SeedFi Borrow & Grow Personal Loan: 2021 Review

SeedFi’s Borrow & Grow is a loan that helps consumers cover small emergencies and build credit and savings during repayment.

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Our Take

4.5

NerdWallet rating 

The bottom line:

SeedFi’s personal loan offers emergency cash to bad-credit borrowers at an affordable rate, but charges interest to build savings.

SeedFi Borrow & Grow Personal Loan

on SeedFi's website

Min. Credit Score

520

Est. APR

6.95-29.99%

Loan Amount

$1,200-$7,000

Pros & Cons

Pros

  • Soft credit check to pre-qualify.
  • Reports payments to the three major credit bureaus.
  • No origination or prepayment fees.
  • Returns late fees at the end of the loan.
  • Able to fund a loan within one to two business days.

Cons

  • No co-signed or joint loan option.
  • No option to choose your payment date.

Compare to Other Lenders

SeedFi Borrow & Grow Personal Loan
Oportun
Universal Credit
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Est. APR

6.95-29.99%

Est. APR

27.74-35.95%

Est. APR

8.93-35.43%

Loan Term

8 to 44 months

Loan Term

12 to 51 months

Loan Term

3 to 5 years

Loan Amount

$1,200-$7,000

Loan Amount

$300-$10,000

Loan Amount

$1,000-$50,000

Min. Credit Score

520

Min. Credit Score

None

Min. Credit Score

560

Compare estimated rates from multiple lenders

Compare Rates

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Full Review

SeedFi’s Borrow & Grow plan is a personal loan and credit builder loan in one.

The plan helps borrowers with low credit scores access funds quickly, making it ideal for emergencies, such as a car repair or medical bill. Unlike other emergency loans, borrowers build up savings during repayment.

The loan aims to address what CEO and co-founder Jim McGinley sees as the root cause of many Americans’ financial insecurities: a lack of savings.

He says the loan “was very explicitly designed to help our customers meet their immediate financial needs, but also explicitly setting them on a path toward savings.”

“We believe over a number of years and a number of relationships with our customers, we really can get them out of that cycle of debt, get them toward savings and in doing so help them realize a better financial future,” he says.

Repayment terms are between eight and 44 months, and though the total loan amounts are from $1,200 to $7,000, borrowers can access only $300 to $4,000 immediately. The remaining amount is held in a SeedFi savings account.

NerdWallet recommends building an emergency fund separate from loan repayment. Dividing savings and debt repayment gives you flexibility to skip savings deposits during a difficult month.

SeedFi is best for borrowers who:

  • Need a small loan quickly.

  • Want to build a savings account.

  • Can’t qualify for a no-savings loan at an affordable rate.

Affordability

  • Rates are low compared to other bad-credit lenders.

  • No origination or prepayment fees.

  • No rate discount for autopayments.

  • Late fees are returned to borrowers upon full loan repayment.

Loan flexibility

  • Payment date can be changed, but must be tied to borrower's pay schedule.

  • No co-signed or joint loan options.

  • Loans funded in 1 to 2 business days.

  • Repayment term options are limited.

  • Loans not available in CO, CT, HI, ID, IA, ME, MA, MN, NH, NM, ND, OK, RI, SD, VT and WY.

Transparency

  • Soft credit check to pre-qualify.

  • Reports payments to the three major credit bureaus.

  • Website clearly displays rates.

  • Offers comprehensive FAQs that answer borrower questions.

Customer experience

  • Offers a few customer contact channels with 7-day availability.

  • Offers some financial education.

Key terms to know about personal loans

Annual percentage rate is the interest rate on your loan plus all fees, calculated on an annual basis and expressed as a percentage. Use the APR to compare loan costs from multiple lenders.

An origination fee is a one-time, upfront fee that some lenders charge for processing a loan. The fee can range from 1% to 10% of the loan amount, and lenders typically deduct it from your loan proceeds.

The debt-to-income ratio divides your total monthly debt payments by your gross monthly income, giving you a percentage. Lenders use DTI — along with credit history and other factors — to evaluate a borrower's financial ability to repay a loan.

Lenders that offer pre-qualification typically do so using a soft credit check, which allows you to see rates and terms you qualify for without affecting your credit score. If you accept the loan offer, the lender will perform a hard check to confirm your information. Hard checks knock a few points off your credit score.

How SeedFi Borrow & Grow works

SeedFi’s Borrow & Grow plan splits a loan into two parts: borrowed funds and savings.

