SBA 504 Lending

SBA LENDING

As a nationwide preferred SBA lender, LendingClub will work closely with you to evaluate your needs, develop a customized solution, and guide you through the process from start to finish.

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<ul><li>Multi-use and Special-use Real Estate</li><li>Start-ups</li><li>Business Acquisitions (up to $5 million)</li><li>Franchise Lending</li></ul>

Highlights of SBA Lending

<ul><li>National Coverage</li><li>All Property Types (Assisted Living, Child Care, Limited-Service Hotels)</li><li>Construction Financing</li><li>Long-term Fixed Rates Available </li></ul>

Features of the 504 Loan Program

<ul><li>10%-20% Equity Injection Depending on Multi-use, Special-use or Start-up</li><li>1.15x Debt Service Coverage Ratio Last Full Fiscal Year and Interim</li><li>Prior Ownership &amp; Management Experience Preferred</li><li>Minimum FICO = 660</li></ul>

Loan Qualifications

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For centuries, American women have fought for gender pay equality, lobbied for financial autonomy, and more than earned their places of leadership in the economy. Women and their legacy have impacted today’s world and economy in countless ways.

In 2023, women earned just 83.6 cents to every dollar that men earned, according to data from the U.S. Bureau of Labor Statistics.1 Further disparities exist for women of color and mothers, with Black women earning around 70%, Hispanic women earning around 65% compared to the average White man.2 While ongoing wage and savings gaps are often financial hurdles for women, understanding these challenges can motivate all of us to advocate for higher wages and affect positive change. Here are some resources and tips to help you get started.   <h2>Invest in your financial literacy </h2>Many companies are now focused on sharing free financial education and investment guidance for women. If you&#39;re wondering where to start, the following organizations offer no-cost resources to improve your <a href="https://www.lendingclub.com/resource-center/personal-finance/money-and-mental-health-is-burnout-affecting-your-finances">financial well-being</a> and build confidence:  <ul><li><a href="https://www.ellevest.com/">Ellevest</a>: Ellevest is an investment company focused on providing guidance and education for women investors interested in setting aside money for short- or long-term goals.  </li><li><a href="https://www.wife.org/">Women&#39;s Institute for Financial Education (WIFE)</a>: WIFE is a nonprofit dedicated to empowering women with financial education, through articles, videos, and more. </li><li><a href="https://www.clevergirlfinance.com/">Clever Girl Finance</a>: Clever Girl Finance provides free financial articles and courses, as well as paid one-on-one money coaching and more. </li><li><a href="https://womensmoneymatters.org/">Women&#39;s Money Matters</a>: Women&#39;s Money Matters offers free financial workshops, mentoring, and peer discussion groups to support women.   </li><li><a href="https://hermoney.com/">HerMoney</a>: HerMoney provides women-focused educational articles on saving, earning, investing, borrowing, and more.  </li><li><a href="https://www.savvyladies.org/">Savvy Ladies</a>: Savvy Ladies is a nonprofit offering a free financial helpline for women, no-cost courses, webinars, and money-focused articles. </li><li><a href="https://narrowthegap.co/">Narrow the Gap</a>: Narrow the Gap is a project focused on identifying and eliminating women&#39;s wage gaps in the workplace. It lets you search by profession to better understand pay disparities, and it shares resources for negotiating higher wages at work. </li><li><a href="https://iwpr.org/">Institute for Women&#39;s Policy Research (IWPR)</a>: The IWPR educates people on how policy changes impact women&#39;s finances and economic equity.       </li></ul><h2>Set your financial goals </h2>Once you&#39;ve armed yourself with knowledge, it&#39;s time to start setting your financial goals. Since money is very personal, your goals might differ from someone else&#39;s. For instance, your priority might be becoming a more confident investor and boosting your retirement savings, while someone else may want to pay down their debt. There&#39;s no one right path for everyone.3  These actionable financial tips for women can help you create and track progress toward your money goals, putting you in a stronger financial position over time:  <h3>1. Assess your financial situation </h3>Assessing your current financial situation is a good starting point for setting your goals. Review your bank accounts and credit cards, and check your credit. What do you notice? Is your savings account smaller or your debt larger than you&#39;d like? Does your credit need improvement? Answering these questions will help you determine which financial goals to work toward.  <h3>2. Create a list of specific and measurable money goals </h3>Instead of creating a lofty goal, like building an <a href="https://www.lendingclub.com/resource-center/personal-finance/your-emergency-fund-the-essential-guide">emergency fund</a> or putting money in your retirement savings, consider <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-set-your-financial-goals">setting SMART goals</a> that are specific and measurable. For example, if your lofty goal is building an emergency fund, your specific goal could be putting $500 each month into a <a href="https://www.lendingclub.com/personal-savings/high-yield-savings">high-yield savings account</a>. You may aim to put $250 from each paycheck into your 401(k) or another employer-sponsored retirement account. Or you could prioritize asking for a raise at your next performance review and determine how you&#39;d like to approach that.  With specific goals in mind, seeing your progress and staying motivated will be easier. A large, nebulous goal can be much harder to track. It can also be smart to divide your goals into buckets—short-, medium-, and long-term—and assign deadlines for yourself where possible. For instance, you might give yourself one year to save $6,000 in an emergency fund. If it&#39;s helpful, you could create a table outlining your goals and how you plan to achieve them.4   Here&#39;s a basic template with some sample goals:  <table><tr><td>Lofty goal </td><td>Specific goal </td><td>Goal type </td><td>Deadline </td></tr><tr><td>Build emergency fund </td><td>Save $500 a month (or $6,000 in a year) </td><td>Short-term </td><td>One year </td></tr><tr><td>Save for retirement </td><td>Contribute $250 per paycheck to retirement account </td><td>Long-term </td><td>Ongoing </td></tr><tr><td>Increase income </td><td>Ask for raise </td><td>Short-term </td><td>Next performance review </td></tr><tr><td>Earn professional development certificate </td><td>One year </td><td></td><td></td></tr><tr><td>Build credit </td><td>Pay off $6,000 in credit card debt </td><td>Medium-term </td><td>Two years </td></tr></table><h3>3. Prioritize your goals  </h3>Once you have your list ready, it&#39;s time to prioritize and <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions">set a budget</a>. Consider putting the essentials first, such as growing your emergency savings or paying down your high-interest debt. These essential goals are very important for your financial well-being. Also, your &quot;wants&quot; should be lower on the priority list than your &quot;needs.&quot; For example, saving for a vacation or new furniture might be a lower priority than <a href="https://www.lendingclub.com/personal-loan/debt-consolidation">consolidating credit card debt</a> to facilitate repayment.5   <h3>4. Stay on track with the right tools </h3>Creating and prioritizing your goals is the easy part, while working toward those goals is often more challenging. Fortunately, several budget-tracking apps and other financial tools exist to help you stay on track.6 For example, when you open an account with Ellevest, its platform creates a road map for your investments that you can rely on for motivation. Other organizations, like Savvy Ladies, offer free budgeting worksheets and calculators.   Besides using tools for financial support, set up automatic contributions to savings and investment accounts, as this step can take the guesswork out of saving money.   <h2>The bottom line </h2>It&#39;s no secret that wage and savings gaps are often hurdles for women seeking to improve their finances. Fortunately, investing in your own financial literacy, setting actionable goals, and advocating for <a href="https://www.lendingclub.com/resource-center/personal-finance/tips-on-how-to-negotiate-a-salary">higher wages</a> could make it easier to achieve your goals. Some of the tools and tips we&#39;ve shared above can help you get started.    <hr/><ol><li><a href="https://www.bls.gov/opub/ted/2024/womens-earnings-were-83-6-percent-of-mens-in-2023.htm">U.S. Bureau of Labor Statistics, TED: The Economics Daily</a>. “Women’s earnings were 83.6 percent of men’s in 2023.” </li><li><a href="https://www.pewresearch.org/social-trends/2023/03/01/the-enduring-grip-of-the-gender-pay-gap/">PEW Research Center</a>. “The Enduring Grip of the Gender Pay Gap.” </li><li><a href="https://files.consumerfinance.gov/f/201501_cfpb_digest_financial-well-being.pdf">Consumer Financial Protection Bureau</a>. “Financial well-being: What it means and how to help.” </li><li><a href="https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_SMART-goals_tool_2018-11.pdf">Consumer Financial Protection Bureau</a>. “Setting SMART goals.” </li><li><a href="https://files.consumerfinance.gov/f/documents/cfpb_building_block_activities_reflecting-needs-versus-wants_guide.pdf">Consumer Financial Protection Bureau</a>. “Reflecting on needs versus wants.” </li><li><a href="https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/">Consumer Financial Protection Bureau</a>. “Budgeting: How to create a budget and stick with it.” </li></ol>

