 TITLE: How Do I Get a Credit-Builder Loan? CONTENT: 6 Steps to Getting a Credit-Builder Loan\n----------------------------------------\nApplying for a credit-builder loan is surprisingly fast and fairly simple. Follow these six steps to get a credit-builder loan:\n### 1\\. Check Your Credit Reports and Scores\nEven though credit-builder loans are designed for people with poor or no credit, lenders will usually still review your credit reports and scores before approving you for a loan. You should do the same. Find out where you stand by getting a free copy of your credit report.\n### 2\\. Gather What You Need\nBefore completing the application, spend a few minutes gathering the necessary information and documentation. Each lender will have its own criteria, but you'll typically need to provide the following information:\n*   Pay stubs, tax returns or other proof of income\n*   A valid bank account number and routing number\n*   Social Security number\n*   Valid U.S. address\n*   Phone number\n*   Address\n*   Form of ID, such as a driver's license\n*   Monthly mortgage or rental payment\n### 3\\. Figure Out Where to Get a Credit-Builder Loan\nWhile you won't usually be able to apply for a credit-builder loan at large national banks, there are several different lenders that offer these loans:\n*   **Credit unions**: Many credit unions offer credit-builder loans, though you'll need to become a member before you apply. Credit unions, which are nonprofit financial institutions that return profits to members, typically offer low interest rates and favorable terms. Look for a credit union near you that you may qualify for.\n*   **Banks**: While most national and international banks do not offer credit-builder loans, regional and local banks often do.\n*   **Lending circles**: With peer lending circles, participants qualify for interest-free loans, and payments are reported to the credit bureaus. They offer a way to obtain no-interest loans whose payments are reported to the three credit bureaus, thus helping you build credit. The nonprofit financial marketplace Mission Asset Fund can help you find a lending circle in your area.\n*   **Online lenders**: Online lender Self Financial offers credit-builder accounts, in which you make payments toward a savings fund. It offers repayment terms as long as two years, and you'll pay a one-time sign-up fee of $9 to $15, depending on the loan amount.\n### 4\\. Understand the Terms and Conditions of the Loan\nBefore agreeing to a credit-builder loan, make sure you review the terms and conditions. There are some factors you should keep in mind:\n*   **Grace period**: Some loans have a grace period, or a time period before you have to start making payments on the loan.\n*   **Prepayment**: Most lenders don't charge prepayment penalties. However, if you close your account ahead of schedule, you may lose out on months of payment history—the whole purpose for taking out the loan.\n*   **Loan term**: Make sure you're comfortable with the loan term and monthly payment. The payment should fit comfortably within your budget so there's no danger of missing one.\n### 5\\. Apply for the Loan\nOnce you're comfortable with a lender, you can move forward with your application. In most cases, you can fill out an application online. Or, if you're working with a brick-and-mortar credit union or bank, you can submit your application in person. The application takes just a few minutes to complete.\n### 6\\. Start Making Payments and Building Your Credit\nOnce your loan is in place, you can start making monthly payments. For the credit-builder loan to work as designed, it's essential that you make all of your payments on time. Your payment history accounts for 35% of your credit scores; miss just one payment, and your credit could suffer. END