LoqBox
REVIEW

Great News: Another 0% Credit Builder Loan But.....

Loqbox is the latest credit builder loan in the market and it does not charge any interest (ie 0% APR). That means what you pay in interest is what you save. However, there is a slight catch. Once the credit builder loan is paid off, it is considered unlocked by Loqbox. If you transfer the cash to one of four Loqbox bank partners, you will not be charged any fee. However, if your bank account is not one of Loqboxs' partner, then you have to pay a $40 fee. Let's explore Loqbox in greater detail.

How does Loqbox Build work?

LoqBox Build is a credit builder loan. For those who are not familiar with a credit builder loan. Here is a brief explanation. In a traditional loan, you get the loan amount in your bank account and you can use the cash however you like. Every month, you pay back the back in installments (principal and interest) until the loan is paid back. A credit builder loan works in reverse (even though it is reported as an installment loan to the credit bureaus). You do not get to see the "loan amount" but instead have to pay it back in monthly installments until the full amount is repaid. Once that happens you can unlock your account and access the cash that you have "saved up". And you would have had credit building history with those payments as well.

Now that we have got this out of the way, let's look at how Loqbox Build work. When you apply for the Loqbox Build, you first have to determine an amount you want to save over 12 months (Loqbox calls this your cash-redeemable digital voucher). You will then be given an interest free loan by Loqbox Finance LLC which you have to repay over 12 month. As an example, if you want to save $1,200, you would have to pay $100 every month for 12 months.

Technically speaking, you have purchased a $1,200 cash-redeemable digital voucher. And Loqbox Finance is paying for it monthly. And you pay back Logbox Finance.

There are no credit checks and your payments will be reported to all three major credit bureaus.

Unlocking LoqBox

You can unlock your Loqbox once the 12 months are up by simply going to your members area and clicking "UNLOCK your LOQBOX" or by contacting customer support. You can also unlock your account before the end of the Loqbox Build Period (ie 12 months). You will simply get back what you have paid to Loqbox.

Receiving Your Proceeds

Loqbox will give you two alternatives to receive the cash that you have saved up. You could open an banking account with one of their four online banking partners and Loqbox will transfer your cash to your new account. The four banking partners are Stash, AXOS, Nationwide and CIT. And they will do this free of charge. Loqbox does not make any money from their credit builder program because they do not charge any interest on their credit builder loan. Instead, they are paid a commission from these banking partners. If all of these partners have rejected your application to open an online banking account, then Loqbox will transfer your cash to any US bank account for free.

If you wish to transfer the cash to a US bank account of your choosing, then you simply have to choose FLEXI UNLOCK in your members area and Loqbox will transfer the cash for a $40 fee.

Competition

Credit Builder Loan	APR	Term Maturity	Loan Amount
Loqbox	0%	12 Months	Varies
SeedFi	0%	Varies	$500 Increments
Self	15.97%	12 or 24 Month	Varies
Credit Strong	5.85% - 14.89%	24, 36, 120 Months	$1,000 - $10,000

Compared with Credit Builder Loans that charged interest

There are many well known credit builder loans like Self and Credit Strong. They all have slightly different payment plans, loan amounts and maturities. But they all charge interest for their credit builder loans. And LoqBox does not. You only have to pay a $40 fee if you wish to transfer your Loqbox savings and cash to a bank account which is not a partner of Loqbox.

Compared with other 0% APR Credit Builder Loans

At this moment, SeedFi is the only other credit builder we know of that does not charge any interest rate like Loqbox. There a couple of differences between the two. Firstly, SeedFi require you to save up to $500 before you can withdraw or unlock your savings. In contrast, you can choose the amount you want to save with Loqbox. Loqbox has a 12 month term maturiy whereas SeedFi does not. It depends on the amount of monthly payment plan that you choose.

The other key difference is that after you have saved $500, you can move your money from SeedFi to any bank account. Loqbox, on the other hand, will charge you $40 for unlocking and withdrawing your cash unless you open and deposit it in our of their four online banking partners.

Pros: What We Like

• 0% APR - This is the biggest highlight of Loqbox. They do not charge any interest for their credit builder loan. Hence, what you pay is what you keep in your savings account.


• No Credit Checks - Loqbox does not perform any credit checks.

Cons

• Cost to move money after term ends - At the end of 12 months, you can unlock your Loqbox. If you decided to open an online banking account with one of Loqbox four partners, you can transfer your cash there without any fee. If you transfer the cash to your own bank account that is not a partner of Loqbox, you will be charged a $40 fee. Loqbox is the only credit builder loan I know that has such practice.


• Only one maturity - Loqbox credit builder loan all have 12 month maturity. In contrast, other credit builders offer a variety of maturities and more choices for consumers.

Our Take: 0% APR but with a catch

The Loqbox is one of the rare credit builder loans that does not charge any interest (ie 0% APR). Hence, what you pay is whatever gets put into your savings account while you build up credit history. It has only one maturity (ie 12 months) and you can choose the amount you want to save.

However, when the 12 months are up and you can unlock your Loqbox account, you will be charge a $40 fee to move the cash to your own bank account unless you open an online bank account with one of Loqbox partners. Another thing you have to consider is Loqbox only offers a 12 month maturity whereas others offer a variety of term maturities that might suit some of you better.

If you are ok with a 12 month credit builder loan with 0% interest, then the Loqbox is a great way to build or rebuild your credit. 12 months is a relative quick time to build up some savings without having to pay any interest cost and still build your credit. You should ideally be ok with opening a new online bank account with loqbox's partner banks so you can unlock your savings after 12 months for no fee. If you insist on moving the cash to your own bank account, then you might want to consider another credit builder loan like SeedFi Credit Builder Prime, which also does not charge any interest rate and allows you to move you cash to any bank account upon loan maturity.

To sum up, after reviewing and evaluating Loqbox, we have decided to give it a 4.3 star out of 5 for not charging any interest rate for their credit builder loan. It's insistence on using partner banks for the transfer of money out of Loqbox account prevents us from giving it a higher rating. If you are looking for a credit builder loan, we would happily recommend Loqbox and even more so if you are willing to set up a banking account with one of their partners.