Self Lender Review 2019

Are They The Best Credit Builder Loan In 2019?

In this Self Lender review, we're going to show you how Self Lender works, its pros and cons, and whether a credit builder loan is right for you.

Updated: Apr. 26, 2019 

mike-pearson

Are you wondering if Self Lender is a legit credit builder loan option that's worth your time? Are you wondering if you can trust them?

If you're thinking of using Self Lender to help build your credit, then you need to know how they operate, how they can help you, and what the costs and fees are.

In this Self Lender review, we're going to tackle all the pros and cons of using a credit builder loan service like this one.

Self Lender review at a glance

Self Lender Pros

  • "A" rating from the Better Business Bureau
  • Low fees and easy approval
  • Flexible payment options
  • Build your credit and savings

Self Lender Cons

  • Cannot put your account on "pause"
  • Cannot withdraw your money early

What is Self Lender?

Self Lender is a "financial technology company" which offers credit builder loans to people looking to improve their credit.

What's a credit builder loan, you ask?

It's basically a loan that the bank holds onto (in a certificate of deposit) until you pay it off in full. 

And as you pay off the loan each month, your payment history gets reported to the credit reporting agencies, which in turns helps build your credit score (payment history accounts for 35% of your total credit score).

At the end of the loan term, after you've paid it off in full, your principal unlocks and (minus the interest of the loan) is paid back to you.

How does Self Lender work?

Let's take a deeper dive into how exactly Self Lender works, so you can decide if it's the right choice for you.

Once you sign up with Self Lender, they will open a certificate of deposit (CD) account in your name (this CD will be opened with Sunrise Bank, Lead Bank, or Atlantic Capital Bank).

The only requirements are that you are at least 18 and have a valid social security number and bank account. They don’t guarantee approval, but their approval rating is very high.

One of the most unique things about Self Lender is that you choose your loan term and your payment amount.

You can choose to pay $25, $48, $89, or $150 per month. And you can choose to pay it off in either 12 or 24 months, depending on the payment amount you choose.

They do charge a one-time activation fee when you set up your account, but it’s very small, ranging from $9 - $15.

And you’ll also pay interest on your “loan” at a rate that ranges from 10.34% - 13.16%, depending on your loan amount. 

During your loan term, you’ve built up a nice savings and they’ve reported your on-time payments to the credit bureaus.

Of course, this can work against you if you miss or have late payments. So, even though it’s your money, it’s still important for you to treat it like a traditional loan.

At the end of your loan term, you're free to cash in your CD that includes the amount you deposited, minus interest fees. And they are very straightforward about how much this amount is.

When you click on the “Pricing” tab in their menu, you’ll see a sliding scale that tells you how much you’ll received based on the payment amount you choose. 

So, as you can see from this example, if you choose to pay $25 a month for 24 months, you’ll receive $525. At the end of the term, you will have deposited a total of $600, plus paid a $9 fee.

Note that with a Self Lender CD, you can pay your loan off early, but you cannot withdraw your money until it’s entirely paid off

Managing your loan

The entire process with Self Lender is completely transparent.

Once you’ve opened your account, you’ll have access to your very own customized account management dashboard. Here, you can view your balance, download your account documents, and track your credit score. 

Monthly payments are automatically deducted from your bank account, and you have the option of making early payments or paying your account off entirely on your Dashboard.

Getting your money

At the end of your loan term, Self Lender will automatically deposit your accumulated funds into your bank account on file.

They say it usually takes about 10-14 business days for the money to show up in your account. 

Self Lender features and benefits

1. Easy approval

Self Lender’s approval process is relatively painless.

Their only requirements are that you be at least 18 years of age, have an active checking account, and a valid social security number. And instead of going by your credit score, they determine your eligibility through ChexSystems. 

ChexSystems is a company that tracks your banking history, reporting returned checks and closed accounts.

Basically, though, you only have a negative report if you have had bank accounts closed due to overdrafts or if you had returned checks you haven’t taken care of. 

2. Credit building

Building your credit from scratch and rebuilding your credit are completely different in terms of bureau reporting. 

When building your credit from zero, it takes at least 3-6 months to establish a score—this is because once you’ve opened a line of credit, it will take 30-45 days for your lender to report it to the credit bureaus, and then it takes 3-6 months of activity for the bureaus to have something to calculate.

When rebuilding your score, however, there are a lot more factors that come into play. You'll probably see a bit of a change earlier than someone building credit for the first time because you already have a calculable score. 

Self Lender immediately reports your account to the credit bureaus. Then, it’s up to you to make your payments on time so they can report your positive activity.

Just how much your credit score improves will vary from person to person.

If your score is low because you’re using too much of your available credit, then this loan could boost your score significantly by opening more up.

But if your problem is a history of a lot of late payments, it may take some time for this to make a difference. 

3. Credit scores and credit monitoring

With your Self Lender dashboard, you’re able to log on any time to check your credit score.

You're also provided with credit monitoring, which will help you track your progress and monitor for any changes.

How to apply for a Self Lender loan

Applying for a loan with Self Lender is easy.

Just click this link, and then hit the orange “Get Started” tab on their homepage.

