SeedFi was established in 2019, and it offers solutions aimed at helping people with low or no credit scores and restricted budgets establish credit.
SeedFi Credit Builder Loan is for people with poor credit who want to improve their credit score and financial situation. To avoid any penalties, simply pay on time.
Read on to find out if SeedFi is the right service for you.
What Is SeedFi?
SeedFi is a lender that offers financial services to individuals with low or no credit scores.
It's a legit company that operates in 32 states and DC with proper permits. It is in close contact with several different banks.
SeedFi communicates with the three major credit reporting agencies (Equifax, TransUnion, and Experian) about your payment history.
The Operation of Seedfi Credit Builder Loan
Through Credit Karma Money, SeedFi customers can access Credit Builder Prime (The financial software giant Intuit owns SeedFi and Credit Karma.). Credit Builder Prime is an innovative take on the standard "credit-builder" loan that allows you to make substantial savings over time. You can open a personal line of credit with as little as a $10 biweekly payment (Payments can be scheduled to coincide with your payday or at any other frequency you like.). With a line of credit, you pay back the obligation in installments rather than receiving the full amount at once. When your monthly payments reach $500, SeedFi will transfer the funds to an easily accessible savings account. There are no costs associated with using Credit Builder Prime, and your first investment will be returned in full.
The unique feature of this plan is its ability to provide a credit on an ongoing basis. In contrast to traditional installment loans, your Credit Builder Prime account will remain active and reactivate after the initial $500 is spent. Don't miss a payment and gain instant access to your funds every time $500 is put away.
You are free to do what you want with the savings account and the funds within it. The money is held as collateral while the loan is being repaid. Once your balance reaches $500, you'll have full access to your funds. Once your account is unlocked, you have the option of continuing to save $500 at a time and collecting interest similar to a regular savings account or making up to six withdrawals or transfers per month.
You may end your account if you have paid off your balance, received the desired credit score improvement, and can now obtain credit on your own. You can move your savings to another bank or credit union that offers more convenient banking services.
SeedFi Credit Builder Loan Eligibility Guidelines
Multiple criteria are used to decide whether or not to provide a loan. Lenders' underwriting standards vary, but it's common for them to look at an applicant's credit history and income to decide whether or not to extend credit. Though it won't guarantee your loan, meeting the criteria below will help you determine if a credit builder loan is a good fit for your situation.
Minimum Required Credit Score
SeedFi's Credit Builder Prime offerings are available to anyone with low or no credit scores. However, a rigorous credit check will be performed if you choose a Borrow & Grow loan offer from SeedFi. There is no mention of what sort of credit score is needed to qualify for Borrow & Grow.
Income Requirements
The minimum yearly net income needed to be eligible for a SeedFi loan or line of credit is $10,000, and borrowers must also have a U.S. bank account.
Co-signers and Co-applicants
SeedFi does not yet support joint applications with a co-signer or co-applicant.
Application Procedure for a SeedFi Credit Building Loan
An online account application is available at SeedFi's website. Initially, you will provide SeedFi with some basic personal information and authorize them to access your financial records and credit report. Then, without affecting your credit, SeedFi will present you with the loan options for which you are eligible.
If you find a deal that interests you, you may submit a thorough application. Depending on whether you go with an installment loan or a line of credit, SeedFi will open one or two fee-free savings accounts for you.
All SeedFi investors must be 18 or older, have a valid Social Security number or Individual Taxpayer Identification Number, and have access to an SMS-enabled phone in addition to achieving the minimum income requirement.
Pros and Cons of SeedFi Credit Builder Loan
Pros
Sends payment data to the three major credit bureaus.
You may improve your credit score by making consistent, on-time payments with SeedFi, since the company reports them to Experian, Equifax, and TransUnion. If you are late with payments, it might have a negative impact on your credit.
The website has extensive Frequently Asked Questions pages.
If you have any queries concerning SeedFi loans, you may find the answers to most of them in the company's extensive FAQ section. Some lenders are not as open and honest as others regarding the conditions and procedures of their loans.
Put money aside as you pay off your debt.
In addition to reducing your debt, your payments to SeedFi will be deposited into a savings account that will remain inaccessible until the loan is paid in full. Depending on the conditions of the loan, you may expect to have anywhere from $1,250 to $4,500 saved up by the time you've paid off your debt. Because you can't withdraw your money whenever you want, this savings account isn't as handy as a traditional one. However, it may encourage you to save more regularly than a traditional account would.
Competitive APRs.
When compared to the other lenders we highlight in our guide to the best personal loans, SeedFi's interest rates are competitive overall, and they are excellent for consumers with poor credit.
Ensure your loan eligibility before applying.
A soft credit check is performed by SeedFi when you request a loan, giving the lender access to your full credit history without affecting your score. Your credit score won't take a hit when you receive the loan terms you've requested.
The low required minimum amount for the loan.
SeedFi is an excellent alternative for people who simply need a modest quantity of money to get by temporarily because its minimum loan amount is merely $300.
Cons
It's restricted to just 36 states and the District of Columbia.
Citizens of the states of Connecticut, Hawaii, Idaho, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, North Dakota, Rhode Island, Vermont, and Wyoming are not eligible for SeedFi loans. Neither are residents of South Dakota, Vermont, or Wyoming.
Paying penalties for being late.
If you are late with your payments, you will be charged a late fee. Late fees will be deducted from the total amount refunded.
Minimal loan caps.
With SeedFi, the maximum loan amount is $4,000. You'll have to look for a new lender if you need more.
