Having poor or no credit locks many people out of the lending markets. When emergencies come, they end up with unpaid bills or with payday loans at exorbitant rates.
SeedFi is a company designed to help people in this situation. SeedFi loans are “credit-building” loans. These low-cost “loans” help users build savings and credit at the same time. But the loans aren’t always the best credit option available. Here’s what you need to know about them.
- Credit Builder loans allow borrowers to build savings while paying $1 per month in interest
- Borrow & Grow loans offer immediate cash up to $4,000 with interest rates from 6.95%-29.99%
- No origination fees and late fees are deposited into your savings
Credit Builder Plan: $1/mo
Borrow & Grow Plan: 6.95% to 29.99% APR
$500 to $4,000
7 to 44 months
Founded in 2019, SeedFi is a company with a mission to help those with poor credit and limited access to credit. Americans without a strong financial background may turn to payday lenders and title loan companies when they're facing a financial emergency. But these predatory lenders trap them in a cycle of high-interest debt.
SeedFi’s cofounder, Eric Burton came from a low-income background and struggled with his own bad credit score. He wanted to create a company that would help people facing similar situations. SeedFi is designed to help people in these situations access credit at reasonable costs and build credit proactively.
The company currently operates in most states, but there are some holdouts. You can check the states where it operates here.
What Does It Offer?
SeedFi is a company designed for people with no credit or poor credit who need a product to help them build credit. The company offers term loans that also have a savings component. Whenever borrowers finish paying off a loan, they will also have a savings account with cash savings.
Credit Builder Plan
A Credit Builder Plan is a “loan” where borrowers don’t get money upfront. Instead, payments of $10 to $40 per month are placed into a savings account.
At the end of the term, the borrower gets the cash and a boost to their credit score. Credit Builder loans are repaid over 7-27 months. Borrowers pay $1 in interest each month.
Borrow & Grow Plan
SeedFi’s Borrow & Grow Plan is a more conventional loan with a savings component. Borrowers can access between $300-$4,000 immediately. Then borrowers repay the loan over eight to 44 months.
Although borrowers get access to some money immediately, a portion of the borrowed money is held in a savings account. Borrowers gain access to this portion of the funds when the loan is paid in full. Interest rates on the Borrow & Grow plan range from 6.95%-29.99%APR.
Checking Offer Won’t Harm Your Credit
SeedFi uses soft credit inquiries, so potential borrowers can see a loan offer without hurting their credit. Borrowers who choose to take out a loan from SeedFi will see a small credit ding when they open a new source of credit.
Reporting To Credit Bureaus
SeedFi reports payments to all three credit bureaus. This allows borrowers to grow their credit scores over time. SeedFi reports that, on average, people who use the Credit Builder Plan boost their credit score by 45 points with on-time payments.
Keep The Late Fee
If SeedFi charges a late fee to you, the company puts it in your savings account. Once the loan is paid in full, you get the late fee back.
Are There Any Fees?
Loans from SeedFi feature no origination fees, no application fees, no annual fees, and no other bogus fees. Late payment fees range from $0-$15, but these fees are placed in your savings account. That means you’ll get to “keep the fee” once you repay the loan in full.
Rates and terms on the loans are as follows:
Credit Builder Loan
- Loan Amount: $500
- Upfront Access Amount: $0
- Repayment terms: 7-27 Months
- Interest Rate: $1 per month (4.03% to 5.26% APR)
- Repayment Schedule: Bi-weekly
Borrow & Grow Loan
- Loan Amount: $1,200 - $7,000
- Upfront Amount: $300 - $4,000
- Repayment term: 8 - 44 Months
- Interest Rate: 6.95% - 29.99% APR
- Repayment Schedule: Bi-weekly
How Does SeedFi Compare?
Typically, credit-builder loans are offered by credit unions and community banks. They're often very low-cost because they're designed to serve credit union members. These loans are also offered by a few national lenders. For example, Self Lender and Credit Strong both offer credit-building loans like the loans offered by SeedFi.
