Looking for ways to build your credit?
A major consideration in calculating your credit score is your payment history and the Civic Credit Builder Loan may be just right for your credit building needs. Below are some commonly asked questions we get about our Credit Builder Loan:
1. How does a Credit Builder Loan work?
When you open a Credit Builder Loan with Civic, we will pre-fund your Select Savings Account with an amount between $500 - $2,000. As you make on-time payments, we will report your positive payment activity to the Equifax and TransUnion credit bureaus. Once the loan is paid off, you'll have improved your credit standing and jumpstarted your savings.
2. How much can I borrow with a Credit Builder Loan?
Civic has a range of loan amounts according to your credit needs and ability to make payments. Amounts from $500 to $2,000 are available.
3. How long does applying for the Credit Builder Loan take?
Civic processes all loan applications as soon as possible and usually have an answer within 1 to 2 business days.
4. What are the term options and loan rates for a Credit Builder Loan?
There are two term options based on the amount you choose to borrow:
- Loans from $500 to $1,000 have a maximum term of 12 months.
- Loans from $1,001 to $2,000 have a maximum term of 24 months.
The interest rate is fixed at 4% plus the dividend rate on the Select Savings Account.
5. When will I have access to my Credit Builder Loan funds?
The loan proceeds will be deposited into your Select Savings Account and placed on hold as collateral for the loan. When the loan is paid in full, you will have access to the funds.
6. What is the process if I default on my Credit Builder Loan?
Failure to meet your monthly payment obligations would cause you to be in “Default.” If the Default continues for twenty-five (25) days, we will demand immediate payment of all amounts that you owe by taking funds from your Select Savings Account to repay your loan.
Looking for other options for building credit with Civic Federal Credit Union?
Disclaimer: You + Money blog posts are provided for informational purposes only and are not intended to replace the advice of a financial, legal or accounting advisor.
