13 Best 6-Month Credit Builder Loans & Alternatives (2023)

Credit builder loans are designed to help consumers do one thing: quickly improve (or start) their credit score at reasonable interest rates. In most cases these loans last a minimum of 12 months. But what if you want to run the gantlet of a 6-month credit building spree?

You can, in 5 ways: (1) use a 6-month or less credit builder loan, (2) payoff a long-term credit builder loan at 6 months with no penalties, (3) use a high-interest 6-month standard loan, (4) use a buy now, pay later plan, (5) get a 6-month line of credit.

In this article, we’ll explore 13 credit builder loans and alternatives to improve your score, as well as our top 5 choices so you choose the best path for your circumstances.

Are you looking for a credit builder loan that you can pay off in 6 months?

When it comes to building credit fast, it’s not as simple as going with the first offer you find. You have to consider interest rates, early payment penalties, loan amount, the lender’s credit bureau reporting, and more. Otherwise you could end up paying more than necessary, or worse, not getting the credit bump you deserve.

You need an option that gives you control of the loan, keeps costs down, and builds credit in 6 months or less.

This guide covers the best options based on 7 criteria: duration, credit limit, APR, early payment penalty, soft/hard credit report inquiries during approval, other fees, and credit bureau reporting. We also look at customer service, the structure of the loan and any unique features, such as interest-free periods and revolving credit lines.

What is a credit builder loan?

A credit builder loan is just what it sounds like — a borrowing opportunity that helps boost your credit.

Today, most credit builder loans hold the loan in a savings account while you make your payments. Each payment improves your credit score. At the end of the loan, you receive the money, less any interest and fees. Because you don’t have the money upfront, the bank considers it collateral and your rates are typically lower than a normal loan. With normal loans, you get the money upfront at higher rates.

Here’s a visual to explain where your money is over time with savings-based and money-upfront loans:

But don’t feel like you have to use the savings-based structure. Any time you make consistent payments, you build credit. This article investigates not only the best “classic” savings-based credit builders but also other 6-month or less loans and credit lines with bearable APRs that you can use to build your credit.

What is the best 6-month credit builder loan?

Here are our top choices for the best 6-month credit builder options:

• LoqBox (USA)
• Sezzle
• PayPal Credit
• Opploans
• MoneyLion
• Elements Financial Credit Union
• Possible Finance
• FiCare Credit Union
• Dreamspring
• Self
• Affirm
• Envision Credit Union
• Zip.co

Loqbox Free-Unlock (USA)

Best Overall

Key Features

• 0% APR
• Free loan made possible by opening a checking account and “locking” your loan up until you close the account
• 12 month duration that you can “unlock” after 6 months by cancelling or paying in full

Customer Service

Customers are generally very happy with Loqbox, and most complaints revolve around the optional fee ($40) to distribute funds to an existing checking account, which suggest they did not understand the platform in the first place.

What I Like and Dislike

Here’s a list of what I like and dislike after exploring the service and getting feedback from other users.

Sezzle

Best App

Key Features

• Buy Now, Pay Later app with extended 6-month loans on purchases to build credit
• Reasonable interest rates for installment credit line to build credit
• Card convenience fee up to $5–so make sure you pay with your bank account

Customer Service

Customer service is the reason we rank Sezzle over other BNPL apps, even though the number of eligible merchants is small in comparison. Sezzle regularly receives stellar customer service reviews for help provided over the phone and via chat. It has an “Excellent” rating on TrustPilot.

What I Like and Dislike

PayPal Credit

Best for Credit Line (Not Credit Card)

Key Features

• Non credit card credit line
• 0% APR for 6 months on $99+ purchases
• Can be used anywhere PayPal is accepted

Customer Service

PayPal Credit is provided through Synchrony bank, who handles the customer service and has run into problems for those with international bank accounts. Some users find the platform confusing, and others have trouble when denying services because PayPal tends to side with the merchant, especially for its card branch. However, those using the line of credit typically enjoy the APR-free period and have seen credit boosts when other lenders would not provide services.