 Giving yourself time to prepare can help you maximize your success when you go from two household incomes to one.

Switching from a dual-income household to living on one income may seem daunting, even if it&#39;s by choice. However, with a bit of planning and time spent shoring up your financial plan, it&#39;s possible to accomplish your goal and achieve financial security. Here are some tips to help you with the transition.1 <h2>Start by preparing ahead of time, if possible  </h2>The decision to learn how to live off one income may not necessarily be yours. A job loss, a divorce, or a medical crisis can come out of nowhere and make it difficult to plan.   However, if you&#39;re switching to living on one income by choice, it&#39;s important to start preparing for the transition as early as possible. For example, if you&#39;re starting a family and want one parent at home or you&#39;re planning to homeschool your children, you&#39;ll want to outline when you expect to make the change, so you can lay out your plan. <h2>How to transition from a dual-income to single-income household </h2>No matter why you&#39;re planning to live on one income, it&#39;s important to take a step back and evaluate your situation and opportunities to make it work. With some careful planning, you can adjust your finances and come out thriving. Here&#39;s what to do if you find yourself living with only one paycheck. <h3>1. Build a budget </h3>With a dual-income household, budgeting may not have been a necessity. Now that you&#39;re living on less, however, a proper budget may be crucial for your success.   To <a href="https://www.lendingclub.com/resource-center/personal-finance/tips-for-financial-success-in-budgeting-your-money">build a budget</a>, start by listing your expected income and basic expenses. Then, add in your expected discretionary spending to get an idea of whether you&#39;re living within your means. If not, make adjustments to your monthly spending goals until you get there.2 <h3>2. Cut discretionary spending </h3>While earning more money can certainly make <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions">budgeting</a> easier, it&#39;s often more feasible to spend less, at least in the short term. This can be especially true if you experienced a bit of &quot;lifestyle creep&quot; with two incomes—adding services and amenities as your household income increased.  Go over your expenses from the last two to three months line by line, looking for things you can reduce or cut altogether to save extra money. For example, you can cancel subscriptions you can live without, dine out less frequently, or minimize your online spending.2 <h3>3. Look for opportunities to reduce necessities </h3>While some expenses can&#39;t be completely removed, you may still be able to save some money. For instance, you can shop around for car insurance to see if you can secure a lower rate with a different insurer, or you can adjust your thermostat to reduce your utility bill.  You can also look for ways to cut your grocery bill, such as learning how to use coupons or switching to generic brands.3  <h3>4. Establish an emergency fund </h3>If you have time to prepare for your transition, work on building an <a href="https://www.lendingclub.com/resource-center/personal-finance/your-emergency-fund-the-essential-guide">emergency fund</a> to protect you in the event of a financial emergency. Financial experts recommend maintaining three to six months&#39; worth of basic expenses, but you can evaluate your situation and money needs to determine the right amount for you.  If you don&#39;t have time to build an emergency fund, try to incorporate some savings into your budget as you get used to living on one income. Even if it&#39;s not much, it can still give you some peace of mind, especially if you generally live <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-stop-living-paycheck-to-paycheck">paycheck to paycheck</a>.4 <h3>5. Eliminate high-interest debt </h3>While your budget may be tight, tackling high-interest credit card debt can reduce your interest costs and free up some cash flow every month.  If you have good credit, a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation">debt consolidation loan</a> can potentially help you save money with a lower interest rate. Consolidating multiple balances can also simplify your budget and make it easier to stay on top of payments.  <h3>6. Refinance other debts </h3>Take a look at your other debts to see if there are opportunities to save money through refinancing. If you have a mortgage or <a href="https://www.lendingclub.com/auto-refinancing">auto loan</a>, for instance, compare your interest rate to the current market rates to get a sense of whether refinancing can help.  You can also get preapproved with a few lenders to get an idea of what your terms would look like based on your credit profile. If you qualify for better terms, it could potentially save you money.<h3>7. Downsize your residence </h3>If you&#39;re not expecting to go back to a dual-income household anytime soon and your mortgage or rent payment is steep, you may consider downsizing to a less expensive home or apartment.   If you&#39;re a homeowner, selling your home can also give you access to the equity you&#39;ve built up, which you can use as a buffer or a rainy-day fund for financial emergencies.  <h3>8. Tap into community resources </h3>If you&#39;re struggling to get by despite your efforts to cut back, research government programs and community resources to see if you can get help with rent, groceries, utilities, and other basic needs.   If you&#39;re unsure where to start, you can <a href="https://www.211.org/">call 211</a> to learn more about assistance options in your area.  <h3>9. Check in with your finances regularly </h3>Once you put your financial plans in motion, schedule some time to reevaluate your approach to ensure you&#39;re meeting your needs and still on track with your goals.  In the early stages, you may need to check in once a month or so. But over time, you may be able to stretch that out to every few months or even longer. The important thing is to avoid getting complacent and to maintain a <a href="https://www.lendingclub.com/resource-center/personal-finance/how-little-can-you-live-on-tips-for-frugal-living">frugal lifestyle</a>. <h2>The bottom line </h2>Learning how to budget on one income can be challenging, especially if you&#39;re used to a dual-income lifestyle. However, meaningful changes to your spending habits and other efforts to manage your money more efficiently can help you not only accomplish your goal but also thrive.   As you consider your options, it&#39;s important to focus on your specific situation and financial needs to determine which strategies work best for you.  <hr/><ol><li><a href="https://files.consumerfinance.gov/f/201501_cfpb_digest_financial-well-being.pdf">Consumer Financial Protection Bureau</a>. “Financial well-being: What it means and how to help.” </li><li><a href="https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/">Consumer Financial Protection Bureau</a>. “Budgeting: How to create a budget and stick with it.” </li><li><a href="https://www.consumerfinance.gov/about-us/blog/track-your-spending-with-this-easy-tool/">Consumer Financial Protection Bureau</a>. “Track your spending with this easy tool.” </li><li><a href="https://www.consumerfinance.gov/an-essential-guide-to-building-an-emergency-fund/">Consumer Financial Protection Bureau</a>. “An essential guide to building an emergency fund.” </li></ol>

Setting a wedding budget may not be as difficult or overwhelming as you think. This guide will help you keep it simple. 

