Establishing a positive credit history is a vital step toward a stable financial future. If you're looking for ways to build credit but can't qualify for traditional loans, a credit builder loan is a more accessible alternative.
Featured among our top credit builder loans, MoneyLion's Credit Builder Plus loan is available in most states, doesn't require a credit check for approval, and comes with a variety of other financial tools. However, it also comes with monthly subscription fees and potentially high interest rates. Read on to see whether it's a good fit for you.
5.99% to 29.99%
$19.99 monthly membership fee
N/A
$1,000
- TransUnion credit monitoring included in the membership
- No hard credit check
- Low potential APR
- $20 monthly membership fee
- One plan
- High potential APR
Featured among our top credit builder loans, MoneyLion's Credit Builder Plus loan is available in most states, doesn't require a credit check for approval, and comes with a variety of other financial tools. However, it also comes with monthly subscription fees and potentially high interest rates.
- The information related to MoneyLion Credit Builder Plus has been collected by Business Insider and has not been reviewed by the issuer.
- Apply for a loan up to $1,000 with no hard credit check
- Has a 12 month loan length
- Membership fee of $20
- Access of 0% APR cash advances
MoneyLion Credit Builder Details
According to MoneyLion, more than half of members raise their credit scores by 42 points within 60 days. However, MoneyLion's Credit Builder Plus is just one of several features the fintech company offers.
What Is the MoneyLion Credit Builder Program
The MoneyLion Credit Builder Program is a loan designed to help users rebuild their credit history or establish first time credit. The maximum loan amount is $1,000 and you will receive some of the loan amount upfront while the remainder is stored in a reserve account.
Key features of MoneyLion Credit Builder
The main appeal of MoneyLion is the collection of financial tools available when you sign up for its subscription with a $19.99 monthly membership fee. Customers gain access to features like an investment account, up to $500 cash advances, and mobile banking with benefits. However, customers just looking for a credit builder loan should look elsewhere, as you'll have to pay for the monthly fee in addition to any interest charged on the credit builder loan itself.
MoneyLion's credit builder loan is available in 42 states and Washington, D.C; it's not currently offered in Colorado, Indiana, Iowa, Maryland, Montana, Nebraska, Nevada, and Vermont. To qualify, you must be at least 18 years old and a United States citizen or permanent resident with a Social Security number.
MoneyLion's Credit Builder loan doesn't require good credit or any credit history for approval, and applying won't result in a hard inquiry on your credit report. Instead, MoneyLion confirms that you have a checking or spending account that has been open for at least 60 days. That account must be in good standing with a verifiable income stream and have a sufficient balance and transaction history (as determined by MoneyLion).
MoneyLion has a Trustpilot rating of 4.6 stars out of five based on feedback from over 28,000 reviews, with 91% of reviewers leaving four or five stars. While MoneyLion is not accredited by the Better Business Bureau, the company's profile there also boasts a rating of 4.74 stars out of five based on over 4,000 reviews.
On the other hand, MoneyLion has also received a high volume of complaints, with nearly 1,300 filed in the past three years. Among negative reviews on both sites, common issues raised by MoneyLion users include unresponsive customer service, unexpected costs, and difficulty signing up.
How MoneyLion Credit Builder Loan Works
The application process
To be eligible for a credit builder loan, you'll need to first sign up for MoneyLion's Credit Builder Plus membership, which has a $19.99 monthly membership fee In addition to credit builder loan eligibility, Credit Builder Plus membership offers financial tools and benefits like credit monitoring, cash back rewards, access to MoneyLion investment and mobile banking accounts, and more.
Once you're eligible, you can apply for a Credit Builder Plus loan. MoneyLion will then confirm your identity and review your linked bank account to evaluate your application. If you're approved, a portion (or, in some cases, all) of your loan amount will be available for disbursal into an account of your choice. The rest is deposited into a Credit Reserve Account, where it's held until your pay off the loan. Your Credit Reserve Account may earn interest at prevailing market rates but is not FDIC-insured. If you default on your loan, the Credit Reserve Account may be liquidated to satisfy your remaining debt.
Repayment terms and structure
MoneyLion's Credit Builder Plus loan maxes out at $1,000, paid over a 12-month term. The APR ranges from 5.99% to 29.99%, respectively far below and above the current average rates for personal loans. That said, the maximum interest rate is far higher than competing credit builder loans, like the Self Credit Builder Account.
As you pay down your loan, MoneyLion reports your on-time payments to the three major credit bureaus. Those positive data points are added to your payment history, which is the most important component of your credit score. However, MoneyLion does not guarantee that paying off a Credit Builder Plus loan will improve your credit.
Within 10-14 business days of your final loan payment, you can access the money in your Credit Reserve Account. Once the loan term is complete, you can continue your Credit Builder Plus membership (if you value the other features) or cancel at any time with no additional fees.
MoneyLion Credit Builder Loan Pros and Cons
The Credit Builder Plus package offers benefits you won't get from other credit builder loans, but you may end up paying more for them.
MoneyLion Credit Builder Loan Pros
Reporting to three credit bureaus — MoneyLion reports your payments to all three major credit bureaus (Equifax, Experian, and TransUnion), so you can improve your credit score across the board.
Additional benefits — Credit Builder Plus membership comes with services like credit monitoring, 0% APR cash advances, and more, many of which are uncommon among other credit builder loans.
Cash back rewards — You can offset some or all of your monthly fees with rewards from the Lion's Share loyalty program. Rewards are issued based on your monthly purchases and how frequently you log in to the MoneyLion app.
MoneyLion Credit Builder Loan Cons
High cost — The monthly fee and potentially high interest rates can make MoneyLion a relatively expensive way to build credit.
Inflexible loan duration — MoneyLion only offers a 12-month loan term; there's no option to apply for a longer loan to bolster your credit history further.
Who Is MoneyLion Credit Builder For?
Like other credit builder loans, MoneyLion's Credit Builder Plus loan is designed for those with limited or negative credit history who are looking to build (or rebuild) their credit profiles. It's a particularly good fit if you'll make use of the additional services that come with a Credit Builder Plus membership, and if you'll be able to reduce or eliminate monthly fees through the Lion's Share loyalty program.
Applying for a MoneyLion credit builder loan is only a good idea if you know you'll be able to make monthly payments on time and in full. Late or missed payments may be detrimental to your credit, defeating the purpose of getting the loan in the first place.
If you won't get much value from MoneyLion's additional services, or if you won't be able to offset the monthly fees, then consider looking for a less costly option among the other top credit builder loans. You can also explore other less expensive ways to build credit, like a secured credit card. You can also find ways to build credit with payments you're already making, such as a rent reporting service. You can find our picks for the best rent reporting services here.
FAQs
By providing loans that do not require a credit check and reporting the on-time payments that you make toward your credit builder loan to all three credit bureaus, MoneyLion helps you add positive credit history that may help improve your credit score. However, results are not guaranteed.
Anyone can apply for the program, but everyone may not qualify for a MoneyLion credit builder loan, but you have a good chance of being approved if you meet the age, identity, and financial requirements.
MoneyLion offers credit builder loans exclusively with a 12-month term. You can pay off your loan early with no penalty, but early repayment may limit the benefit to your credit score.
Credit Builder Plus membership gives you access to loans of up to $1,000.
