Self review: Low-cost credit-building loans
Rating as of based on a review of services January 30, 2023.
A Self Credit Builder Account can help you boost your credit score and your savings with on-time monthly payments. This credit-builder loan does not require credit to qualify and gives you the money you’ve paid at the end of your term.
- Aspiring homebuyers
- Building savings
If you’ve ever been denied credit, you know how frustrating it can be to feel like you need what you can’t have. Building credit takes time, especially if you’re building it from scratch or working to fix your score after a mistake. What if you could speed up the process safely?
That’s where Self credit-building loans come in handy. These nontraditional loans help you add payment history to your credit report by essentially letting you make payments to yourself and reporting this activity to the major credit bureaus. They don’t require credit to qualify and you can choose from one of four payment plans.
The accompanying Self app is also easy to use. In this Self review, we’ll cover how Self Credit Builder Accounts can help you build credit and who might be a good fit for this product.
What is Self?
Based in Austin, Texas, Self Financial (formerly known as Self Lender), was founded in 2015 with the goal of helping consumers improve their credit. While most lenders only offer loans to those with great credit and reserve the best rates for those with the best credit, Self levels the playing field by offering affordable loans to customers who don’t have a strong credit history.
Self’s monthly payments start as low as $25 a month. Simply pay your loan on time each month and, at the end of a 24-month period, the money will be yours, minus a finance charge that includes interest and an administrative fee. Best of all, each on-time payment is reported to all three credit bureaus to give you even more lending options.
With Self, your terms are determined by the amount of your monthly repayment. Pay a higher amount and you’ll have only 12 months to repay in exchange for having your loan in hand faster. A lower monthly payment gives you 24 months, but you’ll have to wait two years to get your loan funds. But you’ll only have to pay $48 a month to qualify for a 12-month loan.
Pros & cons
- Flexible credit requirements — Self is designed to help consumers improve their credit, so you can qualify even if other lenders have turned you down.
- Low monthly payments — You’ll only have to pay the monthly amount you’ve chosen, which can be as low as $25, with interest taken out of the money you’ve saved.
- Early payoff options — If you want access to your funds early, you can choose to cash out and get the amount you’ve already paid, minus interest and fees.
- Helpful resources — Self offers plenty of educational materials to help you learn how credit works.
- Fee for debit card payments — You can pay by ACH or debit card, but debit card transactions will incur a fee of between $1.20 and $4.75 each time depending on your payment plan.
- Negative reporting for late payments — Self reports activity to all three credit bureaus, so late payments will hurt your score.
How does Self work?
The Self Credit Builder Account is a credit-builder loan that lets you borrow money even if you have little to no credit history. There is no hard credit pull required to apply and you can start working on your credit right away. However, unlike traditional loans that pay you the money right away, Self does not give you your loan until you’ve made all your payments. So basically, you’re just saving the money instead of borrowing it.
After you apply and are approved, Self deposits the money you intend to borrow into a certificate of deposit (CD) with an FDIC-insured partner bank. This is held in your name until your Credit Builder Account has reached the end of its term, which can be either 12 or 24 months. At this time, the CD matures and your loan should be paid off if you’ve been making your regular payments. At the end of the term, you’ll get the money minus fees and interest.
Your payment history while repaying your loan is reported to all three credit bureaus. With each monthly payment you make by the due date, you’ll be taking steps to improve your credit.
You can choose from four different repayment terms:
- 24-month loan with a monthly payment of $25 and a payout of $520
- 24-month loan with a monthly payment of $35 and a payout of $724
- 12-month loan with a monthly payment of $48 and a payout of $539
- 12-month loan with a monthly payment of $150 and a payout of $1,663
How to get started
To set up an account, go to the Self website and click “Start building today” or download the Self app. Then, enter your email address and click “Join Self.”
You’ll be prompted to provide your first and last name on the next screen.
Then, set up a password and provide a mobile phone number. You’ll also need to enter your street address.
The next step is to verify your identity by providing your Social Security number and birthdate. Self doesn’t pull your credit report to approve you for an account, but you will need to confirm that you are who you say you are. This allows them to report your payments and help you build credit.
Now you choose how much you want to pay each month. You’ll pay a one-time $9 administrative fee to activate your account after signing up. In the second month, you’ll start making payments. You can move the slider to adjust the amount, but $25 is the minimum and $150 is the maximum. Your term will be 24 months if you choose $25 or $35 payments and 12 months if you choose $48 or $150 payments.
At the bottom of that screen, you’ll get details on the interest rate you’re paying on that monthly contribution. At $25 per month, I’d pay interest at a rate of 14.14% with an APR of 15.92%. The finance charge of $89 includes both the interest and that $9 administrative fee.