With a traditional credit-builder loan, the lender holds the funds in a savings account while you make payments. The lender reports those payments to the credit bureaus and releases the money once it’s paid off.

With Borrow & Grow, SeedFi gives you some money to use immediately and holds the rest in an interest-bearing savings account. You repay the full amount, with interest, before accessing the extra funds.

Say you need to borrow $1,000 for a car repair. You would:

  1. Set up an online account with SeedFi and connect a bank account, then pre-qualify for a loan. You may receive multiple loan offers with different rates or terms.

  2. Choose an offer and customize the split between the loan amount and savings account. A 50/50 ratio is common, but your options may vary based on things like credit, income and bank account transactions. Let’s say you plan to use $1,000 and save $1,000.

  3. Accept the loan, sign the savings account and loan agreements and call SeedFi to complete the application. You’ll receive $1,000 and the other $1,000 will go into a SeedFi savings account.

  4. Repay the full $2,000, with interest, over the repayment period you chose. Payments can be biweekly, semimonthly or monthly and are tied to your job’s pay schedule.

  5. Once the loan is paid off, SeedFi unlocks the $1,000 savings. If you were charged a late fee during repayment, that will also be in your account. You can choose to withdraw the money, or keep it in the savings account.

If you stop paying a SeedFi loan

SeedFi uses the savings account to secure the borrowed amount. If you stop making payments, SeedFi will take the savings to make up for it. You keep the savings you’ve earned, so if payments stop at $1,500, the extra $500 is yours.

As with most loans, if you stop repaying it, your credit score will take a hit.

Where SeedFi stands out

Soft credit check to pre-qualify: Pre-qualification allows borrowers to preview their rate and loan amount with just a soft credit check, which doesn’t affect your credit score. You can pre-qualify with multiple lenders to find the best offer.

Low rates for bad- or no-credit borrowers: SeedFi’s rates are low compared to lenders that serve no-credit and bad-credit borrowers. Installment lenders targeting similar borrowers can charge triple-digit APRs for small loans.

Fast funding: SeedFi says if a borrower provides all the necessary documentation, a loan decision can be made within minutes. Loans are typically funded within one to two business days, but SeedFi says next-day funding is common.

Help build credit and save money: The benefits of a typical credit-builder loan apply here: On-time payments help to build credit, and you get the money once it’s paid off.

Where SeedFi falls short

No co-signed or joint loan option: Borrowers can’t add a co-signer or co-borrower to a SeedFi loan. Adding someone with better credit or higher income to an application can improve your chances of qualifying or getting a low rate.

Small loan amounts: SeedFi’s loans can only cover up to $4,000 in expenses and aren’t designed to consolidate a large amount of debt or pay for a big home improvement. Traditional personal loan amounts tend to be between $1,000 and $50,000.

An expensive way to save: The SeedFi loan works best if you want to both borrow and save, because SeedFi charges interest on more money than you need to borrow.

For example, if you need to cover a $1,000 emergency and SeedFi lends $2,000 to be repaid over 12 months at a 20% APR, the total interest costs will be about $223. If you borrowed only $1,000 with the same terms, the interest would be cut in half.

The Borrow & Grow plan could help if you’ve struggled to build an emergency fund — and the interest-earning account is a bonus — but there are other ways to save money without paying interest.

How to qualify for a SeedFi loan

SeedFi reviews your creditworthiness and connects to your bank account to review transaction history. Here’s what you need to qualify:

  • Verifiable income.

  • An active bank account.

  • A Social Security number or individual taxpayer identification number.

  • Minimum credit score: 520; borrower average is 600. Those with no credit score can also apply.

  • Annual net income: $10,000; borrower average is $54,000.

  • Debt-to-income ratio: None required; borrower average is 20%.

  • Average monthly free cash flow: No minimum required; borrower average is $2,000.

Loan example: A two-year, $5,000 loan repaid at a 20.5% APR would cost $256 in monthly payments. You’d pay $1,144 in total interest on that loan.

How to get a SeedFi loan

Apply on SeedFi

You can make an account to begin the pre-qualification process on SeedFi’s website. If you qualify, the lender will show you available loan options.

Pre-qualify on NerdWallet

NerdWallet recommends comparing loans to find the best rate for you. Pre-qualifying may get you personalized rates from multiple lenders that partner with us. Pre-qualifying will not impact your credit.

Personal Loans Rating Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 30 lenders. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read our editorial guidelines.