Wedding costs can vary widely, depending on factors like location and what you have planned for the big day. No matter what type of wedding you&#39;re planning, though, one thing is certain: Budgeting can feel like an overwhelming task. Fortunately, it doesn&#39;t have to be. Breaking down the process into several steps will give you a clear plan and make things much easier. There are also tools available to help you estimate and track costs.  Here&#39;s what to know about average wedding costs, creating a wedding budget, and how much to earmark for each type of expense.  <h2>How much does the average wedding cost? </h2>According to The Knot&#39;s annual Real Weddings Study, <a href="https://www.theknot.com/content/wedding-data-insights/real-weddings-study">weddings averaged $35,000</a> in 2023. However, wedding costs vary based on several factors, including your guest list, venue, and vendors. For instance, if you opt for a backyard wedding with a dozen people and hand-cut bouquets from your mom&#39;s garden, it&#39;ll probably be much less expensive than if you invited 200 guests to celebrate at an upscale hotel.  Location also plays a big role in costs. If you&#39;re located in a big city, such as Chicago, your wedding venue will likely be more expensive than a venue in a rural town with less demand. The cost of living in a particular area affects prices, too.  <h2>How to create your wedding budget </h2>Here are some actionable steps you can take to make budgeting for your wedding simpler.  <h3>1. Set a rough budget </h3>Think about your vision for your big day, including the guest list, ideal venue, vendors, attire, and other costs, and come up with a basic estimate of costs. If you&#39;re planning a small, backyard wedding, you might start with a rough budget of $5,000. Remember that you can tweak this number as you go; it&#39;s just a starting point.  <h3>2. Understand who&#39;s contributing </h3>Are you paying for your wedding on your own? Or will you have help from your parents, other relatives, or close friends? Understanding who&#39;s contributing can also help guide your wedding budget. A couple getting a large gift from their parents, for example, might have a bit more wiggle room with their budget than a couple paying for their big day independently.   <h3>3. Look into average costs </h3>Tools like <a href="https://www.theknot.com/wedding-budget">The Knot&#39;s free Budget Advisor</a> can offer some valuable insight into average costs of vendors and venues in your area. You can also do a deeper dive into the costs of specific vendors if you have them in mind. Take notes on everything you research, so you can easily reference the information later. Here are the types of costs you&#39;ll want to research:   <ul><li>Venue </li><li>Catering </li><li>Entertainment </li><li>Photographer </li><li>Flowers </li><li>Cake </li><li>Transportation </li><li>Hairstyling and makeup </li><li>Attire </li><li>Officiant fees </li><li>Favors </li></ul><h3>4. Ask for recommendations  </h3>Once you have an understanding of average wedding costs in your area, it&#39;s time to compare potential vendors. Start by asking your friends and family for recommendations if you&#39;re feeling overwhelmed by the idea of poring through search engine results. Chances are good that your loved ones will weigh in with recommendations. As a backup, consider asking for recommendations on your city or town social media pages. <h3>5. Formally compare venues and vendors </h3>Create a short list of venues and vendors based on the recommendations you&#39;ve received, and start contacting them to request quotes. Be ready to provide details about your wedding, such as the number of guests you&#39;ll have, potential dates, and the type of food you&#39;d like. These details will help prospective vendors come up with more accurate quotes, giving you more concrete details for your wedding budget.   <h3>6. Track expenses </h3>Go back to your rough estimate and determine if it&#39;s on track with the estimates you&#39;re getting. If not, make adjustments—just ensure that you won&#39;t be overextending yourself financially if you&#39;re on a tight budget. You&#39;ll want a bit of wiggle room in your <a href="https://www.theknot.com/content/wedding-budget-ways-to-save-money">wedding planning budget</a> in case unexpected costs come up.  Once you&#39;ve determined if your initial number aligns with the estimates, you&#39;ll want to start formally tracking costs. Fortunately, several tools are available to help you do this. You could rely on a simple spreadsheet, a general budgeting app, or a tool that allows you to specifically track wedding costs, such as WeddingWire&#39;s <a href="https://www.weddingwire.com/wedding-planning/wedding-budget.html">free</a><a href="https://www.weddingwire.com/wedding-planning/wedding-budget.html"> wedding spend tracker</a>. <h3>7. Update as needed </h3>While it might feel satisfying to come up with cost estimates based on real quotes, you&#39;ll need to tweak those numbers as you finalize the details of your big day. Your actual expenses may be higher or lower, and unexpected costs might also arise. Accounting for those changes will help you stay on track and avoid derailing your wedding planning budget.  <h2>What&#39;s a good wedding budget? </h2>Your wedding budget will be subjective based on your preferences for your big day. That said, we&#39;ve outlined some common expenses below, and provided an estimate of wedding budget percentages for each. This example assumes you&#39;ve allocated approximately $25,000 for your big day.  Note that this is just a starting point, and your actual costs will vary depending on your unique situation.   <table><tr><td>Expense </td><td>Percentage of Budget </td><td>Approximate Cost (with $25,000 budget) </td></tr><tr><td>Venue and catering </td><td>40% </td><td>$10,000 </td></tr><tr><td>Furniture rental </td><td>10% </td><td>$2,500 </td></tr><tr><td>Photography </td><td>10% </td><td>$2,500 </td></tr><tr><td>Flowers and decor </td><td>10% </td><td>$2,500 </td></tr><tr><td>Bride and groom attire </td><td>10% </td><td>$2,500 </td></tr><tr><td>Hair and makeup </td><td>2% </td><td>$500 </td></tr><tr><td>Cake </td><td>2% </td><td>$500 </td></tr><tr><td>Stationary/invitations </td><td>2% </td><td>$500 </td></tr><tr><td>Party favors </td><td>2% </td><td>$500 </td></tr><tr><td>Transportation </td><td>2% </td><td>$500 </td></tr></table><h2>How to pay for your wedding </h2>If you&#39;re like many couples, you might choose to pay for a portion of your wedding using savings. However, if you don’t have a specific wedding fund set up, you could end up draining your savings completely.   A <a href="https://www.lendingclub.com/personal-loan/wedding-loan">wedding loan</a> is another alternative if a credit card doesn&#39;t feel like the best choice. These <a href="https://www.lendingclub.com/personal-loan">personal loans</a> typically have fixed rates that may be lower than a high-interest credit card.     <h2>The bottom line </h2>Whether you’re envisioning a casual party or a lavish, big-budget production for your wedding, it’s wise to start with a financial plan. A wedding budget breakdown can help make your dream a reality. Aside from keeping costs in line, your budget can act as a blueprint for everything needed to make your big day unforgettable—including how you choose to cover the cost.

Credit cards are a widely accepted, convenient form of payment, but they come with potential drawbacks like high interest rates and fees when not used responsibly. 