Next, you’ll be asked to accept the electronic disclosure.
Once you’ve done that, Self will verify your identity and create your account.
After that, you’ll have access to a dashboard that shows you updated information about your Self Credit Builder Account. You can see from the main screen where your credit score currently stands along with your remaining loan payments.
The interface can help motivate you to keep making your payments on time by showing you your progress.
Read more: Credit score calculator: Get your estimated credit score range
What does Self cost?
There is a $9 one-time administrative fee for all Self Credit Builder Accounts, which is non-refundable. You’ll pay this when activating your account. After that, you’ll choose your monthly payment amount, which can be between $25 to $150. Your monthly payment determines how much money you receive, the length of your term, and what you’ll pay in interest.
Self charges an interest rate between 12.44% and 14.87% and an APR between 15.65% and 15.97%. The exact APR and interest rate depends on which monthly commitment you make. Interest is deducted from your final payment or subtracted from the money you receive at the end of your loan term.
Interest rates, APRs, and fees vary depending on which term you choose. Here’s a breakdown of the charges and the total amount you’ll pay for each term:
- $25 monthly payment (24 months): 14.14% interest rate/15.92% APR, $89 finance charge, $600 total
- $35 monthly payment (24 months): 14.70% interest rate/15.97% APR, $125 finance charge, $840 total
- $48 monthly payment (12 months): 12.44% interest rate/15.65% APR, $46 finance charge, $576 total
- $150 monthly payment (12 months): 14.87% interest rate/15.91% APR, $146 finance charge, $1,800 total
To give you an example of what this looks like, if you pay $25 a month, you’ll receive $520 after 24 months. With an APR of 15.92%, you’ll pay $600 in total.
There are plenty of credit-building loan options out there. Here are a few features that make Self stand out from the rest.
Lower interest rate
Although Self charges a one-time administrative fee, it’s relatively low at only $9. Your interest rate is lower than some competitors, though, capping out at less than 16% APR. Some competitors charge 30% APR for poor credit loans. The cost savings can help you quickly recoup that $9.
The tough thing about trying to build your credit is that lenders check credit in different ways. Self reports your on-time monthly payments to all three credit bureaus to help you cover all your bases. Mortgage lenders, for instance, will pull a report from all three credit bureaus, then merge the information together to decide which score they’ll use.
Read more: How long does it take to build credit from scratch?
Early account payoff
Eager to get your loan money? You can pay off your account early to get your funds. However, in doing so, you’ll lose one of the biggest benefits of a credit-builder account. Once your loan is paid in full, Self won’t have any monthly payments to report for you so you won’t add as much history to your credit.
But if you saw enough of a bump in your credit score that you’re happy and you’re ready to settle up, it’s nice to have that option.
Relaxed qualification requirements
If you’re seeking a credit-builder loan, chances are your credit isn’t where you want it to be. While Self will run a soft credit check on you before approving your loan, they’re more lenient than other lenders. They understand that their borrowers are interested in improving their credit, so they accept people with poor credit or no credit history at all.
Easy application process
The application is surprisingly easy, as long as you have a bank account or debit card. You’ll just need to input some basic information, verify your identity, and choose your payment plan. Then you’ll start making monthly payments and receive the money in a year or two.
Self Visa® Credit Card
Once you’ve made three on-time monthly payments on your Self loan and saved at least $100, you can qualify for the Self Visa® Credit Card. This is a secured credit card, meaning it requires a security deposit as collateral. The amount you deposit becomes your credit limit.
With a Credit Builder Account, your loan progress (referred to as “savings”) can be used as security. So if you’ve paid $100 to date, you’ll have a $100 credit line on your card. This card can help you continue building credit and offer more spending freedom.
Who is Self best for?
A credit-builder loan with Self can help a lot of different types of people out. Here are a few good fits for this product.
Credit-building loans are designed for improving your credit score. If your score is in a good enough range to qualify for a traditional personal loan, and you need the money now, you may be better off choosing one of these.
If you’re new to credit, you can build a solid credit score in a matter of months by paying your bills on time. But if you’ve damaged your credit, it can take a little longer through the traditional route, which is where a credit-building loan can come in handy.
Credit card seekers
If you need a credit card, a Self Credit Builder Account can help you get one. Although you’ll only be able to charge the amount you’ve saved, this is better than nothing, especially if you haven’t been able to qualify for another credit card. And the more your credit improves, the closer you’ll be to getting approved for an unsecured credit card if that’s what you want.