What I Like and Dislike

OppLoans

Best Installment Loan (Large Credit Limit)

Key Features

• 59% – 160% APR
• High $4,000 credit limit
• Money upfront instead of in a savings account

Customer Service

OppLoans has a reputation for finding the balance between higher interest rates, good customer service, and transparency. Yes, you will pay more to borrow because OppLoans will not check your credit, but these rates pale in comparison to the high rates of competitors. Customers have recognized OppLoans for a quick approval process and understandable terms.

What I Like and Dislike

MoneyLion

Best Online Loan

Key Features

• Only credit builder loan on the list with partial funds upfront and partial held in savings account
• Maximum 29.99% APR, as low as 5.99%
• Excellent customer service
• Flat cost of $19.99/month in fees

Customer Service

We’re only discussing the credit builder app here, but MoneyLion’s $19.99 includes a range of other services that customers really appreciate. Moreover, exchanges with customer service are typically very smooth, and MoneyLion can afford to keep high quality reps in place by charging the flat monthly fee. If you’re someone who is willing to pay more for a good experience and you’re interested in an online lender, then MoneyLion is best for you.

What I Like and Dislike

Elements Financial Credit Union

Best Credit Union Loan

Credit Unions provide a great deal of opportunity, but because they’re required by law to limit membership based on a commonality, no single CU has reached massive scale and markets its opportunities nationally. In the case of 6-month credit builder loans, Elements Financial Federal Credit Union stands out, offering a $500 line of credit over 6 months at 11.74% APR as of writing. We’ll look at other standard loan from credit unions later, but the APRs are not as favorable.

Our rating: 9.3 / 10

Best for	Credit Union Credit Line
Amount	$500 – $2,500
APR	11.74%
Other fees	None
Bureaus Reporting to	Equifax, Experian, TransUnion
Normal Duration	6 – 12 months
6-Month Solution	Take a line with 6 month repayment terms
Credit Check	Hard Inquiry

Key Features

• Standard line of credit you can pay over 6 months
• Low 11.74% APR rate, comparable with credit builder loans that don’t provide cash up front
• Simple exchange between accounts in your Elements Financial online banking interface
• Must be employed at one of the companies in this table:

Customer Service

Elements Financial Credit Union has a fair reputation, neither good nor bad. Some customers have had issues understanding their terms, and others claim Elements is highly transparent. One thing is for sure, Elements communicates: it has a 100% response rate on Better Business Bureau. It’s an accredited business with an A+ rating.

What I Like and Dislike

Possible Finance

Best for Credit Building Under 6 Months

This is a tough one for us. Possible Finance positions itself as an affordable alternative to PayDay loans with no late or penalty fees. They let you borrow up to $500 instantly and set payment plans over 8 weeks, making this a good option for those who want 6-month loans or less. The trouble is they lack transparency with regards to payment APR and schedules, showing only a few examples in their disclosure page that don’t add up (see below). That said, Possible is a good option for quick credit building in less than 6 months with money upfront.

Our rating: 9.5 / 10

Best for	Credit building under 6 months
Amount	Up to $500
APR	Undetermined based on examples (see below)
Other fees	Origination and CAB fees, though they are undisclosed
Bureaus Reporting to	Experian, Transunion
Normal Duration	2 months
6-Month Solution	Use a Possible loan to build credit in 2 weeks
Credit Check	None

Key Features

• 2 month loan alternative to PayDay loans
• Up to $500 loan amount
• Questionable APR disclosures and seeming lack of transparency, as evidenced by the following claims on their disclosure page:

Customer Service

Possible Finance has normal complaints such as difficulty with the application and delays in depositing funds, but overall is has strong customer service as evidenced by its B rating on Better Business Bureau and a near 5-star rating.

What I Like and Dislike

FiCare Credit Union

Best for Healthcare Professionals

We looked at a credit union line of credit above with Elements, but what about a standard loan? FiCare Credit Union provides $500, 6-Month loans to its members in the healthcare industry at a fixed APR of only 13%, which makes this probably the most competitive credit builder for nurses, doctors, and other healthcare professionals.

Our rating: 9.3 / 10

Best for	Healthcare Professionals
Amount	$500
APR	13%
Other fees	None
Bureaus Reporting to	Equifax, Experian, TransUnion
Normal Duration	6 – 24 months
6-Month Solution	Use the 6 month loan
Credit Check	Hard Inquiry

Key Features

• Available to healthcare professionals accross the country
• 13% fixed APR
• $500, 6-Month loan clean and clear

Customer Service

FiCare has done a good job investing in customer service and has exceptional reviews, with common mentions of the swift application process and healthy customer service line.