Credit cards can offer a convenient way to pay for everyday purchases, like groceries, and come handy in an emergency. While it’s easy to get excited about the convenience and perks credit cards can provide, it’s also important to be aware of the potential risks of overspending and high interest charges. Understanding the advantages and disadvantages of credit cards can help you decide if a credit card makes sense for you.[1]   <h2>What are the pros and cons of credit cards? </h2>To determine whether using credit cards is the right move for you, here’s a closer look at some of the top credit card pros and cons.  <table><tr><td>Top 5 credit card pros </td><td>Top 5 credit card cons </td></tr><tr><td>Convenient payment method </td><td>Potential for overspending </td></tr><tr><td>Good way to build credit </td><td>Usage may negatively affect credit scores </td></tr><tr><td>No interest when monthly balance is paid in full by the due date</td><td>Potential high interest rates   </td></tr><tr><td>May offer fraud protection on unauthorized purchases  </td><td>May charge fees </td></tr><tr><td>Potential for rewards, discounts, or cash back </td><td>Credit limits vary </td></tr></table><h2>Pros of using credit cards</h2>There are a lot of reasons to consider using credit cards in your everyday life. Here are some of the more prominent benefits of using credit cards that can add value to your financial life. <h3>Convenient payment method </h3>There was a time when cash was king, and it was difficult to use credit cards. Now, the opposite is true. If you use a credit card for a good chunk of your spending, you don’t have to worry about always having cash on hand, and you can even add your credit card to a digital wallet for additional convenience. And if you travel, you don’t have to worry about finding an ATM or converting your currency as long as the local merchants accept your credit card’s payment network.[1] <h3>Good way to build credit </h3>One of the keys to building solid credit is a history of on-time payments, and prudent use of a credit card is an easy way to do that. In fact, if you use a credit card for modest purchases each month, keeping your balance relatively low compared to your credit limit, and then pay off the balance in full by your monthly due date, you can build credit without paying interest charges.[2] <h3>No interest when monthly balance is paid in full </h3>Credit card interest rates can make the cost of borrowing expensive—and <a href="https://www.lendingclub.com/resource-center/personal-loan/apr-vs-interest-rate-whats-the-difference">interest charges</a> can add up quickly. For some credit cards, if you pay off your balance in full by the due date each month, you won’t be charged interest. To avoid getting caught in a cycle of debt with high interest costs, only put charges on your credit card that you know you can pay off at the end of the cycle.   Paying off a charge immediately after using the credit card can also help you avoid interest. For example, if you regularly spend $50 on your rewards card to fill up your gas tank, transfer a $50 payment to such credit card immediately from your checking account.[3]   <h3>Fraud protection on unauthorized purchases </h3>Most major credit card issuers offer zero-liability protection on unauthorized charges. If you spot and dispute unauthorized charges before you pay your monthly bill, you may withhold payment for the disputed charge as long as the dispute is upheld. Also, credit card technology has improved to the point where if you use your card’s chip or tap to pay, the transaction is encrypted to help prevent hackers from stealing your card information.[4] <h3>Potential for rewards, discounts, or cash back </h3>Many credit card companies frequently offer rewards with every purchase you make, or on certain types of purchases. Depending on the rewards program, you could get cash back, or you could earn points or miles and redeem them in a variety of ways, such as travel, gift cards, online shopping, and more.  Some credit cards also offer sign-up bonuses to new cardholders after you meet a minimum spending requirement. You might even receive additional perks, such as cell phone protection, travel insurance, travel or dining credits, and more.[5]  <h2>Cons of using credit cards </h2>While there are some clear benefits to using credit cards, there are also some inherent risks that can damage your credit and threaten your financial well-being. Here’s what to consider. <h3>Potential for overspending </h3>It can be tempting to put a purchase on your credit card, however it’s still important to budget for the expense and be sure you can pay your bill in full to avoid interest. If you’re prone to overspending, you could end up spending more than you can afford to pay back or rack up costly interest charges.   <h3>Usage may negatively affect credit  </h3>How you use your credit cards plays a large role in your credit score calculations. In particular, your <a href="https://www.lendingclub.com/resource-center/personal-finance/what-is-credit-utilization-and-how-to-improve-it">credit utilization rate</a> is one of the most influential factors in your FICO score. This rate is calculated by dividing your card’s balance by its credit limit, and it’s done for each individual card, as well as for all of your accounts.  For example, if you have a $2,500 balance on a credit card with a $10,000 limit, your utilization rate on that card is 25%. If you have three credit cards with a combined balance of $6,000 and a combined limit of $15,000, your credit utilization rate for all accounts is 40%.  Generally, a lower credit utilization is better for your credit versus a higher one. If your utilization rate gets too high, it could negatively impact your credit score until you pay down the balance. This can even be true if you pay your bill in full every month, so keep an eye on your balances and consider using your cards less or making multiple payments throughout the month to keep your credit utilization rate low.[2] <h3>High interest rates </h3><a href="https://www.lendingclub.com/resource-center/personal-loan/signs-you-have-too-much-credit-card-debt">Carrying credit card debt</a> can be expensive thanks to high interest rates. Since 2022, average credit card rates have reached a record of high 21.76%, according to the <a href="https://www.newyorkfed.org/microeconomics/hhdc">Federal Reserve</a>. Data from a recent <a href="https://ir.lendingclub.com/news/news-details/2024/Nearly-50-of-Americans-Unaware-Federal-Interest-Rate-Hikes-Raised-Their-Credit-Card-APR-by-Over-5-Percentage-Points/default.aspx">LendingClub Bank study</a> reports that almost half (47.1%) of Americans are unaware of the current APR on their credit cards, and 49.5% are unaware that their credit card APR automatically rose by over 5 percentage points following the Federal Reserve’s rate increases between March 2022 and July 2023. When using a credit card, it’s important to pay your balance in full by the due date every month to avoid paying interest. Carrying debt can limit your opportunity to achieve your other financial goals.  <h3>May have fees  </h3>Some credit cards have annual fees, which can range from around $50 a year to several hundred dollars. For example, certain travel cards have annual fees of $500 or more. While this type of rewards card may come with many perks for frequent travelers, it may be a waste of money for some. If you don’t pay your bill on time, you may also be hit with a penalty late fee and a higher interest rate. Credit card issuers may charge fees for other services like balance transfers or cash advances. It’s important to understand what fees a credit card has before applying, so be sure to read the fine print when researching cards.[6] <h3>Credit limits vary  </h3>The amount you’re able to charge on your credit card depends on your credit limit. Credit card limits are set when you first open the card. People with <a href="https://www.lendingclub.com/resource-center/personal-finance/what-is-a-good-credit-score-and-how-to-boost-yours">good credit</a> generally qualify for higher credit limits than those with poor credit—and the difference can be thousands of dollars.  For instance, if you’re new to credit or working on rebuilding your credit, your credit card could have a spending limit of just a few hundred dollars, compared to someone with excellent credit who may have a $10,000 limit. If you demonstrate a solid payment history and keep your spending in check, you may be able to request a credit card limit increase. However, in some cases, your credit limit could be reduced if you rarely use the card or your credit situation changes.[7]  <h2>What else to consider about credit cards </h2>When used responsibly, credit cards can provide a lot of value, and you may even be able to avoid some or all of the potential drawbacks. However, if you’re concerned about going into debt or paying unnecessary fees and interest, they might not be worth it. Before applying, take the time to consider why you want a credit card and how using one might affect your financial well-being.  Think carefully about your situation, spending habits, and preferences to determine the right path for you. Spend time considering whether a credit card is a financial tool that makes sense for you. Evaluating credit card issuers, rewards programs and perks, and how the card can help move you toward your financial goals is a key part of making the right decisions for your wallet. <h2>The bottom line  </h2>Like most financial tools, credit cards aren’t inherently good or bad. Used properly, they can help you build a strong credit profile and give you access to appealing perks and rewards. On the other hand, they can lead to overspending, excessive interest charges, and potential damage to your credit score.  If you decide to use credit cards, be mindful of your usage and be diligent about reviewing your spending. Your vigilance can help you enjoy the benefits while limiting the risks. And If you’ve built up more debt than you can handle, a personal loan may help you <a href="https://www.lendingclub.com/personal-loan/credit-card-consolidation-loan">consolidate your credit card debt</a> and save you money on interest over time.    <hr/><ol><li><a href="https://www.fdic.gov/system/files/2024-06/ch2.pdf">FDIC</a>. “Credit Cards - General Overview.” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-and-keep-a-good-credit-score-en-318/">Consumer Financial Protection Bureau</a>. “How do I get and keep a good credit score?” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/how-does-my-credit-card-company-calculate-the-amount-of-interest-i-owe-en-51/">Consumer Financial Protection Bureau</a>. “How does my credit card company calculate the amount of interest I owe?” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/am-i-responsible-for-unauthorized-charges-if-my-credit-cards-are-lost-or-stolen-en-29/">Consumer Financial Protection Bureau</a>. “Am I responsible for unauthorized charges if my credit cards are lost or stolen?” </li><li><a href="https://www.consumerfinance.gov/data-research/research-reports/issue-spotlight-credit-card-rewards/">Consumer Financial Protection Bureau</a>. “Credit Card Rewards.” </li><li><a href="https://www.consumerfinance.gov/about-us/newsroom/cfpb-bans-excessive-credit-card-late-fees-lowers-typical-fee-from-32-to-8/">Consumer Financial Protection Bureau</a>. “CFPB Bans Excessive Credit Card Late Fees, Lowers Typical Fee from $32 to $8.” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/why-did-i-get-a-low-credit-limit-on-a-credit-card-en-11/">Consumer Financial Protection Bureau</a>. “Why did I get a low credit limit on a credit card?” </li></ol>

Wondering when to teach kids about money? Here's a helpful guide for every age group, from toddlerhood to early adulthood.

