDIC member, so your money is insured by the U.S. Government.
Self Lender is a company that gives people with poor or no credit the chance to improve their credit history. This is done through a set of tools that help consumers rebuild their credit score. The main credit building tool Self Lender uses is the "credit builder loan,” also known as a savings-secured installment loan. This is a special type of loan. In fact, it is more of a savings account packaged as a loan to add positive information to your history. Self Lender also provides consumers with resources that help them monitor their credit score and learn about finance, and get access to exclusive financial products.
Credit builder loans are risk-free loans for lenders. The “lender” deposits the money in an escrow account as a certificate of deposit (CD). This means practically everyone qualifies for a loan with Self Lender. The catch is that borrowers don't get access to the money until they completely pay off the loan by making 12 equal payments over the term of the loan. These deposits are reported to the three main credit bureau agencies every month as if they were loan payments. Borrowers can also repay the loan early without having to pay prepayment penalty fees.
First, you choose what monthly payment you want. Self Lender has three options $48.50, $97, or $194 a month. You then pay a $12 fee to open the account and make 12 monthly payments. After 12 months, you’ll receive your savings ($550, $1,100, or $2,200) plus interest.
Notice that this type of loan is not an option for people who need the money immediately.
Self Lender does not charge interest on its loans. However, that’s because it’s not a real loan. You can only access the money when you’ve completely repaid the loan.
There is a $12.50 fee to set up the loan. So you are in effect paying Self Lender to open a savings account. However, there is no hard pull on your credit, as you would get if you opened a regular bank or credit union account.
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