What I Like and Dislike

DreamSpring

Best for Small Business Credit Builder

DreamSpring is a New Mexico based non profit lender that specializes in funding entrepreneurs who need to repair their credit. They offer a small $200 loan over six months. The best part? The loan is interest free — 0% APR. You just need to pay a $10 processing fee to get the loan, and you can start building credit as a small business owner.

Our rating: 9.1 / 10

Best for	Small Business Credit Builder
Amount	$200
APR	0%
Other fees	One-time $10 processing fee
Bureaus Reporting to	Equifax, Experian, TransUnion
Normal Duration	6 months
6-Month Solution	Use the loan normally
Credit Check	Hard Inquiry (est.)

Key Features

• 0% interest
• $10 processing fee
• 6 months fixed credit building, with money upfront — not in a savings account

Customer Service

DreamSpring really took off in 2021, closing 10x as many loans in 2021 than any previous year dating back to 2016, so online reviews are limited. That said, it has an A+ rating from Better Business Bureau (but is not yet accredited), and as a non profit is by nature designed to help. That said, some critiques claim that there is a lack of communication and clarity about the disbursement process in 2021, which makes sense when compared with GlassDoor reviews that state the non profit is understaffed given the high distribution of loans that year.

What I Like and Dislike

Self

Best for Simple Option Loans

Self is one of the more prominent credit builder loans, and it’s gained popularity because of how easy it is to understand. There are only four loan types over 12 to 24 months, and payments vary from $25 to $150 per month. The APRs range from 12.44% to 18.47%, making these also quite affordable (image of the offers below). Self is good for those who want a very simple way to understand their credit builder loan. This is a savings-based loan, so you won’t get your money until the end of the term, but you can cancel OR payoff early.

Our rating: 9.0 / 10

Best for	Simple Loan Options
Amount	$520 – $1663
APR	12.44% to 18.47%
Other fees	$9 admin fee
Bureaus Reporting to	Equifax, Experian, TransUnion
Normal Duration	12 – 24 months
6-Month Solution	Cancel OR Payoff at 6 months with no penalty
Credit Check	Soft Inquiry

Key Features

• Cancel OR payoff the loan at any time with no penalty
• 4 understandable payment plans with fixed rates
• ~18% high APR, making this loan more affordable than many
• Savings-based plan, so you’ll get the money at the end of the term

Customer Service

The major downside to Self and why we rank it so low on the list is its customer service. A common complaint is that the company places a fraud flag on your account and cannot disburse your loan at the end of the period. Other common complaints include that the company distributes the funds MUCH later than account cancellation, often for several months and bordering on unreasonable.

What I Like and Dislike

Affirm

Best Sezzle Alternative

If you don’t like Sezzle for any reason, namely because the scope of available venders is small, then consider Affirm. While its APR rates are high and customer service is not the best, you can access alternative venders, which is attractive for those who want to grow credit on purchases.

Our rating: 9.3 / 10

Best for	Alternative to Sezzle
Amount	Up to $3,000
APR	10% – 36%
Other fees	None
Bureaus Reporting to	Experian
Normal Duration	2 months
6-Month Solution	Take an long-term financing option
Credit Check	Soft Inquiry

Key Features

• Only reports to Experian
• Good size credit limit at $3,000
• 10% – 36% APR

Customer Service

Affirm has mixed customer service reviews. Many claim that communication is very weak and that the refund policy is shaky at best, whereas others claim its a great tool for purchases on Amazon.

What I Like and Dislike

Envision Credit Union

Best for Florida/Georgia Residents

Envision Credit Union’s 6 Month, $500 loan is ideal for those who are eligible members — namely people living in Northern Florida and Southern Georgia. It has a decent APR at 16%, which will do the trick to build your credit.

Our rating: 9.0 / 10

Best for	Florida/Georgia Residents
Amount	$500
APR	16%
Other fees	$20 origination fee
Bureaus Reporting to	Equifax, Experian, TransUnion
Normal Duration	6 months
6-Month Solution	Use the loan as normal
Credit Check	Hard Inquiry (est.)

