The trouble with credit builder loans is they (usually) lock up your money until you repay the loan in full. These are called “payment-secured” credit-builders and they’re great for credit, but not when you need cash. The good news is some lenders provide a special kind of credit-builder that pays upfront.
In this article I rank and review 10 of the most popular options, as well as our top 4 picks so you can pick what’s best for you.
Our Top Picks
Best for Suite of Services (Loans, Cards. Accounts)
Rating: Middle
Max Principal: Highest
High-side APR: Middle
Best for Fast, Large Loans ($50k)
Rating: Middle
Max Principal: Highest
High-side APR: Highest
Best Credit Line for the Lazy Ones
Rating: Lowest
Max Principal: Lowest
High-side APR: Lowest
Do some credit builder loans really provide money upfront?
Yes. Some lenders have created a special kind of credit-builder with the same flexible eligibility criteria but disburses cash upfront. They’re called “unsecured” credit-builders.
By definition, the purpose of credit builder loans is to improve your credit score. Most lenders market “credit builders” as structures that lock up your payments in savings until the loan matures. Nobody likes that. That’s where unsecured CBLs come in.
What’s more, according to the National Bureau of Economic Research1, they can improve you score by as much as 55 point in only 12 months.
That said, not all loans are alike. You need to consider things like duration, APR, principal amount, and other fees. You also have to consider the loan’s purpose, because a pretty-faced offer may run a hard credit check and deny you. Plus, you don’t want to end up with bad customer service.
That’s why we wrote this guide that ranks* the best credit builder loans with money upfront based on the following criteria:
- Structure
- Principal Amount
- Duration
- Credit Check
- Customer Service
- APR (Interest rate)
*We use a peer-group scoring system that assigns absolute value based on proximity to standard deviation from the mean.
The basic idea here is that the loan needs to minimize costs, maximize chance of approval, and boost your credit.
Let’s get started.
What’s the best loan to build credit with money upfront?
Here are our top picks for the best credit builder loans that don’t lock up your money:
- Prosper
- Upgrade
- Upstart
- Kikoff
- MoneyLion
- Navy Federal Credit Union
- Dreamspring
- Republic Bank
- Metro Credit Union
- Southwest Financial Credit Union
Prosper
Best Overall
My Take
Prosper is a peer-to-peer lending platform that checks nearly all the boxes. You can take out loans up to $50k at honest APR rates under 36% (the golden standard) over periods from 3 to 5 years with only a soft inquiry on your credit (so no impact) and a competitive 1% – 5% origination fee.
No other option on our list offers all these qualities together. That said, Prosper doesn’t accept everyone, so you’ll have to apply to find out (with no impact on your credit score).
Our rating: 9.45 / 10
Max Principal: $50,000
Highest APR: 35.99%
The Details
| Max Principal | $50,000 |
| Min Principal | $2,000 |
| Duration High (mnths) | 60 |
| Duration Low (mnths) | 36 |
| Credit Check | Soft Check |
| Customer Service | Good |
| APR High | 35.99% |
| APR Low | 6.99% |
| Origination Fee | 1% – 5% |
| Other fees | $0.00 |
Key Features
- Prosper is able to offer such favorable terms because it is an intermediary between investors and borrowers, which means the risk is split across multiple people rather than with one bank.
What I Like & Dislike
Like
- Best overall combination of key metrics that will keep costs low, provide a considerable loan up front, and drive your credit in the right direction as you make payments
- Transparent team of professionals funded by venture capital in California
- Soft credit check that won’t hurt your credit
Dislike
- May not be suitable for those looking for loan amounts under $2k
- The 3 year minimum commitment may not cater to the needs of every consumer
Upgrade
Best for Suite of Services (Loans, Cards. Accounts)
My Take
Upgrade offers loans up $50k with APRs all under 36% over minimum 2 years, making it highly competitive from a purely financial view. That said, it also offers cash back cards and rewards checking accounts that you can leverage on the path to credit score health. Upgrade will run a hard inquiry after you’ve been approved and seen the payment schedule, which will include an origination fee up to 8.99%.
Plus, if you open a rewards checking account and make 3 debit card payments in 60 days, you’ll get $200, reducing the ultimate cost of your loan.
Our rating: 9.35 / 10
Max Principal: $50,000
Highest APR: 35.97%
The Details
| Max Principal | $50,000 |
| Min Principal | $0 |
| Duration High (mnths) | 84 |
| Duration Low (mnths) | 24 |
| Credit Check | Hard Inquiry |
| Customer Service | Excellent |
| APR High | 35.97% |
| APR Low | 7.96% |
| Origination Fee | 1.85% – 8.99% |
| Other fees | $0.00 |
Key Features
- In addition to loans, you’ll have access to credit building and rewards tools such as cash back cards and checking accounts with reward systems integrated.