You’ll then be directed to a page where you’ll fill out your banking information (for automatic payment withdrawals), social security number, phone number, and address. 

Next, you’ll be asked to choose the terms of your loan.

You’ll commit to an amount of $25, $48, $89, or $150. Then you’ll just click on the “apply” button at the bottom of the page.

As we said earlier, they don’t check your credit, but they do run a ChexSystems report to see if you have a negative banking history.

The whole process takes just a few minutes, and you’ll have a decision immediately.

How much can you borrow?

You can borrow up to $1,700 with Self Lender, and as little as $525. 

Here's how much you'll pay monthly for the total amounts you can borrow.

Amount Borrowed

Monthly Payment

Total Months

$525

$25

24

$545

$48

12

$1,000

$89

12

$1,700

$150

12

Fees & terms

Self Lender is very transparent about its fees and terms, but you should never go into a credit agreement blindly.

These terms are fairly standard for lines of credit in that they do have fees, interest, and late fees.

Just remember that your terms will vary according to the loan amount you choose.

Here’s a breakdown of each one:

$525 Loan

  • Monthly payment: $25 (24 months)
  • Non-refundable administrative fee: $9
  • Interest rate: 13.16%
  • APR (Annual Percentage rate): 14.92%
  • Finance charge: $84
  • Total amount of payments: $600

$545 Loan

  • Monthly payment: $48 (12 months)
  • Non-refundable administrative fee: $15
  • Interest rate: 10.34%
  • APR (Annual Percentage rate): 15.65%
  • Finance charge: $46
  • Total amount of payments: $576

$1,000 Loan

  • Monthly payment: $89 (12 months)
  • Non-refundable administrative fee: $12
  • Interest rate: 12.32%
  • APR (Annual Percentage rate): 14.62%
  • Finance charge: $80
  • Total amount of payments: $1,068

$1,700 Loan

  • Monthly payment: $150 (12 months)
  • Non-refundable administrative fee: $12
  • Interest rate: 10.69%
  • APR (Annual Percentage rate): 12.03%
  • Finance charge: $112
  • Total amount of payments: $1,800

And here's an explanation of what each one of these fees & charges mean:

  • Non-refundable administrative fee. This is the fee you’ll pay when you open your account. And as you can see from the charts, it varies from $12-$15, depending on the amount of your loan.
  • Interest & APR: The interest charges may look a little confusing, but there is actually a difference between an interest rate and APR. The interest rate is the amount of interest you’re charged, but your APR is the interest plus other fees you’ll incur. Most other lenders like credit card companies only charge APR on balances remaining past the due date. But Self Lender calculates these fees in from the very beginning. 
  • Finance charge. The finance charge is the total cost of borrowing—basically, the interest plus the fees.
  • Late fees. Self Lender allows you a 15-day grace period past the payment due date. But if you go past that, you’ll be charged a late fee that is 5% of your monthly payment amount. 

Other ways to build credit

While a credit builder loan is one of the least costly ways to build your credit, it may not be for everyone.

If you have a negative ChexSystems history, for example, Self Lender may not approve your account. Also, if you need access to funds right away, putting money into a CD may not be the best option for you.

In any case, you might just want to explore your options, or you might want to add other types of credit to your portfolio since credit mix factors into your score

  • Secured credit cards. Secured credit cards are accounts where you make a deposit equivalent to your credit limit. Usually, you’ll get your deposit back at the end of a specified amount of time if you consistently make your payments on time.
  • Store credit cards: There are some credit cards with more lenient qualification criteria, and a store card is usually one of them. 
  • Authorized user. You can ask your parents or spouse to add you as an authorized user on his or her credit cards. This way, their positive credit habits will also be reflected on your report.
  • Co-signer. Almost any lender will allow you to use a co-signer who meets their credit criteria.

Credit builder loans vs secured credit cards

Credit-builder loans differ from secured cards in a couple of ways. 

First, with a secured card, you’ll have access to a line of credit right away. But with a credit-builder loan, you won’t get your money until the end of the term.

And when you apply for a secured card, you have to deposit the entire amount of your credit line upfront. But a credit-builder account allows you to start with just one low monthly payment. 

The second main way they differ is in the amount of their fees.

Secured credit cards usually require an annual fee, which can range from around $30 to $80, depending on the card.

And while credit-builder accounts do come with fees, they’re usually much lower. Self Lender’s fees are between $9 and $15. Also, this fee is a one-time fee, regardless of whether your account is active for one year or two.

Given these factors, you’d have to decide for yourself which option is better for you.

Credit builder loans tend to be a cheaper option, but secured credit cards give you an immediate line of credit. 

Final thoughts

Self Lender credit-builder loans are a great way to build up savings, improve your credit score, and develop responsible habits.

If you have free options available to you, such as becoming an authorized user on someone else’s account, it’s wise to explore those first.

Otherwise, a credit-builder loan with Self Lender is possibly the least expensive and easiest tool you can use to build or rebuild your credit.

About the Author


mike-pearson

Mike Pearson

Mike is a recognized credit expert and founder of Credit Takeoff. His credit advice has been featured in Investopedia, CreditCards.com, Bankrate, Huffpost, The Simple Dollar, Reader's Digest, LendingTree, and Quickbooks. Read more.

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