Credit Builder Loan Questions

[raisemysc0re]

My niece is just starting out. No bad credit but very thin file.

She has 1 credit card and I recently made her an AU on my oldest card (not reporting yet).

I would like to get her a 36-48 month loan that she can pay off almost all of it right away and not have to make payments until near the end of the loan.

This way she would get the benefit of a low utilization, better mixed credit and could start thickening up her file.

Where would the best place be to get this type of loan?

[FicoMike0]

A share secured loan, ssl, would fill the bill. Keep in mind, it only helps if you have no other installment loan. As soon as she takes out a student of auto loan, it quits working. The only places I know of that offer them are navy federal, who are famous for them, and penfed. The main points are,

1. You deposit the amount of the loan in a savings account
2. You borrow your own money back, at about 2% interest
3. Prepay 91% of the loan, leaving a 9% balance,
4. with no payments due for 91% if the original loan term
5. There is no hard credit inquiry

Point 4 is the trick, most lenders will accelerate the term when you prepay. Navy requires some connection to the military(family works), anyone can join penfed. You can find a lot about the navy ssl, most common is a $3000+ loan for 60 months. Everyone loves navy.

I did the penfed. They don't advertise the ssl, you have to call and ask. They will do a loan for $25 X the term in months, up to 142 months. I did $2100 for 84 months. I presently owe them $184 with no payment due until 2030. I got 30-40 points on fico8&9. 

If she decides on penfed, post and I'll give you the step by step, it's a little tricky.

[Patient957]

PenFed SSL. 

They don't list it on the website; you have to call to get it, after joining of course.

[FicoMike0]

Everyone loves navy, but penfed worked for me. Half the upfront money. No explanation needed as to why I wanted a seven year term. A little tricky, but we know the tricks.