Key Features

• Average loan terms, but one of the rare 6 month loans
• Available only in N. Florida and S. Georgia

Customer Service

Envision has strong customer service and boasts glowing reviews from customers. The one thing it does poorly is fraud protection. Many consumers complain Envision sides with merchants and has a hard time detecting authentic fraud, but that’s only relevant for Credit Cards.

What I Like and Dislike

Zip.co

Best for Wide-Use Buy Now Pay Later App

We’re not a big fan of Zip.co because it’s a Buy Now, Pay Later service with several fees, has unclear credit bureau reporting processes, and a lack of transparency on long-term financing. That said, no one can deny that it’s the most widely accepted BNPL service — available “pretty much everywhere VISA is accepted.” For those who want to roll the dice on a BNPL service with use almost anywhere, though, Zip is right for you.

Our rating: 9.3 / 10

Best for	Wide-Use Buy Now, Pay Later Service
Amount	Unknown
APR	Unknown
Other fees	$6 fee at commencement, Additional $4 – $6 installment fees by size of purchase, APR applicable as well
Bureaus Reporting to	Unknown
Normal Duration	6 months
6-Month Solution	Use the long-term financing as explained at the moment of request
Credit Check	Soft

Key Features

• Can be used anywhere VISA cards are accepted

Customer Service

Like we said, Zip is good for widespread access, but it falls short elsewhere. Zip has slow response times, poor fraud management, and lacks transparency.

What I Like and Dislike

How Loans, Cancellations, and Early Payments/Payoffs Can Impact Your Credit

Nobody can say exactly how credit scores are calculated, and because each person’s credit history is almost as unique as their fingerprint, there’s no one-size-fits-all solution.

That said, the basic principle behind building credit is showing the ability to make payments on time, every time, over time (aka “payment history”). Your score also depends on the various types of credit you have, the average age of credit lines, and how many lines you have.

This means that it’s in your interest to have standing lines of credit for longer periods, so 12 months is better than 6 months. If you decide to payoff and cancel your lines at 6 months, you may be limiting the benefits to your score. Normally, you should also consider early payment fees, but we’ve eliminated any loans with early penalties from the list.

6-Month Credit Builder Loan Comparison Table

Here is a tabular view of the offers on our list so you can easily compare them side-by-side:

Lender	Rating	Customer Service	Name	Type	Early Payment Penalty	Bureau(s)	APR	Loan Amount	Normal Duration (Months)	Credit Check	Other fees
LoqBox	9.6	Good	Loqbox Free-unlock	Credit Builder Loan, Pay Early	None	Equifax, Experian, TransUnion	0.00% – 0.00%	$240 – $0	1 – 12	Soft Inquiry	None
Sezzle	9.5	Very good	Long-term financing	Buy now, pay later	None	Equifax, Experian, TransUnion	5.99% – 34.99%	$0 – $2500	3 – 48	Soft Inquiry	Up to $15 reactiviation fee when payment fails, $7.50 rescheduling fee after 1 free reschedule, up to $5 debit/credit convenience fee
PayPal Credit	9.4	Good	PayPal Credit	Line of Credit, 6 Month Duration	None	Equifax, Experian, TransUnion	$2 – 26.24%	$250 – $0	6 – 6	Hard Inquiry	None
Opploans	9.3	Good	Installment Loans	High-Interest Loan, Online Lender	None	Equifax, Experian, TransUnion	59.00% – 160.00%	$500 – $4000	9 – 18	Soft Inquiry
MoneyLion	9.2	Very good	Credit Builder Loan	Credit Builder Loan, Pay Early	None	Equifax, Experian, TransUnion	5.99% – 29.99%	$1000 – $1000	12 – 12	Soft Inquiry	$19.99 membership to MoneyLion
Elements Financial Credit Union	9.3	Fair	EZ Line of Credit	Line of Credit, 6 Month Duration	None	Equifax, Experian, TransUnion	11.74% – 11.74%	$500 – $2500	6 – 12	Hard	None
Possible Finance	9.5	Very good	Possible Loan	Credit Builder Loan, 6 month	None	Experian, Transunion	Unk	$0 – $500	2 – 2	None	Origination, CAB, though amount undisclosed
FiCare Credit Union	9.3	Very good	Credit Builder Loan	High-Interest Loan, Credit Union	None	Equifax, Experian, TransUnion	13.00% – 13.00%	$500 – $500	6 – 6	Hard Inquiry (est.)
Dreamspring	9.1	Fair	Credit Builder Loan	Credit Builder Loan, 6 month	None	Equifax, Experian, TransUnion	0.00% – 0.00%	$200 – $200	6 – 6	Hard Inquiry	$10 Processing
Self	9.1	Poor	Self Credit Builder Loan	Credit Builder Loan, Pay Early	None	Equifax, Experian, TransUnion	12.44% – 14.87%	$520 – $1663	12 – 24	Soft Inquiry	$9 admin fee
Affirm	9	Poor	6 Monthly Payments	Buy now, pay later	None	Experian	10.00% – 36.00%	$0 – $3000	2 – 2	Soft Inquiry	None
Envision Credit Union	9	Fair	Extra Credit Loan	High-Interest Loan, Credit Union	None	Equifax, Experian, TransUnion	16.00% – 16.00%	$500 – $500	6 – 6	Hard Inquiry (est.)	$20 origination fee
Zip.co	8.9	Very poor	Zip Easy Installments	Buy now, pay later	None	None	Unk	$0 – $0	6 – 6	Hard Inquiry	$6 fee at commencement, additional $4 – $6 installment fees by size of purchase, APR applicable as well

