Best Online Credit Builder Loans

By Noah Gomez
Published: 29 July 2024

Credit-builders started as niche products from online providers, so these lenders are still leaders. They still dominate the space with some of the most competitive nationwide offers.

That said, not every online lender is good, and each one focuses on a slightly specific niche. You'll need to figure out which is best for your scenario.

We've collected virtually every credit builder loan in the market (>200), and approximately 15 are from online lenders. From there we handpicked the best 7 offers so you can find the best option without hours of research into terms and conditions (& pesky fine print).

Not every credit builder loan is a winner, but these 7 are great choices.

Comparative Summary of 7 Offers

#1 Pick

Cheese

Best Overall Online

Est. APR (%): 10.5
Avg. Principal ($): 1250
Avg. Duration (mnths): 12
Credit Check: No Credit Check

Cheese takes the number 1 spot because all costs considered it is the most affordable option with healthy ~$1,000 principal and flexible 12 — 24 month terms choices.

It also doesn't require a credit check, so you can apply without any fear your credit is impacted (even if you're denied). You can also close it early in good standing to recover paid-in principal without any penalty (although we don't recommend this because more payments = better credit).

The downside is that Cheese isn't available in 6 of our 50 states, so be sure to check availability via the link below.

#2 Pick

MoneyLion

Best with Money Upfront + Full Suite of Services

Est. APR (%): 17.99
Avg. Principal: 1000
Avg. Duration (mnths): 12
Credit Check: Soft Inquiry

Before it became a multi-product behemoth, MoneyLion was one the the first to offer a simple credit-builder loan with half of the money up-front. The reason for it's success is the quality of the interface, combination of products under one roof, and excellent customer service.

That said, MoneyLion is expensive. At $19.99 per month, the membership alone is roughly 2x the second most expensive membership. This makes sense for someone considering the whole platform and switching from their current institution to an entirely digital service. But for those who just want a standalone credit builder loan, there are better options.

#3 Pick

Brigit

Best for Cash Advance

Est. APR (%):
Avg. Principal ($): 600
Avg. Duration (mnths): 24
Credit Check: No Credit Check

Of the three Bs (Brigit, Build, & Bright), we think Brigit makes the best offer as an online lender. This is a 0% interest loan, but you don't need to pay the $9.99 monthly membership to get it. On average, you'll need Brigit for about 24 months, bringing total cost to ~$360, which is competitive and transparent since most interest-based offers don't disclose full cost of borrowing.

Brigit does not require a credit check, and you'll be able to use the cash advance feature in the membership to access some money up front (just not from the credit builder account). You can start with just $1, although it's in your best interest to focus on a higher amount. With Brigit, we think this should be minimum $600.

The default duration is 24 months, but you can cancel the loan at any time without penalty if you need to access your savings. It will be reported with a healthy "paid in full" remark on your report.

#4 Pick

CreditStrong

Best for Long Duration

Est. APR (%): 15.62
Avg. Principal ($): 1050
Avg. Duration (mnths): 36
Credit Check: Soft Inquiry

CreditStong's Instal plan offers the longest duration of any classic model available online at 48 months. This is the best choice for borrowers with multiple negative marks who need to plant a seed for long-term payment history benefits to their profile.

#5 Pick

Ava

Best for Small Monthly Payments

Est. APR (%): 2
Avg. Principal ($): 252
Avg. Duration (mnths): 12
Credit Check: No Credit Check

Ava is popular because its interface is extra friendly. It's also the cheapest option after Bright, but unlike Bright it is available in every state.

It's easy to feel drawn towards to Ava because it promotes a high degree of credibility, and we believe it is a good overall offer for those with limited credit who want small monthly payments.

However, we caution users with negative marks on their report because the loan value is small (~$300). Most borrowers should aim to match the amount on their negative accounts or $1,000 (whichever is higher).

#6 Pick

Build (aka "GetBuild")

Best for Large Principal Offers

Est. APR (%): 15.81
Avg. Principal ($): 1092
Avg. Duration (mnths): 18
Credit Check: No Credit Check

Build offers the highest average principal amount on the list, which means it's best when you have some high value late payments, or any collection or charge-off amount.

We're proponents of the "Equal or Exceed" philosophy, which means any positive history you build to combat negative marks should be equal to or greater than those negative marks. The caveat is instances of extreme negative marks, in which case time is your best friend and you can be more conservative with the amount.

#7 Pick

Kovo

Best for Low Effort

Est. APR (%):
Avg. Principal ($): 240
Avg. Duration (mnths): 18
Credit Check: No Credit Check

Kovo is NOT your typical credit builder loan. Kovo targets those who want the easiest option and are willing to pay.

Rather than make payments on deposit of which the principal is refunded at the end of the loan, you simply pay each month, and that amount becomes installment payments on your report. It is more expensive than others, but you can truly "set it and forget it."

There's also a rewards system attached, which makes Kovo the only CBL + reward program to our knowledge.

Evaluation Criteria

We base our selection on quantitative information collected and stored in a proprietary database, which represents the largest aggregation of credit builder loans in the world.

To accommodate the largest number of consumers, we assume an optimal loan duration as any term between 6 and 24 months. Additionally, we assume an optimal loan principal between $500 and $3,000, with the most desirable quantity as $1,000.

Exceptions to these ranges are made for the most important loan variable: interest. This list has no conflicts between low loan APR and ideal principal + duration ranges.

Counterintuitively, many so-called local credit unions are available nationwide through a system of non-profit affiliation or belief alignment. We do not include them here because they're not exclusively online offers, but most can be accessed from your desktop, so be sure to check out the best credit builder loans in your state.

What is a credit builder loan?

Credit builders are personal loans that help consumers with little or no credit improve their score by applying a combination of flexible eligibility criteria and deferred principal distribution. Lenders include banks, credit unions, and online lenders at an average principal of $3,283 and APR of 7.78%.

Read more here.

Are credit builder loans worth it?

They are worth it if you struggle to get normal personal loans, you have damaged or zero credit history, or you simply have no installment credit on your report.

Critiques sometimes call them gimmicky, but the reality is that they get around a common misconception: that your credit depends on the amount you borrow. It does not. A small principal loan, even with above-average interest, costs pennies compared to the benefits you gain from having positive installment history on your report.

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Thick Credit is not a credit repair organization, a credit conseling agency, or a debtor education providor. It does not act on your behalf to communicate with credit reporting agencies or provide pre-bankruptcy credit counseling and pre-discharge debtor education for bankruptcy.