Self Lender Review: Build Credit and Savings

This post is brought to you by Self Lender. While this post was sponsored by Self Lender, all content and opinions expressed here are my own.

PT’s note: I first heard about Self Lender when a close friend asked me, “hey, is Self Lender legit?” His wife wanted to start improving her credit and wanted to know if Self Lender was a good option. It’s definitely a novel concept and has that too-good-to-be-true feel. As it turns out, they are legit (I’ve met their team in person) and so we decided to give them the full review treatment today. Here’s Emily…

Building up your credit rating can feel like an impossible chicken-or-egg scenario. Right? Without a proven credit history, lenders and banks are hesitant to extend credit to you—but without credit extended to you, you can’t build a proven credit history.

The classic advice for skirting this credit Catch-22 is to apply for a secured credit card. These cards require a deposit up front that will be used as collateral in case of default—which means folks with poor (or non-existent) credit can use them to improve their scores.

While secured credit cards can be a good way for you to beef up your credit rating, they aren’t for everyone. Some folks don’t want cards in their life. And a secured credit card requires a big, upfront deposit.

This is where Self Lender comes in. With Self Lender, you can apply for a credit builder Certificate of Deposit (CD) account to help you improve your credit history and provide you with a savings vehicle at the same time.

Here’s what you need to know about how Self Lender works and whether it will be a good fit for improving your credit score:

The Self Lender Credit Builder Account

While Self Lender offers resources that you can use to monitor your credit score and credit history, their credit builder account is the centerpiece of the platform.

This account—which Self Lender offers through one of its two bank partners, Lead Bank and City National Bank of New Jersey—is a CD-secured installment loan.

That means the FDIC-insured CD provides collateral against your loan, so the qualifying criteria are much less rigorous than what you’d find with unsecured credit cards or traditional personal loans.

No credit history is required and the loan requires no hard pull, so the Self Lender account cannot hurt your score.

Once you’ve been approved for a credit builder account, you are issued a small loan that is held in the CD until you repay it. Each plan also includes credit monitoring.

Credit builder accounts from Self Lender come in four possible loan amounts ($525, $545, $1,000, and $1,700) offered with either 12- or 24- month terms. You open the account with a small non-refundable activation fee of between $9 and $15, and then you make equal monthly payments for the duration of the term. At the end of the term, you receive the original amount of the loan, plus interest earned by the CD.

Credit Builder Account Options

Loan Amount	Monthly Payment	Term	Activation Fee	APR	Total Cost to You	What You Get At End of Term
$525	$25	24 months	$9	14.92%	$609	$525 + CD interest
$545	$48	12 months	$15	15.65%	$591	$545 + CD interest
$1000	$89	12 months	$12	14.62%	$1080	$1000 + CD interest
$1700	$150	12 months	$12	12.03%	$1812	$1700 + CD interest

While you are in the midst of repayment, your on-time payment history is reported to the three credit bureaus, which helps to improve your credit score. As Self Lender itself reports on its site, payment history accounts for 35% of your credit score, the single largest factor in credit calculations.

Once you have paid off the loan, the CD matures and unlocks with earned interest, which means you’ve built your credit and your savings at the same time.

Self Lender Conditions and Fees

The credit builder account is now available in ALL 50 STATES, which means everyone across our nation has a chance to use this helpful tool.

It’s important to remember that the credit builder account is not free. Assuming everything goes without a hitch with your credit builder account, you will pay an APR of between 12.03% and 15.65% for your loan (better than most credit cards). This APR includes the non-refundable activation fee and the interest rate you pay. There are also additional fees and conditions to be aware of.

First, a payment that is over 15 days late will incur a late fee of 5% of the payment due. Self Lender describes this as a “one-time fee,” which means there is only one late fee per month. But you could potentially pay this late fee multiple times if you are regularly more than 15 days late in making your monthly payment.

If you are more than 30 days late in making a monthly payment, it will be reported as a late payment to the credit bureaus—defeating the very purpose of the account. There is an automatic payment feature, however, which can help you to avoid late payments.

Credit builder account holders who default will have the default reported to the credit bureaus, and the account will be closed. The funds in the account will be returned once the remaining loan principal, interest, and fees have been paid.

Is Self Lender Right For You?

According to credit expert Jason Steele, “this program definitely has a place for people who want a financial vehicle to build credit, but don’t want or need a credit card. Clearly, many credit card users overspend and incur debt, which isn’t a factor with Self Lender.”

The fact that borrowers also end up with a large windfall of cash once the term is complete is also a big potential benefit, depending on your money psychology. If you are the sort of person who has trouble keeping track of small amounts of money, but you are pretty responsible with big sums (like your annual tax refund, for instance), then a Self Lender credit builder account could be a great fit.