- Get $200 when you open a rewards checking account and make 3 debit card payments (as long as you receive the loan)
What I Like & Dislike
Like
- Solid offering of high principal amounts, low interest rates, and uncommonly low 2-year durations on high-amount loans
- Only difference from Prosper is the use of hard inquiries
- Excellent customer service that’s hard to find in unsecured loans
- Get $200 when you open a rewards checking account and make 3 debit card payments (as long as you receive the loan)
Dislike
- Upgrade could be more transparent about its approval process and estimated APR by credit score
- The origination fee could be lower
Upstart
Best for Fast, Large Loans ($50k)
My Take
Upstart offers up to $50k loans at sub-36% APR over minimum 3 years, but the real kicker is they disburse in one day. If you want to start building credit ASAP, Upstart is a good choice for you.
Our rating: 9.35 / 10
Max Principal: $50,000
Highest APR: 35.99%
The Details
| Max Principal | $50,000 |
| Min Principal | $1,000 |
| Duration High (mnths) | 60 |
| Duration Low (mnths) | 36 |
| Credit Check | Hard Inquiry |
| Customer Service | Excellent |
| APR High | 35.99% |
| APR Low | 6.50% |
| Origination Fee | 6.95% |
| Other fees | $0.00 |
Key Features
- Super-fast next-day disbursement of funds guaranteed.
What I Like & Dislike
Like
- Strong blend of principal, APR, and minimum duration make Upstart a strong contender for your business
- Guaranteed next-day funding is un paralleled by other big loan lenders
Dislike
- Not suitable for borrowers who want less than $1k in funding
- Not suitable if you want a loan duration less than 3 years
- The origination fee could be lower
Kikoff
Best Credit Line for the Lazy Ones
My Take
Kikoff is a slight twist on credit building. It’s a $750 line of credit (similar to a credit card) that you can use for purchases within the Kikoff store (mainly e-books on personal finance) that cost $10. Before you sigh, $10 is good. It will keep your credit utilization down, which is a key metric for your FICO score. Basically, you’ll pay $5 for Kikoff to hold your hand and walk you through building your score.
Our rating: 9.25 / 10
Max Principal: $750
Highest APR: 0% ($5/mnth flat fee)
The Details
| Max Principal | $750 |
| Min Principal | $0 |
| Duration High (mnths) | 1 |
| Duration Low (mnths) | 1 |
| Credit Check | Soft Inquiry |
| Customer Service | Excellent |
| APR High | 0% |
| APR Low | 0% |
| Origination Fee | 0.00 |
| Other fees | $5/month |
Key Features
- Internalized process for getting approval, making purchases, paying off, and building credit. Kikoff holds your hand to help you build credit.
What I Like & Dislike
Like
- Plug-and-play credit building solution
- Hand-holding through the whole process
- Protects you from hurting your score due to high credit utilization — something a normal loan cannot do
Dislike
- Small offering of products in the Kikoff store
- Credit line limited to store, making Kikoff unsuitable for those who want upfront money to make purchases
MoneyLion
Best for Partial Upfront
No list of credit builder loans is complete without MoneyLion. It provides fixed $1,000 credit builder loans and holds a portion in savings, distributing the rest upfront. The duration is 12 months and APRs are capped at 29.99% but can go as low as 5.99%. MoneyLion only runs a soft check and has no origination fee. Instead, it requires a $19.99 monthly membership fee that provides access to 7 money management tools including a cash-advance checking account and investment account. If you want a credit builder with partial money upfront and can benefit from MoneyLion’s other products, then it’s the right choice for you.
- Structure: Partial Upfront
- Rating: 9.25 / 10
- Max principal: $1,000
- Highest APR: 29.99%
The Details
| Max Principal | $1,000 |
| Min Principal | $1,000 |
| Duration High (mnths) | 12 |
| Duration Low (mnths) | 12 |
| Credit Check | Soft Inquiry |
| Customer Service | Excellent |
| APR High | 29.99% |
| APR Low | 5.99% |
| Origination Fee | 0.00 |
| Other fees | $19.99 membership to MoneyLion |
Key Features
- Membership includes checking, investing, cash advances, crypto, and budgeting, which is well worth the $19.99 in savings. Plus MoneyLion has excellent customer service that traditional banks cannot provide.
What I like & Dislike
Like
- Credit builder is a great solution for those who want a small principal value over a short 12 month period
- Partial money upfront puts money in your hand from day 1 while providing the advantages of a traditional savings-based credit builder
Dislike
- At $19.99, the monthly membership may be too high for those who only want the credit builder loan and not the full set of services
- Not suitable for those who want larger, long-term loans
Navy Federal Credit Union
Best Interest Rate
Navy Federal Credit Union, like all credit unions, is only available to certain people, in this case current and former US Military personnel and department of defense employees. This exclusivity is why we rank NFCU midway through the list, despite APR rates as low as 2.45%. Yes, you read that right.