Read more: Best unsecured credit cards for bad credit
Those on limited budgets
Self lets you make payments as low as $25 and deducts the interest from the loan amount. So you’ll have 12 to 24 months (depending on your term choice) to pay only $25 in exchange for a financial payout, minus interest and a $9 fee. If you have limited cash to work with but want to make progress on your credit, you can save a lot of money choosing Self.
Self’s services are provided completely online and through the app, with no local branches to visit. If you’re comfortable using online lenders, this is a great option. You’ll be able to set up ACH to make your monthly payments automatic and only log into your account when you want to check on the status of your loan. At the end of the term, the funds will be deposited in your account. No visits to a brick-and-mortar bank are required.
Who shouldn’t use Self?
If you match any of these descriptions, you might be better suited to a different credit-building option.
Frequent late payers
The very thing that makes Self a valuable credit-building tool can also work against you. Self reports your payments to all three credit bureaus, for better or worse. If you aren’t sure you’ll be able to pay on time each month, a credit-building account can be a risky choice. But you can set things up so that your loan is automatically paid each month.
Those who need money now
Credit-building loans are great for strengthening your credit score, but they also make you wait for your money. Unlike traditional loans that send your funds in as little as one business day and then require payments, credit-building loans basically help you save your money and then hand over what you’ve saved (minus interest) at the end of the term. In the case of Self, you won’t get your funds until at least one full year of payments has passed.
If you’re short on cash and need help now, consider a traditional loan or cash advance and steer clear of payday loans.
Self vs. competitors
Self Credible Bad Credit Loans
Loan amount $520 to $1663 $600 to $100,000 Up to $10,000
Repayment terms 12 to 24 months 12 to 84 months
90 days to 72 months
Turnaround time 12 to 24 months Varies, but usually within a week As soon as next business day
If your credit gets you turned down for personal loans but you don’t think a Self Credit Builder Account is right either, you have other options. Here are a couple of lenders that help low-credit borrowers get personal loans.
Credible is a marketplace where you can shop multiple lenders at once and filter your search for your credit score and borrowing needs. APRs range from 5.40% to 35.99%, but you can improve your chances at a better rate by signing up for a shorter repayment term. And if you find a better personal loan rate somewhere else, Credible will give you $200.
Credible makes it easy and fast to receive personalized quotes for loans from a variety of lenders. You can check your rates without affecting your credit or paying a fee, then apply through the platform if you find an offer you like.
Credible might not be a good fit if your credit is in poor shape as you won’t have many options to choose from and will likely be stuck with very high interest rates. Self can be cheaper for those starting from scratch but does not give you your money until your term is up and won’t let you borrow as much as a traditional loan.Credible Credit Disclosure - To check the rates and terms you qualify for, Credible or our partner lender(s) conduct a soft credit pull that will not affect your credit score. However, when you apply for credit, your full credit report from one or more consumer reporting agencies will be requested, which is considered a hard credit pull and will affect your credit.
Bad Credit Loans
Like Credible, Bad Credit Loans isn’t a credit-building loan. Instead, the site presents your loan request to multiple lenders and pulls quotes for the ones you prequalify for. You aren’t obligated to apply for anything, so you can shop to see what’s available. Bad Credit Loans specializes in helping borrowers with less-than-stellar credit scores, so it can give you more options than you’d have with a traditional loan aggregator.
Unfortunately, poor credit loans always have sky-high interest rates. So you can qualify for them, but you’ll pay for it. Still, you’ll have money in hand from the start, which gives this an edge over Self, and you can request loans of up to $10,000. Just note that you’ll limit your options by choosing higher loan amounts.
A Self Credit Builder Account can help you improve your credit in as little as a few months with a credit-building loan for 12 or 24 months. By paying at least $25 a month, you can add payment history to your credit report to boost your creditworthiness and improve your chances of qualifying for credit in the future.
With relatively low interest rates and minimal fees, Self offers a good alternative to traditional loans for borrowers with lower credit scores.
Self Financial compensates us when you sign up for Self Financial using the links provided.
All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or Atlantic Capital Bank, N.A. Member FDIC, Equal Housing Lender. Subject to ID Verification. Individual borrowers must be a U.S. Citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number are required. All loans are subject to ID verification and consumer report review and approval. Results are not guaranteed. Improvement in your credit score is dependent on your specific situation and financial behavior. Failure to make monthly minimum payments by the payment due date each month may result in delinquent payment reporting to credit bureaus which may negatively impact your credit score. This product will not remove negative credit history from your credit report. All loans subject to approval. All Certificates of Deposit (CD) are deposited in Lead Banks, Member FDIC, Sunrise Banks, N.A., Member FDIC or Atlantic Capital Bank, N.A., Member FDIC.