SeedFi’s $1 per month in interest, however, beats both of these competitors. Additionally, SeedFi is one of the first major companies to offer a “credit-builder” loan with an “access now” component. These loans serve a deep need for access to reasonably priced credit in emergencies. In the table below, we show how SeedFi compares to Self and Credit Strong.
Of course, people with good credit will have better options than SeedFi. A credit card with a 0% introductory offer or a low-cost personal loan is a much better option. But SeedFi serves people who don’t have great credit options. Compared to a usurious payday or Title loan, SeedFi is an excellent option.
My only caution related to SeedFi relates to the Credit Builder Loan. If you have a stable income, you might qualify for a credit card, even if you have no credit. You can build great credit by simply using a credit card and paying it off in full each month. Even if you can’t open a conventional credit card, many young borrowers can find low-cost secured credit cards.
Borrow & Grow:
6:95% to 29.99%
15.65% to 15.97%
5.85% to 14.89%
$8.95 to $25
Borrow & Grow: $7,000
Borrow & Grow:
7 to 27 months
Borrow & Grow:
8 to 44 months
12 to 24 months
12 to 120 months
How Do I Open An Account?
Before opening an account, potential borrowers can request a custom loan quote from SeedFi. Requesting a quote will not hurt your credit because SeedFi uses soft credit inquiries.
Users can request a quote by providing their name, SSN, income, date of birth, and other relevant information to SeedFi. Borrowers also have to provide a link to a bank account (done securely through Plaid) or a recent bank statement, so SeedFi can verify income. SeedFi reviews this information and sends back a lending decision for qualified borrowers.
Borrowers may choose to accept the quote or not. If borrowers choose to accept the quote, SeedFi may request income verification documents before issuing the loan.
Is It Safe And Secure?
Funds saved by SeedFi are earmarked for borrowers and held in an FDIC-insured bank account. SeedFi’s loans are issued by Evolve Bank & Trust, and Cross River Bank. Each of these institutions is held to bank security standards.
There is always a risk associated with working with banks. Your information may be accessed by hackers. However, the risk is low since these banks must encrypt data. Additionally, your money is safe since it is FDIC insured.
How Do I Contact SeedFi?
The best way to contact SeedFi is through it’s support email account firstname.lastname@example.org. The company does not publish a support phone number and it does not have a chat bot on the website.
That being said, SeedFi does have an "Excellent" score on Trustpilot of 4.8/5 from over 1,000 customer reviews. That's far higher than many of SeedFi's top competitors in the credit builder and emergency loan spaces.
Is It Worth It?
If you can avoid credit-building loans and high-interest personal loans, then you should. Most people with a reliable source of income should be able to build a credit score without paying any money.
That said, SeedFi exists because not everyone manages to build credit proactively. Those who have had poor credit experiences may benefit from SeedFi’s low-cost credit builder loan. Borrowers pay very little and it ultimately encourages you to pay yourself first. Borrowers can use the loan to jumpstart savings and build credit. This may be better than a credit card that may promote overspending.
The Build and Grow plan offers a loan at a reasonable rate given the average credit history of borrowers. However, this loan is still expensive, and some people may be able to avoid these high-cost loans altogether. For example, a person with a medical or dental expense may be able to negotiate a payment plan with the care provider.
Those who need a car repair may be able to use public transit until they have the savings needed to fix their vehicle. These workarounds won’t be available in all cases. But borrowers should consider all possible solutions before taking out debt with double-digit interest rates.
$0 to $15 (deposited into savings)
Early Cancellation Fee
Soft Credit Check
Customer Service Number
Customer Service Email
Mobile App Availability
Web/Desktop Account Access
Rates And Fees
Ease of Use
SeedFi helps people build credit by offering term loans that also have a savings component.
- Build credit and savings simultaneously
- Get upfront cash with Borrow & Grow
- Check your offers without impacting your credit score
- Upper rates on Borrow & Grow loans are higher than what other credit-builder loans charge
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.