Question on Credit Builder loan

[Anonymous]

I checked with my current CU (Golden 1) and they do offer a credit builder loan.  Unfortunately they do not release funds as you pay.  They hold all the money until the loan is satisfied.  So I am looking at going with Alliant. 

I have just over $3000 in savings right now, but the majority of this is going to a family vacation in June.  So I would want to open the account and pay it down almost immediately with Alliant so they will release the funds again.  My question is, how hard is it to transfer money from the alliant savings back to my local cu? 

They way I understand it, I open the account with $10.00 donation. 

Set up the loan with alliant, Transfer $1000 from my local cu to Alliant for them to hold.

Set up auto payment.  Cancel autopayment before first payment is due, and then transfer another  $910 loan payment.

Loan balance is now $90.00 so alliant releases $910 x2 (1st 910 of my payment and 2nd 910 is from the security deposit) of my funds which I can now transfer back into my local cu. 

Loan balance is now $90.00 which I pay over the 60 month term.  (about $1.50 per month)

Am I correct on my understanding of this?  And is is simple to transfer funds back?

Thanks!

[Anonymous]

Read the thread below it will tell you how to set up the Alliant share secured loan and have the funds available immediately and maximize you scores. http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...

[Anonymous]

This wont answer your question but a suggestion as an alternative.

If you're looking to build credit through a loan, you could try SelfLender.

Its what Im using. You wont have to tie up such a big amount of money at once and can make monthly installments instead.

[Anonymous]

Is there a high interest rate?

[Anonymous]

It looks like its advertised at 12.65%

[Anonymous]

The Self Lender says the rate was 10.57%.  If I do the Alliant Credit Builder loan, I pay off 91% right away, so the interest is minimal, the funds I believe are released as you pay.  I do like that self lender doesn't require up front $, but if I pay it down to 9%, most of the funds should be released.  At least that is my understanding, and less interest than a self lender loan. 

Please correct me if I am wrong.  That is what I was hoping for in the beginning anyway, as I wasn't 100% clear from the credit builder thread.

[Anonymous]

The Alliant method is very valid and in theory should be easy to work. Here's the thing. If you need to make sure the money is not tied up or you don't want to go through all of the steps (which take a couple of weeks altogether), selflender is much easier and completely safe. You aren't tying any money up. You pay $12 on day one, then $48.50 a month for 12 months. It puts the installment loan on your bureaus for 12 months, plenty of time to prepare for a car or whatever you want to replace it. I wouldn't worry about interest so much as the total over the year on a $550 loan is $44. In other words, you're paying $44 for better credit scores and you get a check at the end.

I looked at the Alliant process and decided my time was too valuable to spend moving this money there and waiting for this to happen so that I could do that and transfer this money back to here and set up this automatic payment and then turn it off and then turn it back on again and hope the whole time that I don't mess anything up that causes me to tie up money that I can't afford to have tied up somewhere. $44 extra (technically $29 extra since you need to pay $10 just to get in with Alliant and keep $5 untouchable dollars in the account) in order to push the easy button and improve my credit with 14 minutes of effort spent all in one night was totally worth it to me. When I get our two $550 checks in 9 months for me and my wife I'll use it as a down payment on my next vehicle.

[Anonymous]

Thank you @federalist. You are right. I can use tge money in self lender for my daughters braces. :-) and I should have done tge matg on the interest!

[Anonymous]

Please excuse my phone typos!

[Anonymous]

Self Lender all the way.  Easy 500.00 loan paying 48.00 a month.  reports to all 3.  Iv been doing it for 3 months