WHAT IS A CREDIT BUILDER LOAN?
A credit builder loan holds the amount borrowed in a bank account while you make payments, building credit. When the loan is paid off, the money is released to you.
With an EFCU Credit Builder Loan, you can request to borrow between $500.00-$1,000.00 with a term up to 12-months. The funds are deposited into your primary EFCU savings account, and all funds are kept on hold until the loan is paid off in full. This will help build your credit if you do not have the funds available to do a Share or CD Secured loan. Our current rate on a Credit Builder Loan is 5.00% APR*.
OTHER TYPES OF CREDIT BUILDER LOANS
Share Secured Loan
With a Share Secured Loan, you can request a loan using the funds in your shares/savings account as collateral. The loan is 100% secured by your funds so you can borrow up to what is available in your shares/savings account at 4.00% APR with a term up to 48 months. A hold will be placed on the shares/savings account for the amount of the loan and funds will be released as you pay the loan down.
CD Secured Loan
With a CD Secured Loan, you can request a loan using the funds in a certificate of deposit (CD) as collateral. The loan is 100% secured by your funds so you can borrow up to what is available in your CD at a rate of 3.00% APR higher than the APR of the CD securing the loan. A pledge will be placed on the CD for the amount of the loan and funds will be released as you pay the loan down. Loan balance is due and payable upon maturity of the CD unless the CD is renewed for the same term.
Share Secured Visa Credit Card
With a Share Secured Visa Credit Card, you can request a Visa credit card using the funds available in your shares/savings account. Your credit card limit will be the same as the hold placed on your shares/savings account. The hold will remain on the account until the credit card is paid off and closed or until the member qualifies for the card to no longer be secured. Our Visa Credit Card rate is currently at 11.90% APR.
Call and ask to speak with a loan officer if you would like to apply for a Credit Builder Loan or you can apply online through Digital or Mobile Banking.
*Membership at Electrical Credit Union is required to participate. Advertised rates are subject to change without notice. Must be 18 years of age to qualify for a loan.
*Example: Loan of $1,000.00 at 5.00% APR and a term of 12 months, would have a minimum monthly payment of $86.00 with a total estimated finance charge of $26.97.
*APR= Annual Percentage Rate