How does it work? NFCU provides secured loans against certificates of deposit (think high-yield savings accounts that you can’t pull money from), so you can get great rates due to the collateral.
- Structure: Certificate Pledge Loan
- Rating: 9.20 / 10
- Max principal: $50,000
- Highest APR: 6.25%
The Details
| Max Principal | Unlimited |
| Min Principal | $1,000 |
| Duration High (mnths) | 84 |
| Duration Low (mnths) | 36 |
| Credit Check | None |
| Customer Service | Good |
| APR High | 6.25% |
| APR Low | 2.45% |
| Origination Fee | 1% |
| Other fees | $0.00 |
Key Features
- NFCU’s Certificate Pledged Loans can go as high as the value of your certificate of deposit.
- APR rates are very favorable, starting from 2.45% and capping at 6.25%, depending on the rate your CD gets (formula is CD rate + 2%).
What I like & Dislike
Like
- Very favorable APR
- Good reputation and customer service for a credit union
- Low 1% origination fee
- If you don’t have a CD with NFCU now, think about investing in one as part of your planning strategy
Dislike
- Limited to military personnel, their families, and department of defense employees
- Minimum duration of 3 years is not suitable for some borrowers
- Obviously, this loan is only useful for existing NFCU members with CDs, which few visitors have
Dreamspring
Best for Small Loan ($250)
Dreamspring is a non-profit that provides $200 loans with 0% APR to entrepreneurs who need to build their credit, and it targets sub-600 credit scores in particular. Though called a “credit builder” by Dreamspring, this money is provided upfront — you just need to pay $10 in processing. The duration is a short 6 months, making Dreamspring the only option on our list to provide super short-term credit building to everyone (Metro Credit Union & Southwest Financial have 6 month loans as well, but they’re restricted to members).
- Structure: Personal Loan
- Rating: 9.10 / 10
- Max principal: $200
- Highest APR: 0.00%
The Details
| Max Principal | $200 |
| Min Principal | $200 |
| Duration High (mnths) | 6 |
| Duration Low (mnths) | 6 |
| Credit Check | Hard Inquiry |
| Customer Service | Average |
| APR High | 0% |
| APR Low | 0% |
| Origination Fee | 0.00 |
| Other fees | $10 Processing |
Key Features
- Low $200 loan over short 6 month period at 0% APR — just pay a $10 processing fee.
What I like & Dislike
Like
- Only non-profit on our list, which means its structured to provide you quality products
- Unbeatable, predictable terms for sub-600 credit score building
- The processing fee translates to 9.94% APR, which is lower than half the others on this list
Dislike
- Not available to residents of California, Georgia, Nevada, New Mexico, New York, and Ohio
- Restricted to entrepreneurs
Republic Bank
Best Low-Interest Mid-Size Loan ($10k)
With “low APR” and “bank” in the name, Republic catches the eye. It provides an unsecured loan with max $10k for a period of 1 – 3 years and has strong customer service ratings.
Note, Republic charges a flat $199 processing fee up front. That may seem high, but it’s included in the competitive 12.53% APR. Without the processing fee, the APR would be only 8.97% on a 1-year loan.
This offer is a good choice for those who want low-interest mid-size loans over a few years.
- Structure: Personal Loan
- Rating: 9.00 / 10
- Max principal: $10,000
- Highest APR: 12.53%
The Details
| Max Principal | $10,000 |
| Min Principal | $0 |
| Duration High (mnths) | 36 |
| Duration Low (mnths) | 12 |
| Credit Check | Hard Inquiry |
| Customer Service | Good |
| APR High | 12.53% |
| APR Low | 12.53% |
| Origination Fee | 0% |
| Other fees | $199 Processing |
Key Features
- Very low APR for a bank.
- 199% processing fee (included in APR).
What I like & Dislike
Like
- Strong APR for a bank
- Good candidate for mid-sized loan over 3 years
Dislike
- Requires a hard check
- May be difficult to get approval due to low rate
Metro Credit Union
Best for Low APR (Massachusetts & New Hampshire Residents)
Metro Credit Union offers a loan similar to Navy Federal Credit Union. You can use your CD with Metro Credit as collateral to benefit from 3% APR on a loan of minimum $500, payable from 6 months to 5 years. There’s no origination or application fee. The catch? You need to live in Massachusetts or New Hampshire in one of the counties shown below.
