In the credit building/repair industry, there are some companies offering self lending. That is, you take a loan in the form of deposit in a savings account. Then you pay it in monthly installments over a year. At the end of the year you take out the deposit plus a small APY, but minus a large APR. The company claims to report it to credit bureaus as an installment loan, hence it is a way to build credit. My question is: does this really work? If so, how does it compare to secured credit cards in terms of credit building?
Is it worth spending extra money to use a scheme that will establish or repair your credit? That depends on how badly you need credit. For someone ready to purchase a home, it could be very beneficial to establish better credit before signing a mortgage. Whether the cost is worth paying can only be determined in specific scenarios.
How does this compare to secured credit cards? By definition those are revolving credit, where this scheme appears to be a loan with a 1-year term. I would expect that having regular payments on an account that will stay open longer will have the bigger benefit, but there are a few people that might benefit from having other loans in the mix.