According to the <a href="https://www.moneyconfidentkids.com/content/dam/mck/pdfs/2022_Final_PKM_Deck_2022_Update.pdf">2022 T. Rowe Price Parents, Kids &amp; Money Survey</a>, over half of American parents are reluctant to talk to their kids about money. So if you&#39;re struggling with this, you aren&#39;t alone. However, getting comfortable discussing money with your children will help them build a stronger financial foundation—and it could also help you develop more positive views about money.     Here&#39;s when to <a href="https://www.lendingclub.com/resource-center/personal-finance/financial-lessons-to-teach-teens-before-they-graduate-high-school">teach kids about money</a> and actionable strategies for doing so, no matter your child&#39;s age. <h2>When to teach kids about money </h2>You might be surprised to find out you can start teaching your child about money in toddlerhood, and your lessons can carry through to their teen years—and hopefully into adulthood. Here are some tools and strategies for teaching your kid about money at any age.   <h3>Ages 2–5 </h3>They may not yet understand the value of money or why you can&#39;t afford an expensive toy at the store, but you can teach younger kids about exchanging cash for goods and services.   Playing store or restaurant is a fun and engaging way to help toddlers start to understand commerce. You can use real goods like cereal boxes or cans, or opt for a toy cash register and products or foods. Asking about prices can teach kids the concept of costs, even if, at first, they think an apple is worth $100.  While preschool-age children will enjoy playing store or restaurant, they can also help trace and identify coins or clip coupons before a grocery store or shopping trip. Just ensure you supervise, so they don&#39;t put coins in their mouth. <h3>Ages 6–8 </h3>Kids learn math concepts like addition, subtraction, and money identification in their earliest school years. As you help with homework or reinforce these concepts outside of school, you can bring money into the discussion. Consider having them play with real coins (or play money if you have it), and introduce how to add and subtract money.   For instance, you might start by counting coins, then have your child add up different combinations of coins to make a dollar. If you have several coins lying around, you could also have your child collect them and bring them to the bank to cash in for paper money.    It can also be smart to introduce a <a href="https://www.lendingclub.com/resource-center/personal-finance/should-you-give-your-kids-an-allowance">monetary allowance</a> at this age, and consider discussing the concepts of saving and spending. Your child can earn their allowance by doing chores, or you could simply choose to give them some money each week, allowing them to save for something they really want.2  If giving an allowance is out of budget, there are still ways to teach the foundations of earning and saving. For example, you might use marbles as currency, and create a system where a certain number of marbles earns treats—like extra screen time or a scoop of ice cream.  <h3>Ages 9–11 </h3>By age 9, your child may understand the concept of money fairly well. Chances are they&#39;ve watched you pay at checkout countless times, overheard family financial discussions, and browsed for toys and other items online. And if they earn an allowance, they likely have basic knowledge of working for their money.   Opening a custodial savings account and teaching kids about banking can be smart strategies for kids in this age bracket. Note that your child won&#39;t be able to open a new custodial savings account on their own; instead, you&#39;ll need to open it on their behalf. You can work together on:  <ul><li>Making regular deposits from their allowance into their savings account. </li><li>Routinely logging into their account online to review their balance and transaction history. </li><li>Helping them understand what happens to their savings balance if they withdraw money.  </li></ul>This is also a good time to teach your children about the basics of <a href="https://www.lendingclub.com/resource-center/personal-loan/compound-interest-vs-simple-interest-whats-the-difference">earning interest</a>. Explain that the bank gives account holders a special reward for saving money, and show them how much interest they earn on their balance in a given month.3 <h3>Ages 12–15 </h3>Kids in this age bracket are old enough to start learning about investing using a kids app or a custodial account. Introduce the concept of investing, what it entails, how to do it, and what the purpose of investing is. Explain that you can earn or lose money on investments, and discuss the risks of common investments like company stocks, exchange-traded funds (ETFs), and bonds.  By using investment tools while they&#39;re still under your roof, you can instill in them the importance of putting money away so that it works for them in the future. This could give your child an edge when they enter the workforce as a young adult and start putting money into a workplace retirement account.4 <h3>Ages 16–18 </h3>Many teens start driving at 16, so it&#39;s an ideal time to teach your child about real-life expenses. For example, by walking them through the true costs of car ownership—including monthly loan payments, insurance, gas and maintenance—they can have a better understanding of how to budget and save for a car of their own some day.5  If your teen doesn&#39;t drive or have a car, you can teach similar concepts by having them contribute to their phone or phone plan. Though many kids share their parents&#39; accounts, having to pay a set amount each month puts their <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions">budgeting knowledge</a> into practice. You could even siphon that money into a separate account and give it to them after their high school graduation.   Besides applying budgeting concepts to real life, this is a great age to teach your kids about <a href="https://www.lendingclub.com/resource-center/personal-finance/what-affects-your-credit-scores">credit score</a>. Start by explaining what building credit means, why it&#39;s important, and how to do it. <h2>The bottom line </h2>No matter your child&#39;s age, you can start teaching them important financial lessons, either through play or real-life activities. Teaching your child about money helps build financial literacy and understand their <a href="https://www.lendingclub.com/resource-center/personal-finance/do-you-know-your-financial-values">financial values</a>, which can give them an edge when they become adults. Ideally, they&#39;ll carry the knowledge you&#39;ve given them about saving, budgeting, and investing through their lives, making them more likely to reach their financial goals. <hr/><ol><li><a href="https://files.consumerfinance.gov/f/201501_cfpb_digest_financial-well-being.pdf">Consumer Financial Protection Bureau</a>. “Financial well-being: What it means and how to help.” </li><li><a href="https://greenlight.com/learning-center/earning/average-allowance-by-age-for-kids">Greenlight</a>. “Average allowance by age for kids and teens.” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-loan-interest-rate-and-the-apr-en-733/">Consumer Financial Protection Bureau</a>. “What is the difference between a loan interest rate and the APR?” </li><li><a href="https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/">Consumer Financial Protection Bureau</a>. Discovering the benefits of investing early.” </li><li><a href="https://files.consumerfinance.gov/f/documents/cfpb_building_block_activities_discovering-benefits-investing-early_guide.pdf">Consumer Financial Protection Bureau</a>. “Budgeting: How to create a budget and stick with it.” </li><li><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-credit-report-and-a-credit-score-en-2069/">Consumer Financial Protection Bureau</a>. “What is the difference between a credit report and a credit score?” </li></ol>

From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a new browser extension that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.

