Get Instant Cash and Build Credit with Credit Builder Loans That Provide Money Upfront

Having poor or no credit history can make it tough to get approved for loans and credit cards. You may feel stuck in a cycle where you need to borrow money but don’t qualify due to lack of credit history. Credit builder loans aim to help by letting you establish credit, but most make you wait until the loan term ends before you can access the funds. However some credit builder loans give you a portion of the money upfront so you can cover emergency expenses or other needs right away.

In this comprehensive guide, we’ll explain how credit builder loans with instant cash work. You’ll learn the pros and cons of these types of loans and see examples from top lenders. We’ll also give tips on how to use credit builder loan proceeds responsibly. Read on to find out if a credit builder loan that provides money upfront could be a smart borrowing option for you.

What Are Credit Builder Loans?

Before diving into upfront money options, it helps to understand what credit builder loans are and how they work

Credit builder loans aim to help consumers establish or rebuild credit history. They work differently than regular installment loans.

Here’s a quick rundown of how standard credit builder loans work:

• You apply for a loan and the lender approves you for a set amount, usually $300 to $1,000.

• Instead of giving you the money upfront, the lender places the funds into a secured savings account.

• You make monthly payments over 6 to 24 months. The lender reports your on-time payments to credit bureaus like Equifax, Experian, and TransUnion.

• Once you pay off the loan, the lender releases the money that’s been held in the secured account to you.

The main benefit of credit builder loans is you can build credit history by making on-time payments each month. A drawback is you won’t have access to the money until the final loan payment.

Can You Get Instant Access to a Portion of Credit Builder Loan Funds?

Traditional credit builder loans make you wait to get your hands on the money. But some lenders now offer products that provide a percentage of the loan funds upfront.

These loans make it possible to get emergency cash within days or even instantly in some cases. At the same time, you can work toward better credit by making monthly payments.

Lenders may deposit a portion of the loan right into your checking account when approved. Or you might get the option to withdraw some of the funds that will be going into your secured credit builder account.

Loan amounts with upfront cash tend to be lower, usually ranging from $250 to $1,000. You’ll get 10% to 50% of the approved loan amount as instant cash.

Which Lenders Offer Credit Builder Loans With Immediate Cash?

We’ve compiled examples of top lenders that provide money upfront with credit builder loans:

MoneyLion

With MoneyLion Credit Builder Plus, you can qualify to get part of your loan amount deposited instantly. Loan amounts go up to $1,000, and MoneyLion provides monthly reporting to all three credit bureaus.

You’ll pay an affordable $19.99 monthly membership fee for Credit Builder Plus access. This also lets you take advantage of Instacash advances up to $250 with no interest or credit check.

Chime

The Chime Credit Builder Card is a bit different than a loan but can provide immediate access to cash. It’s a secured credit card that lets you choose your credit limit and fund it from your Chime Spending Account.

So you aren’t borrowing money but moving your own cash to build credit. There’s no credit check, interest charges, or annual fee.

Dave

Dave offers cash advances up to $500 through its ExtraCash feature. When approved, Dave deposits funds directly into your connected checking account within minutes.

You’ll repay the advance on your next payday. Dave doesn’t charge interest or penalize you for late payment.

Possible Finance

Possible Finance issues personal loans in amounts ranging from $500 to $5,000. When approved, you get 100% of the loan amount deposited instantly into your bank account via ACH transfer.

You can use Possible loans to pay bills, cover emergency costs, or fund one-time expenses. Loans have fixed rates and terms up to 24 months.

Weighing the Pros and Cons of Credit Builder Loans With Instant Cash

Before applying for a credit builder loan that provides upfront money, it’s smart to understand the potential advantages and drawbacks. Here are some key points to consider:

Pros

• Get immediate access to emergency cash within days or even instantly
• Allows you to start establishing credit history while having funds on hand
• Certain lenders don’t charge interest or fees
• Smaller loan amounts may be easier to pay off

Cons

• Loan amounts tend to be lower than standard credit builder loans
• Could hurt credit if you miss or delay payments
• Loans with interest may have higher rates than alternatives
• Requires discipline not to spend the money frivolously

As you can see, responsible use of funds is crucial with these loans. You don’t want to end up in a debt spiral or damage your credit more in the process of trying to build it.

If you need money urgently and will use it for essential expenses, though, the pros may outweigh the cons.

Tips for Using Your Credit Builder Loan Cash Responsibly

When you get instant access to some or all of your credit builder loan amount, it’s vital to spend it wisely. Here are some tips:

• Make a budget – Track where every dollar of your loan proceeds will go. Account for monthly loan payments in your budget too.

• Avoid unnecessary purchases – It can be tempting to splurge with the cash infusion. Resist urges to spend on wants rather than needs.

• Pay bills first – Give priority to paying off overdue or high-interest bills if possible.

• Build your emergency fund – If you have cash left after paying bills, use it to build savings that can prevent the need to borrow in the future.

• Pay down high-rate debt – Consider using some of the money to pay down credit card or payday loan balances, which often have exorbitant interest rates.

• Automate payments – Set up automatic monthly payments on your credit builder loan so you never miss installment and damage your credit.

Alternatives to Credit Builder Loans With Instant Cash Access

Credit builder loans aren’t your only option if you need money now and have bad credit or no credit history. Here are a few alternatives to consider first:

• Ask family or friends for a loan – People close to you may be willing to lend smaller amounts informally. Offer to sign a contract agreeing to repayment terms.

• Sell unused items – Generate cash quickly by selling clothes, electronics, collectibles, or other possessions you no longer use.

• Drive for a rideshare service – You can cash out earnings instantly with Uber, Lyft, or other ridesharing apps.

• Pick up freelance gigs – Consider freelance writing, virtual assistant services, delivery driving, or other flexible ways to earn.

• Apply for a secured credit card – These require a refundable deposit and allow you to build credit with responsible use.

• Take out a payday alternative loan – Credit unions offer these small, short-term loans at lower rates than payday lenders.

• Work overtime – Ask your employer if overtime hours are available to quickly supplement your income.

The Bottom Line

Credit builder loans that provide instant cash could be a smart option if you need money immediately and have limited alternatives. Just be sure to spend the funds carefully and make loan payments on time. With responsible use, these loans can help you establish credit history while covering emergency costs or other pressing needs.