However, Steele points out that there are some drawbacks to the credit builder account:

“There’s the $9-$15 to open an account, as well as the fact that your 12 or 24 monthly payments will add up to more than the CD you are receiving. For example, you can make 12 $150 payments for a total of $1,800 to receive a CD of $1,700, so you are paying $100 more than you will eventually receive.”

If you are capable of responsible spending with a secured credit card with no annual fee, then Steele recommends that option in addition to Self Lender. A secured card is free to any user who pays off the card each month and can afford the initial deposit.

Any person who just doesn’t want to deal with card spending, however, will be better served with just a Self Lender credit builder account, as it takes the temptation of spending off the table, and provides a nice savings windfall at the end of the term.

The Bottom Line

The Self Lender credit builder account is not going to be the right product for everyone looking to improve their credit rating. However, for the individuals who don’t want to bother with a credit card and who want to build better credit, better financial habits, and a nice little nest egg at the same, Self Lender’s credit builder account is an excellent option.

The good news: you can do both! Many folks end up with a secured card (revolving credit) and a loan from Self Lender (installment credit) to fast-track their credit repair.

Get started with Self Lender today!

6 Comments

ok, i basically dont think this might sound real but i came across a tech guy last year that helped to pay off credit card debts, increase credit score and loans payments online..hacknspytech at gmaildotcom…completely anonymous/mode of payment is incredible as well.

“It’s definitely a novel concept and has that too-good-to-be-true feel.”

Eh, but does it really? If you are the kind of person who, say, regularly reads finance blogs, paying a fee to save your own money seems less too-good-to-be-true and more taking-advantage-of-the-poor (or financially ignorant).

For example, what happens if you have an emergency and need access to the money? If you just saved it in a regular savings account you could simply withdraw it. With Self Lender there’s a fee to close your account early (the amount of which they don’t tell you in advance — you have to call them). What if you can’t pay at all? With a regular savings account there’s no monthly payment requirement so you’d just stop making payments and keep whatever you saved. With Self Lender, since it’s actually a loan, I’m guessing you lose you payments up to that point, winding up with nothing (again, the website isn’t clear here). Oh and to boot you’re going to get a ding on your credit for not being able to keep up with your commitment to “pay yourself”.

Emily Guy Birken says:
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Hi Bryan,
You are not wrong about the potential downsides of the credit builder account, but it’s important to remember exactly who this kind of account was created for. There are individuals in the world who do the need the help of external pressures to save money and build their credit, and that is who the credit builder account can help.
To put it in perspective, I liken the need for external pressures to save to my need for external deadlines to get my writing done. Theoretically, I should be able to write every day without having an editor who expects to get a draft from me, but decades of experience have made it clear that I need to have some sort of taskmaster. This is why I’m still working on a novel I started nearly 10 years ago but I’m able to freelance successfully.
I think it’s important to recognize that there are people who struggle with creating internal pressures and motivations to make the best money moves. For such individuals, these sorts of programs can be a lifeline that can help them to improve their financial situations. There are certainly caveats and potential downsides to consider with this or any kind of financial product. But I am personally committed to letting people know that such programs and products exist–so they can start the important work of improving their finances without shame.
1. Bryan says:
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  But considering you can set up auto pay with Self Lender, does it really increase the pressure or motivation any more than setting up an automatic transfer into a savings account? I’ll grant you that sure, if you are talking about someone who has absolutely NO self control, this might be a better solution than putting the money in a savings account, because you have to go through more hoops (and wait longer) to get your money out, so you get some insurance against impulse spending. I certainly know a person or two who could benefit from this… assuming they can resist the same temptation at the end of the 12- or 24- month period. But I would never in good conscience suggest Self Lender to them as anything but a last resort.
  But at the end of the day everybody’s different, and I’ll never be able to convince my one friend that paying the government an interest-free loan is stupid while he spends 11 months a year waiting on his tax refund so he can finally buy that “one” thing he needs to get his life on track. This seems to be the sort of client Self Lender wants, and there are certainly a lot of those types out there.
  What *really* bothered me about the post was calling Self Lender “too-good-to-be-true”. I guess the click bait worked, because it’s the only reason I read the whole article, but how unbelievable is it that a financial institution wants to charge you money to keep your own money? Any time I hear a commercial for a bank on the radio it’s a straw man about how “the other guy” charges all those fees so you should go with us instead.
  1. Philip Taylor says:
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    I know click bait and I don’t write it. I wrote that it has the “feeling” of being too good to be true. And to my friend who reached out to me and was questioning the product, it did have that feeling for him. He didn’t know to trust it AT ALL. That’s all I meant. Sorry you felt duped.
    Yes, the product comes with costs, but I disagree that they are in anyway predatory.
  2. Chris says:
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    The difference is this helps those with poor credit rebuild it at the same time they are saving money. From experience it costs a lot more to have a service that helps, or a very high interest CC that you have to pay anyways, so the fees incurred are worth it to some.

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