From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a <a href="/member-benefits/stackit/install?utm_source=Internal&utm_medium=Blog&utm_campaignid=stackit_launch">new browser extension</a> that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.<h2>Limited Time Offer to Double Your Cash Back Through 12/31/22</h2>Stackit is a free, new cash back and rewards program available to personal loan members that’s easy to download and install. Eligible members can activate their favorite offers with one click to start saving while stacking cash back offers with existing loyalty program rewards at eligible stores.“We’re relentless when it comes to giving customers more, and Stackit is a perfect example of this,” said Amber Carroll, SVP of Membership and Lifecycle Marketing. “Stackit appears as you shop so it’s easier to activate. You can redeem your cash back for gift cards from hundreds of online stores. And you can continue accumulating loyalty points from merchants and rewards from credit cards while we stack coupon savings and cash back earnings on top of all of it,” she said. “Stackit demonstrates our promise to help members make smart money moves that are both easy and rewarding.”To celebrate the new Stackit rewards program, LendingClub is offering its personal loan members double the cash back on eligible purchases made now through the end of the year. To start earning and stacking rewards, eligible members can simply <a href="/member-benefits/stackit/install?utm_source=Internal&utm_medium=Blog&utm_campaignid=stackit_launch">add the new Stackit Extension</a> to their browsers—doubling their earnings for a limited time through 12/31/22.* Cash back can be redeemed for e-gift cards through the Earnings Dashboard.<h2>New Name, Better Rewards</h2>Earlier this year, LendingClub soft-launched its exclusive member rewards program as a separate Chrome browser extension test that was made available to a small subset of customers. Drawing from these learnings,Stackit is LendingClub Bank’s new and improved rewards program featuring a new extension, expanded browser availability, and enhanced account integration that is rolling out to a wider member audience beginning in November.Currently, any LendingClub personal loan member can download and start using the new Stackit browser extension. (Users of the old LendingClub Chrome Extension can continue earning cash back through 11/30/22; any amount remaining in users’ accounts after 11/30 will automatically be paid out via PayPal. Members are advised to add the new Stackit Extension to continue earning cash back and rewards, including double cash back, on future purchases.) In addition to Chrome,Stackit expands browser availability to Safari and Edge, and enables members to view recent transactions and cash back earnings inside their LendingClub account instead of a third-party site. Planned rollouts to LendingClub members with Auto, Deposit, and other accounts beyond personal loans are expected, however, timing is still under consideration.*Double Cash Back Offer on eligible transactions expires 12/31/22. See <a href="/legal/terms-of-use">Terms of Use</a> for full details. Offer is subject to change without notice.Stackit is a non-deposit product offered by LendingClub Bank.

Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals. 

Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals. However, recent <a href="https://www.fdic.gov/analysis/household-survey/">FDIC research</a> shows approximately 7.1 million Americans are “unbanked,” meaning they do not have a basic checking or <a href="/personal-savings">savings account</a>.<h2>Being Unbanked Increases Costs for Families</h2>Reasons for being unbanked (and underbanked) vary from not having enough money to meet a minimum balance and high or unpredictable fees, to having a history of credit, ID, or banking problems, and/or a general distrust of financial institutions.As a result, this drives unbanked individuals to expensive, alternative financial outlets—such as check cashers, payday lenders, and pawn shops that charge high fees for financial products and services—to manage their money. Such fringe financial “solutions” hold people back from making meaningful financial progress, many of whom are living on low incomes and, likely, already struggling to make ends meet. Without a <a href="/personal-checking/rewards-checking">checking account</a>, these families wind up overpaying for basic financial transactions, making it difficult for them to build savings and assets over time.<h2>More Rewarding Banking for More People</h2>In light of this, we’re proud to share that recent improvements to LendingClub Bank’s <a href="/personal-checking/rewards-checking">award-winning Rewards Checking</a> has earned us official certification by the national Cities for Financial Empowerment Fund as meeting the BankOn National Standards for trust and affordability for consumer transactional accounts.Key features of our award-winning Rewards Checking account include:<h3>Low Minimum Opening Balance</h3><ul><li>Access Rewards Checking with an opening deposit of only $25</li><li>Freedom from Fees Save more of your hard-earned money with no overdraft, monthly maintenance, and incoming wire transfer fees1</li></ul><h3>Unlimited Cash Back</h3><ul><li>Earn <a href="/personal-checking/rewards-checking">unlimited 1% cash back</a> on Qualified (signature-based) Purchases when using your Rewards Checking debit card2</li></ul><h3>Free ATM Access</h3><ul><li>Enjoy <a href="/help/checking-accounts-faq/how-do-i-earn-atm-rebates-on-my-checking">ATM access with no LendingClub ATM fees</a>, plus get unlimited ATM fee rebates on fees charged by other banks3</li></ul><h3>Get Your Paycheck Early</h3><ul><li>Set up direct deposit into your account and you could be eligible to receive your money up to 2 days earlier4</li></ul><h3>Earn Interest</h3><ul><li>Earn an APY that’s more than the national average with account balances of at least $2,5005</li></ul><h3>FDIC Insurance</h3><ul><li>Rest easy knowing your deposits are FDIC-insured up to the maximum amount allowed—$250,000 per depositor for each ownership category</li></ul><h3>Best Online Experience</h3><ul><li>Based on our easy-to-use mobile app and award-winning <a href="/personal-checking/rewards-checking">online checking account</a>, NerdWallet named us Best Bank or Credit Union for Online Experience</li></ul><h2>What Our Members Say</h2>It’s important knowing we’re offering products and services that are helping to improve the financial lives and stability of all Americans, including unbanked and underbanked individuals and families, in every community across the United States.Here’s what some of our members have to say about their Rewards Checking experience with LendingCLub Bank:“I never knew how much money I was losing with my old bank whenever I used an ATM. [LendingClub Bank] reimburses fees from ATM’s and now I look forward to getting the cash back every month.”Robin, a LendingClub Bank Member“The rewards checking account with cash back every month has helped me ditch my credit card and debt.”Lauren, a LendingClub Bank MemberRead more member reviews.<h2>Your Financial Well-Being Matters to Us</h2>At LendingClub Bank, making <a href="/personal-checking/rewards-checking">checking accounts</a> more rewarding for more people is an example of our belief that financial well-being should be attainable for everyone—not just for those who can afford it. Everything we do is centered around empowering our members to meet their personal financial goals by enabling access to a broad range of financial products, services, and educational resources, all designed to help them pay less when borrowing and earn more when saving. Testimonials reflect the real-life experiences of individuals who used our products; however, individual results may vary.<hr/><h4>Terms and Conditions</h4>Accounts subject to approval. $25 minimum opening deposit required. See Product Terms &amp; Conditions for additional details.1. Miscellaneous fees may apply. View Product Terms &amp; Conditions for complete details.2. The Debit Card Rewards Program (“Cash Back Rewards”) provides 1.00% cash-back on all Qualified Purchases using a debit card tied to an Eligible Account.Eligible Accounts are: Rewards Checking accounts that meet the following requirements for the calendar month in review:1). Maintain an average monthly balance of at least $2,500.00; or 2). Receives at least $2,500.00 in Qualifying Direct Deposits.Qualifying Direct Deposits are defined as: Recurring Automated Clearing House (ACH) credits, including payroll, pension or government payments (such as Social Security) made by your employer, or an outside agency. We may require documentation to verify that credits are Qualifying Direct Deposits. Qualifying Direct Deposits do not include peer to peer payments or ACH transfers (funds transfers) from your external accounts.Qualified Purchases are defined as: Signature-based purchases made using the debit card tied to an Eligible Account. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and is based on how the transaction is transmitted at the time of processing. Qualified Purchases do not include: (1) any goods or services purchased that are returned or otherwise credited to your Eligible Account; (2) unlawful purchases; or (3) purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Checks, gift cards, cryptocurrency, casino chips, peer to peer payments, prepaid debit cards, account openings, loan payments, or other cash equivalents). We may report the value of Cash Back Rewards to the IRS as required by law. Any client whose tax status would require us to impose tax withholding of any sort will not be eligible for Cash Back Rewards. Accounts are reviewed after the end of each month. Any earned Cash Back Rewards will be credited to your account on or before the 10th calendar day of the next calendar month. The Eligible Account must be open and active at the time the Cash Back Reward is credited.3. LendingClub does not charge a fee for using another bank’s ATM. Plus, get unlimited automatic ATM surcharge rebates for ATM fees other banks charge you. ATM surcharge rebates apply to cash withdrawals from a Rewards Checking account. ATM fees will be rebated at the end of each statement cycle. Excludes international exchange fees. LendingClub makes its best effort to identify those ATM fees eligible for rebate. In the event that you have not received a rebate for a fee you believe is eligible, please contact Customer Service at 800.242.0272. LendingClub reserves the right to modify or discontinue the ATM surcharge rebate program at any time. Out-of-network ATM fees cost $2.50 on average — source: CNBC as of 01/26/2022. If someone were to use an out-of-network ATM 6 times per month at an average fee of $2.50 per withdrawal, they would spend $180 in ATM fees in 12 months.4. Any account features that enable you to receive direct deposits, or that enable direct deposit funds to be made available to you early, are contingent upon and subject to the payor’s support of such features. 5. Annual Percentage Yield (APY) accurate as of 8/1/2022. Rate tiers are as follows: 0.00% APY applies to balances of $0.00–$2,499.99, 0.10% APY applies to the entire balance on balances of $2,500.00–$99,999.99, and 0.15% APY applies to the entire balance of $100,000.00 or more. Rates are variable and are subject to change, at the discretion of the bank and without notice, at any time after an account is opened. Fees may reduce earnings.

Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.

Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.As the leading digital marketplace bank in the U.S. built on the belief that innovative, creative solutions deliver more value and a better experience, we’re always looking for new ways to provide more. In early 2021, LendingClub became a bank holding company operating a national bank, allowing us to expand our products and level the playing field for everyone.  “Every day we help members leverage their money so they can earn more when saving and pay less when borrowing,” said Amber Carroll, Senior Vice President of Membership &amp; Lifecycle Marketing at LendingClub. “We&#39;re working to redefine banking, which means ensuring our interests are well aligned with those of our members and introducing new ways to better serve their needs.” Since the beginning of the pandemic, how we work, live, and manage our finances has evolved in ways most of us would never have imagined. Increasingly, more Americans across varying credit profiles are struggling to stretch their dollars between paychecks. According to a recent survey from LendingClub and PYMNTS, even among workers earning more than $100,000 per year nearly half are living paycheck to paycheck.  At LendingClub, we’re inspired every day by our members who continue to strive for financial well-being during these unprecedented times—such as by consolidating their credit card debt into a single, more manageable payment, refinancing their auto loan to free up room in their budget, or taking advantage of a CD or high-yield savings account to invest in their future. The Club is working hard to help members reach their goals and we’re incredibly proud to help simplify their path. As one of member recently shared: “This is the third time I have utilized LendingClub&#39;s great rates and lending plans to assist with home repairs and debt consolidation. Their application and payment processes are quick and simple to use. I have saved so much time and money using this funding!” — Christine, a member from Texas We believe everyone deserves a better financial future. If you’re ready to improve your financial well-being and are not already a member of the Club, we can help. From banking smarter with your <a href="/personal-deposits/online-banking">personal checking and savings</a>, to working toward larger financial goals—like <a href="/personal-loan">consolidating debt</a>, <a href="/auto-refinancing">refinancing an auto loan</a>, or making home improvements—you can easily check your rate for a personal loan in minutes, with no impact to your credit score. Thanks again to all of our members for helping us achieve this incredible milestone.

In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. 

In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. During the webinar, Anuj Nayar, our Financial Health Officer, discussed:<ul><li>Our journey to get to where we are today </li><li>Lessons learned from our 15-year history as a fintech pioneer</li><li>How we’re leveraging our digital marketplace bank to further our mission to help Americans on their path towards financial health</li><li>We recently reported Q4 2021 and year-end earnings</li><li>New data on the financial health of U.S. consumers from our latest Paycheck-to-Paycheck report</li></ul>A historic milestone, as one of the first fintech company to acquire a national bank we’ve paved the way for other fintechs to follow suit. With 15 years under our belt, more than 3.9 million members, and over $70 billion in loan originations, the marriage of LendingClub’s marketplace fintech business with all the benefits of being a bank is fundamentally changing the nature of our business and influencing change across the banking industry as a whole. We’re also creating something new for our members -- a bank that puts the customer at the center of what we do. <a href="https://vimeo.com/686043451">Check out the video below to learn more.</a>

LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  

LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  This includes our yacht loan business. Yacht loans are simply not in line with our mission to help everyday Americans on their path to financial health and we plan to grow our auto refinance business to take its place.  During the review, we also thoroughly examined relationships and operating activities for the fintech partners. As a result of our review, we are asking certain partners to modify their activities and/or operations to match expectations and contractual commitments, and we have begun exiting certain partners. As part of the ongoing dialogue with these partners, we have discussed transition plans or operational changes that could impact the services available to these partners and their customers.   As a pioneer in this space, we have a unique perspective. We operated for 15 years as a fintech with a partner bank model and now we operate as a fintech, a bank, and a partner bank. We work hard at LendingClub to maintain and build a robust, secure, compliant and scalable enterprise. We are guided by our core values, our extensive experience, our deep data set and technology investments, and governed by strong controls, to deliver on behalf of our members, communities, shareholders, partners, and team members.  These business model changes will have no material effects on our business operations and we plan to report more details when we issue our Full Year 2021 and Q4 earnings in a few weeks. Scott Sanborn CEO  LendingClub<hr/>Safe Harbor StatementSome of the statements above, including statements regarding  the effect on our business operations as a result of the business model changes, are &quot;forward-looking statements.&quot; The words &quot;anticipate,&quot; &quot;believe,&quot; &quot;estimate,&quot; &quot;expect,&quot; &quot;intend,&quot; &quot;may,&quot; &quot;outlook,&quot; &quot;plan,&quot; &quot;predict,&quot; &quot;project,&quot; &quot;will,&quot; &quot;would&quot; and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward-looking statements include those factors set forth in the section titled &quot;Risk Factors&quot; in LendingClub&#39;s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each as filed with the Securities and Exchange Commission, as well as in LendingClub&#39;s future filings made with the Securities and Exchange Commission. LendingClub may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in forward-looking statements. LendingClub does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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{noun} A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.