FAQ

Frequently Asked Questions about Credit Builder Loans and Alternatives

How does a credit builder loan work?

A credit builder loan works by demonstrating your ability to make timely payments to credit bureaus, which thereby improves your credit score. There are two types of credit builders: (1) those that keep your funds in savings over time, and (2) those that release the money upfront. Savings-based credit builders typically have lower APRs.

How do I take out a credit builder loan?

You can take out a credit builder loan by clicking on any of the links in this guide, accessing the application/sign-up page on the lenders site, and completing it. Most offer instant decisions.

How much money can you get with a credit builder loan?

Based on our research of over 20 different lenders, credit builder loans typically offer between $200 and $4,000 in loan amounts, with an average of about $500.

Do you get money from a credit builder loan?

Yes, you get money from a credit builder loan. It’s a question of when you receive the money. Savings-based credit builder loans disburse funds at the end of the payment schedule, less interest and fees, whereas normal installment loans to build credit disburse at the start. There are also lines of credit like PayPal Credit that build your score, and these disburse funds on a revolving basis as you need it.

Do credit builders really work?

The Consumer Financial Protection Bureau performed a study that confirmed credit builder loans do indeed work. They are especially beneficial to borrowers without an existing credit score, who can expect an increase of 24% in establishing a score with a 60 point higher bump than those with existing credit.

Study participants had an average credit score of 560, and 45% had a delinquency in the preceding 12 months. The results are encouraging, because almost everyone can benefit from credit builder loans, although big-leaps are found in those establishing credit for the first time as with any credit line.

Summary

We’ve looked at 13 credit building offers over 6 months, each of which falls into 1 of 5 categories: (1) 6-month or less credit builder loan, (2) long-term credit builder loan at 6 months with no penalties, (3) high-interest 6-month standard loan, (4) buy now, pay later plans, and (5) 6-month lines of credit.

Now it’s time for you to decide. What option works best for you? Here’s a recap so you can make the choice and get started today. if you’re not approved for your first pick, don’t give up. Credit building is a long-term game, and the sooner you start attacking these offers, the better.

Name	Best for…
LoqBox	Best Overall
Sezzle	Best App
PayPal Credit	Best Credit Line
Opploans	Best Installment Loan
MoneyLion	Best Online Loan
Elements Financial Credit Union	Best Credit Union Loan
Possible Finance	Best for Credit Building Under 6 Months
FiCare Credit Union	Best for Healthcare Professionals
DreamSpring	Best for Small Business Credit Builder
Self	Best for Simple Option Loans
Affirm	Best Sezzle Alternative
Envision Credit Union	Best for Florida/Georgia Residents
Zip.co	Best for Wide-Use Buy Now Pay Later App

Conclusion

If you like this article and want to learn more about offers in the personal finance space, check out the page here (opens in new tab). If you want to get your hands on really understanding how data and finance work, check out the AnalystAnswers.com homepage here (opens in new tab).