- Structure: Certificate Plege Loan
- Rating: 8.90 / 10
- Max principal: $25,000
- Highest APR: 3.00%
The Details
| Max Principal | $25,000 |
| Min Principal | $500 |
| Duration High (mnths) | 60 |
| Duration Low (mnths) | 6 |
| Credit Check | Hard Inquiry |
| Customer Service | Good |
| APR High | 3% |
| APR Low | 3% |
| Origination Fee | 0.00 |
| Other fees | 0.00 |
Key Features
- Low 3% APR rate made possible with CD collateral held with Metro Credit.
What I like & Dislike
Like
- Super low APR rate
- Large 6 – 60 month duration flexibility
- When you already have a CD, requires no change in daily activity from your side
Dislike
- Limited to Massachusetts and New Hampshire residents
Southwest Financial Credit Union
Best 6-Month Loan with Half-Upfront
Southwest Financial Credit Union provides a 50/50 credit loan, with half up front and half at loan maturity. The loan is maximum 6 months and capped at $1k, making it a great choice for those who want a small 6-month loan, are willing to pay a bit more in APR, and are eligible.
To be eligible, you have to work with one of these companies, which are mostly based in Texas: Kroger, AC Horn, Alphagraphics, America’s Beverage, Digestive Health, Greystar, Kirby Inland Marine, JGM, Penske, Railworks, Santander, Southstar, Texas Pipe & Supply, and Vandervoort Dairy.
- Structure: Partial Upfront
- Rating: 8.50 / 10
- Max principal: $1,000
- Highest APR: 28.00%
The Details
| Max Principal | $1,000 |
| Min Principal | $20 |
| Duration High (mnths) | 6 |
| Duration Low (mnths) | 1 |
| Credit Check | Hard Inquiry |
| Customer Service | Average |
| APR High | 28% |
| APR Low | 9.99% |
| Origination Fee | 20.00 |
| Other fees | 0.00 |
Key Features
- Uncommon 6-month duration credit builder loan with half up front and half at maturity, providing a blend of funding to support you now and ensure savings for your future.
What I like & Dislike
Like
- Niche loan for 6 months and $1k
- No origination fees
Dislike
- Limited to employees of select Texas companies
FAQ
Frequently Asked Questions about Credit Builder Loans
What is a good credit builder?
A good credit builder is one with below average APR, minimum duration of 1 year, and an amount at least 10% of any past delinquent payments. For example, and APR below 16%, 1+ years in length, and $100 would be good for you if you have delinquent payments on $1,000 past loans.
Are credit builders worth it?
If you want to improve your credit, then credit building options aren’t just worth it, they’re necessary. You must show your ability to make regular payments on time, keep your utilization rate under 30%, and take different types of credit. To be clear, we’re not advocating your hire a professional “credit builder.” Instead, consider getting a secured card and a loan from this list.
How much do credit builder loans help?
The Consumer Financial Protection Bureau performed a study that confirmed credit builder loans 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.
How can I build my credit line fast?
There is no way to build your credit overnight. That said, if you have a low score and only a few delinquent items on your report, you can boost your credit in a matter of months. The more lines of credit you get and loans you consistently pay down, the faster and higher it will grow. It’s a balancing act because you shouldn’t bite off more than you can chew but you don’t want to be too conservative and have limited positive history.
How much does credit builder cost?
The average APR on our list is 10.55% and the average additional fees for those that have them is $125.
Can you be denied for a credit builder loan?
Yes, you can be denied for a credit builder loan. Some lenders, such as Kikoff, don’t run any check and provide instant approval, but these are few and far between.
Remember, the lower your credit, the higher the rates. You can only counteract those rates by providing collateral — either by blocking the money in saving, paying a monthly fee, or offering up an asset like your house or car.
The safest bet is either taking higher rates or blocking the money in savings. Our list only includes these kinds of loans.
Summary
Nobody likes debt, but when your credit is low you might have to go with a credit builder. This list has shown 10 different options, each with a “best for” mention. Here’s a summary table:
| Lender | Best for… |
|---|---|
| Prosper | Best Overall |
| Upgrade | Best for Suite of Services (Loans, Cards. Accounts) |
| Upstart | Best for Fast, Large Loans ($50k) |
| Kikoff | Best Credit Line for the Lazy Ones |
| MoneyLion | Best Partial Upfront |
| Navy Federal Credit Union | Best Interest Rate |
| Dreamspring | Best for Small Loan ($250) |
| Republic Bank | Best Low-Interest Mid-Size Loan ($10k) |
| Metro Credit Union | Best Low-APR Loan for MA and NH Residents |
| Southwest Financial Credit Union | Best 6-Month Loan with Half Upfront |
Conclusion
There’s a lot to consider when choosing a loan to build your credit, especially when you want the money up front. But with creativity, a little investigation, and some effort, you can get approved, make payments, and start the journey to an awesome FICO score.
To read more content like this, check out our personal finance page.
