FDIC Digital Sign, using the official FDIC wordmark. This digital sign indicates the deposit institution is backed by the full faith and credit of the US government.
FDIC Digital Sign, using the official FDIC wordmark. This digital sign indicates the deposit institution is backed by the full faith and credit of the US government.

The benefits of a Credit Builder Loan

Build your credit

Having a year of positive credit history by making timely payments can help increase your credit score1

Low cost

Our credit builder loan has a low interest rate and no closing cost fees, so you can start building your credit affordably

Superior, local service

Your loan is serviced locally. Help is just a phone call away, or you can stop into any of our branch offices!

Common reasons to seek a credit builder loan

Build a credit history

If you have no credit history now but would like to get a loan in the future (for a car, house, etc.), a credit builder loan can establish a credit history for you. Making loan payments on time can help with this.1

Improving poor credit

If you have a history of poor credit, paying back a credit builder loan can help improve your credit.1 However, it will not erase any previously reported credit issues.

Saving for a future down payment

The money we lend to you with the credit builder loan goes into a savings account in your name. As the loan is repaid, we will gradually release the hold on the loan amount. Once the credit builder loan is paid off, you can use the savings toward a down payment on a new loan to purchase something.

Ready to get started?

We have a quick application you can complete from the Apply Now button below. If you have any questions, please contact us »

apply now

Frequently asked questions

When you are approved for a credit builder loan, we will put your desired loan amount ($500 or $1000) in a savings account with a hold, so that you cannot take that money out. As you pay back the loan, a portion of the loan amount will be released from the hold, so that you can access it. We will report your payments (or missed payments) to the credit bureau. At the end of the loan term (12 months), the full loan amount will be available to you to do with it as you wish.

We cannot guarantee that a credit builder loan will improve your credit. However, making loan payments on time has been shown to improve credit for most people. Setting up automatic payments from a checking account can help with paying a loan on time. There are several factors that contribute to a credit score, and your actual results will vary.1

No, we do not pull a credit report inquiry when you apply for a credit builder loan. Instead, we will look at your deposit account history before approval. If your deposit accounts are not with National Bank of Middlebury, we may ask you for account statements from your other financial institution.

No, you are not required to have deposit accounts with National Bank of Middlebury to receive a credit builder loan. However, upon approval, you will need to open a savings account with National Bank of Middlebury to hold the loan funds if you don’t already have a savings account with us. Also, we offer a discount on the interest rate if you set up automatic transfers from a National Bank of Middlebury checking account, so it may be advantageous to open a checking account with us before or after applying for a credit builder loan.

For the credit builder loan, you can choose to borrow either $500 or $1000. The loan term is for 12 months. For this loan, we recommend you pay it back over the 12 months instead of paying it back early. This will ensure a year of credit history being reported to the credit bureau.

1This product is not guaranteed to establish or improve your credit score. Failure to make required monthly minimum payment by the payment due date for the Credit Builder loan will result in negative reporting to the credit bureaus and may negatively impact your credit score(s).  Negative credit history from Lender or other creditors will not be removed from your credit report as a result of this program. In order to qualify for a Credit Builder loan, you agree that the full proceeds of the loan will be transferred into a National Bank of Middlebury savings account. This savings account will be used as collateral for the loan. Rate and terms are subject to change. Successfully paying back a credit builder loan is not a guarantee of approval for any future loan.

Convenient ways to pay your NBM loan

Online Banking
Within our Online Banking, you can transfer money from your deposit account to pay your loan online. Or, you can set up recurring payments. Current Online Banking users: Log in here to pay your loan. Not yet enrolled? Enroll now.

Recurring automated funds transfer
With this service, you can set up a monthly payment of your loan that will be automatically withdrawn from your deposit account on a date you choose. Visit any NBM location, call 877-508-8455 for assistance or submit this secure form: Recurring Loan Payment Transfer to set up recurring payments.

Recurring automated funds transfer from another institution
With this service, you can set up a monthly payment of your loan that will be automatically withdrawn from your deposit account at another institution on a date you choose. Visit any NBM location, call 877-508-8455 for assistance or submit this secure form: Recurring Loan Payment Non-NBM Account Transfer to set up recurring fund transfers.

One-time payment for non-deposit account customer
Make a one-time payment withdrawn from your deposit account at another financial institution by submitting this secure form: One Time Payment Non-NBM Account Transfer.

In person
You can make a payment by cash or check at any of our branch locations with a teller or at an ATM.

By mail
You can mail us a check to pay your loan. Just write your loan account number on the memo line and then mail it to:

National Bank of Middlebury
ATTN: Loan Department
PO Box 189
Middlebury, VT 05753-0189