Getting a loan or credit card is hard if you have no credit or bad credit. Even if you use a secured credit card, you’ll need to deposit money first. Lucky, Self, formerly, Self Lender, (a credit-builder loan) solves this problem by allowing you to boost your credit or restore bad credit. You need not have money first before you can do this.
Unlike other credit-builder loans that require money deposits, Self provides a platform that holds your payments in a certificate of deposit.
While building your credits or restoring bad credits, Self offers you a certificate of deposit at the end of the program. The Federal Deposit Insurance Corp insures this certificate of deposit for you. Upon completion of your payments, you will receive all your money.
The reviews of the Self (formerly Self Lender) explains how it works, how to open a Self account, and the benefits therein. From the reviews, you will also know the pros and cons of Self Lender and decide if it’s legit or a scam.
What is Self?
Self is a fin-tech firm that lets people build credit if they have no credit or wish to restore damaged credit. It usually involves a credit-builder account that is supported by the FDIC recognized financial institutions that they have a collaboration with.
On the other hand, a credit-builder account is a little loan that Self takes out on your behalf. Once this happens, the Self holds the loan by putting your money into a certificate of deposit instead of giving you the money.
A certificate of deposit is a certificate which a financial institution issues to someone. This certificate lasts for a certain period of time after that you are free to withdraw your funds with interest. Additionally, funds that a certificate of deposit covers carry a higher interest rate than savings accounts.
Self is unique such that each time you make an on-time payment, all three credit bureaus will receive a report on it. The credit bureaus include Equifax, Experian, and Transunion.
How does Self Lender work?
The moment you open a Self account, you’ll agree on the terms of service with the bank that Self matches you with. Afterward, you can start making payments on a monthly basis into the account. All the money in the account will be put into a certificate of deposit (CD).
Once you make all necessary payments, you will receive the money minus the finance charges. If you wish to close the account before the end of the term, you will have to get your money in the certificate of deposit excluding the amount you’re owing.
Self, on the other hand, offers customers one-and two-year terms based on what they want their payments every month to be. The lowest amount that the Self can pay you per month is $25. You’re free to choose payments ranging from $35, $48, or $150 each month.
The financial charges that you’ll have to pay various but the highest amount you can pay is $15. According to the Self, its APRs are not over 16%.
After making your payments, the Self will report your payments to three credit bureaus (Equifax, Experian, and Transunion). If you don’t have a FISCO score, all your returns will generate a FISCO score after about a period of six (6) months.
The Self process works like this:
|Monthly payment||How many months||Activation||Your total cost5||You get at the end6|
|$25/month||24 months||$12||$612||$525 plus CD interest|
|$48/month||12 months||$15||$591||$545 plus CD interest|
|$89/month||12 months||$15||$1083||$1000 plus CD interest|
|$150/month||12 months||$15||$815||$1700 plus CD interest|
How does Self work better than a Secured Card, Co-Signed Loan, or Prepaid Card?
There are other platforms where you can build credit or restore bad credits but it involves cards. They include secured cards, co-signed cards, and prepaid cards.
By using the secured card, you’ll enjoy the benefits that a Self offers. The same way you use a normal credit card is the same way you will use the secured card.
A secured card has an edge over the Self such that you can use the card as a credit card. However, you will be required to pay interest on the secured card and it can be higher than Self’s APR charges.
The only problem with a secured card is that you must have a fully funded savings account that will act as a security.
You can only get the card if you have money and you cannot take the money inside the account until you pay for the card or your bank releases the security line on your account.
On the other hand, you can build credits using a co-signer. By using this, you’ll have better terms but lower interest rates. For this to work, you’ll need a co-signer with credit that is ready to cosign for you.
If you fail to pay on time or default the loan plan, it will influence your co-signer’s credit and the person will have to pay the remaining balance of the loan.
Prepaid cards serve as a means by which you can improve your credit ratings. Although prepaid cards act like credit cards, you cannot build your credit history using them. You cannot spend more than the amount on your card too.
Self Lender Reviews: How do I open a Self account?
It will take you not up to eight minutes to open a Self account. Below are the requirements for opening a Self account:
- Customers must be at least eighteen (18) years of age.
- They must be a permanent resident of the United States and possess a valid US address.
- Consumers should possess a bank account or debit card or prepaid card.
- They must have a Social Security number, email address, and phone number.
While opening a Self account, you are required to provide a linked bank account so that money will be paid each month electronically. alternatively, you can use a debit card but it will attract a charge of $0.30 plus 2.99% of the amount of the money.
The Self Pros and Cons
From the customer reviews gathered, below are the pros and cons of the Self Lender app: