SeedFi, an online lender that specializes in helping consumers build credit, no longer accepts new applications for its Borrow & Grow personal loans. The lender will continue to service existing loans.
SeedFi’s Borrow & Grow plan was a personal loan and credit-builder loan in one. The plan allowed borrowers to use part of the loan proceeds right away while the rest of the funds sat in a savings account that borrowers could access once the loan was paid in full.
It was an ideal option for fair- and bad-credit borrowers (with scores below 690) who needed to cover an emergency expense but wanted to build credit and savings at the same time.
Financial software company Intuit announced in December 2022 that it would acquire SeedFi. By January 2023, CEO Jim McGinley told TBT in an email that SeedFi would no longer provide personal loans.
Alternatives to SeedFi’s Borrow & Grow personal loan
The Borrow & Grow plan was an uncommon offering, but you can still find a personal loan to help cover large, one-time expenses as well as small emergencies. If your goal is only to build credit, consider a credit-builder loan.
Online personal loans
Some online lenders look for borrowers with strong credit and high incomes, while others provide personal loans to consumers with low credit scores and/or incomes. Look for a lender that reports payments to all three major credit bureaus and caps annual percentage rates at or below 36%, which is the highest APR consumer advocates say an affordable loan can have.
These lenders offer personal loans to borrowers with fair or poor credit.
Universal Credit is operated by online lender Upgrade. The lenders offer similar personal loans to consumers with low credit scores, but Universal Credit’s borrowing standards may be softer and its rates are higher. Universal Credit is a good choice for borrowing money and building credit because the lender provides access to credit-building tools, like credit monitoring and educational materials about credit.
OneMain does not have a minimum credit score requirement. Instead, the lender uses an algorithm that takes many factors into account to determine whether a borrower qualifies. OneMain requires sufficient income to make a personal loan’s monthly payment and says borrowers’ average credit scores are in the low- to mid-600s. OneMain’s rates are high compared with those of other lenders, but borrowers may get a lower rate with a joint or secured loan.
Upstart uses artificial intelligence and nontraditional data, like college education and job history, to qualify borrowers. The lender has no minimum credit score but requires at least $12,000 in annual income. Upstart’s personal loans don’t come with additional perks like rate discounts or credit-building assistance. Loans are from $1,000 to $50,000 with three- or five-year repayment terms.
See if you pre-qualify for a personal loan – without affecting your credit score
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Credit union personal loans
A credit union personal loan may be a good choice for existing members with less-than-perfect credit because credit unions may consider membership history, in addition to credit and income, when reviewing a loan application. Federal credit unions cap APRs at 18%, and some provide payday alternative loans, which are small-dollar loans with rates capped at 28%.
These credit unions don’t require good credit to qualify.
Alliant offers fast personal loans and has broad membership requirements, but you must be a member for at least six months before applying. Same-day funding may be available, and Alliant offers 24/7 customer service.
Navy Federal provides flexible personal loans with fast funding. This credit union serves primarily military members and their families as well as Department of Defense employees. Navy Federal doesn’t disclose its minimum credit score requirements and says it works with its members to find the best financing option.
Credit-builder loans don’t require good credit, but borrowers can’t use the funds right away. If you’re approved, your loan stays in a bank account while you make payments. The lender reports payments to the three major credit bureaus, meaning on-time payments build your credit. You can access the funds once you’ve repaid the loan.
You can get a credit-builder loan at credit unions and community banks, from online lenders and through lending circles.
These lenders provide credit-builder loans.
SeedFi will continue to provide its Credit Builder Prime product, McGinley said in an email. This is a no-fee line of credit that allows borrowers to make payments as low as $10 every other week. Once you pay $500, SeedFi moves the money into a savings account you can access. Unlike with a typical installment credit-builder loan, you continue to pay toward the credit line and access more savings every time you reach $500.
Self is an online lender whose main borrowing requirement is that you don’t have a negative ChexSystems report, which can be caused by things like bounced checks or unpaid fees, for the past 180 days. Credit-builder loans from Self are held in a certificate of deposit account as you make monthly loan payments between $25 and $150. Self charges a $9 administrative fee, and maximum APRs are about 16%.
How to compare personal loans
Here are a few important features to compare between personal loan lenders.
Borrowing requirements: Some lenders publish their borrowing requirements, which can include a minimum credit score, minimum income and maximum debt-to-income ratio. This information can sometimes be found on a lender’s website in the FAQ section. Websites like TBT also gather this information from lenders to write personal loan reviews.
APR: A loan’s APR represents its full cost, including interest and fees. APR provides an apples-to-apples comparison between lenders and financial products, like credit cards. When considering multiple financing options, look for the one with the lowest APR.
Monthly payment: Before you get a personal loan, be sure the monthly payments will fit into your budget. Use a personal loan calculator to see how the loan amount, rate and repayment term affect the monthly payment.
Pre-qualification: Many lenders allow you to pre-qualify for a personal loan with a soft credit check. This lets you see your potential loan amount, rate, repayment term and monthly payment. Because there’s no hard credit check until you formally apply, you can review personal loan offers from multiple lenders to find one that fits your budget.
Origination fee: An origination fee is a percentage of the loan amount — usually 1% to 10% — that a lender takes from the loan before sending it to you. Online lenders who work with fair- and bad-credit borrowers charge this fee most often, but good- and excellent-credit borrowers can also encounter it. If you’re charged an origination fee, review how much it will reduce your loan amount by.
Other features: Compare other personal loan features like fast funding, credit-building assistance and flexible repayment terms. None of these features will outweigh a low rate and affordable monthly payments, but they can help you choose between competing offers.