A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.<h2>What is Revolving Credit?</h2>Revolving credit is a type of credit that lets you borrow money as needed up to an amount called your credit limit. Borrowing reduces your available credit, and repayment replenishes your credit limit (minus the interest and fees charged). Revolving credit does not have a fixed number of payments. This differs from installment credit which lets you borrow a lump sum and pay it back over a set number of fixed monthly payments.<h2>How Does a Revolving Line of Credit Work?</h2>It helps to think of a revolving line of credit as a renewable source of funds within a set credit limit. The lender sets the credit limit upon application approval. You can use as much of your credit limit as you need, paying interest only on the money you borrow. As you repay what you’ve borrowed (plus interest and fees), your available credit replenishes, and you can continue borrowing against your revolving line up to the credit limit.<h3>Types of Revolving Credit</h3>The most common revolving credit products are lines of credit and credit cards.Lines of credit come in different forms, including home equity lines of credit (HELOCs), personal lines of credit, and business lines of credit. Credit lines are typically issued by banks and credit unions, and generally you can draw on your line using special checks, ATM, telephone, and online banking. You’ll only pay interest on the money borrowed from your line of credit. Some lines of credit may be limited in how the funds can be used, such as only for balance transfers from credit cards.Credit cards are revolving credit accounts that, unlike lines of credit, require you make a purchase or cash advance to access your credit line. While card issuers reserve the right to change your credit limit, you can access your available credit as long as your account is in good standing. When you make purchases on a credit card, you can repay the balance in full by the end of your billing cycle to avoid interest charges and fees. If you don’t pay your outstanding balance in full,the balance “revolves,” or rolls over, to the next month and will accrue interest until paid in full. Note: Both lines of credit and credit cards can be secured or unsecured. Secured accounts require collateral; unsecured accounts do not. For example, a HELOC uses your home as collateral. Credit cards are typically unsecured, but some secured cards require cash deposits as collateral.<h3>Why is Revolving Credit Important?</h3>Revolving credit offers greater borrowing flexibility than installment credit. For instance, if you get a $10,000 installment loan for a home remodeling project, you typically receive all the money at once and must start repaying on the entire loan balance immediately plus interest on that amount—even if you don’t use the funds right away. If you need more money, you’ll have to apply for a new loan.On the other hand, if you get a line of credit or credit card with a $10,000 limit, you can draw on it as needed—say, $1,000 in January, $2,000 in April and $1,500 in June­—and interest will accrue only on the amounts you borrow. As you pay back what you’ve borrowed, your available credit is restored up to your credit limit, so you can make future purchases without needing to apply for additional credit.Since it doesn’t require fixed monthly payments, revolving credit can also offer greater payment flexibility than installment loans. If money is tight in a particular month, you have the option of only making the minimum payment on a revolving account, potentially making it easier to meet other financial obligations.Revolving credit can also serve as a financial cushion. Even if you never use it, it’s there in case you need quick access to small amounts of cash in an emergency.<h3>What Are the Risks of Revolving Credit?</h3>Revolving credit has some drawbacks you should be aware of.Collateral risk: If you fail to make payments on a secured revolving credit account, you could lose your collateral. With a secured credit card, that loss could be a few hundred dollars. With a HELOC, you stand to lose your home.High interest rates: Revolving credit typically has higher interest rates than installment credit. Interest rates for most credit cards and many lines of credit are also variable, meaning they can change over time based on economic conditions.Excessive debt: If you only make the minimum payment on a credit card, you could accumulate a large balance. Credit card interest is typically compounded, meaning interest accrues on both the balance of your purchases and on previously applied interest. Compound interest can cause your balance to snowball until it’s difficult to pay down.<h3>How Does Revolving Credit Affect Your Credit Score?</h3>Revolving credit could help your credit score in several ways.<ul><li>On-time payments: Making revolving credit payments on time could boost your credit, since timely payments are a major factor in your FICO® Score.</li><li>Responsible credit utilization: Keeping your revolving credit balance below 30% of your credit limit could increase your credit score. Ideally, you would pay your credit card balances in full each month.</li><li>Diverse credit mix: A variety of accounts, including installment credit and revolving credit, could show lenders you can successfully manage different types of debt.</li></ul>Revolving credit could also have negative impacts on your credit score when not managed responsibly. Late payments: Missing payments could have a significant negative impact on your credit score. Setting up auto-payments on your revolving credit accounts can help ensure you never miss a due date.Excessive credit utilization: Consistently carrying balances that exceed 30% of your available credit limit can reduce your credit score. Hard inquiry: When you apply for revolving credit, creditors perform a credit check called a hard inquiry, which could cause a small, temporary dip in your credit score.

{noun} The total annual cost to borrow money, including fees, expressed as a percentage.

<h2>What is Annual Percentage Rate (APR)?</h2>Annual percentage rate (APR) is the cost of borrowing money on an annual basis. APR is expressed as a percentage, to make it easier to compare the cost of credit. APR and interest rate are sometimes used interchangeably, however, APR and interest rate are different. APR includes both interest plus fees applied over the course of a loan. Because APR is a more complete measure of the cost of credit, it is usually higher than the interest rate.<h2>How is Annual Percentage Rate Calculated?</h2>To calculate APR on a loan, you’ll need to know a few other numbers first:Interest: The total interest charges paid over the life of the loan, also known as the cost of borrowing money.Fees: Review the terms and conditions of the loan to find the fees that apply to your loan. Fees vary by loan type and lender. Principal: The original loan amount.Days in the Loan Term (n): Since APR measures the annual cost of borrowing money, multiply 365 (days) by the number of years in the loan term. For loan terms under one year, use the number of days.The formula to calculate APR is: <img src="//images.ctfassets.net/orqped9h4wgz/6cJEgR4ftSGoIaSuKLlek6/a3ce252e07839182be4e7550cd09e08a/Formula-Calculate-APR.png" alt=""/>The steps to calculate APR are:<ol><li>Find the interest charges</li><li>Add the fees</li><li>Divide the sum by the principal balance</li><li>Divide by the number of days in the loan’s term</li><li>Multiply by 365</li><li>Multiply by 100</li></ol><h3>Credit Card APRs</h3>Credit card APRs do not reflect fees and since a credit card has no set loan amount or fixed repayment term, its APR is simply its interest rate.Under the Truth in Lending Act, passed in 1968, lenders and other financial institutions must disclose APR when offering credit. <h2>Why is Annual Percentage Rate Important?</h2>Knowing the annual percentage rate helps you understand the true cost of borrowing. For example, all lenders are required to disclose APR, which makes it easier to compare loans from different banks and make a more informed borrowing decision.<h2>Are There Different Types of APRs?</h2>There are different categories of APRs depending on the type of financial product.<h3>Credit Card APRs</h3>Credit cards have several APRs that may apply to different transactions or account activities.<ul><li>Purchase APR: The rate you pay for purchases. </li><li>Balance transfer APR: The rate applied if you use a card to pay down balances on other credit cards or loans. </li><li>Cash advance APR: The rate charged on ATM withdrawals or cash-equivalent transactions, like money-order purchases. </li><li>Introductory APR: A promotional interest rate for a limited period of time that is lower than the card&#39;s regular APR, sometimes as low as 0 percent APR.</li><li>Penalty APR: A higher-than-normal rate that results from violating a card’s terms of service. </li></ul><h2>What’s the Difference Between Fixed and Variable APRs?</h2>APRs can be fixed or variable. A fixed APR remains unchanged for the life of your loan. A variable APR fluctuates in sync with a published market index, like the U.S. Prime Rate. <h3>Adjustable-Rate Mortgages</h3>Home loans with variable interest rates are called adjustable-rate mortgages (ARMs). With an ARM, your APR is fixed for an initial term (typically one, three, or five years, but sometimes as long as 10 years), then resets every six or 12 months, based on market rates. <h2>What Affects APR?</h2>The APR you&#39;re offered depends on a few factors: <ul><li>Whether a loan or line of credit is secured or unsecured</li><li>Current economic conditions</li><li>Your credit history</li></ul>Lenders may also consider your income and assets, down payment, and where you live when determining your APR.<h2>How Do You Get a Good APR?</h2>Getting the best APR on a loan or credit card typically requires shopping around. Start by prequalifying with multiple lenders. Prequalifying is a quick process where you provide some basic information about your income and borrowing goal. Then, lenders respond with a preliminary, non-binding estimate of the loan amount and APR. This is typically done through a soft credit check, which doesn’t impact your credit.Then, compare the preliminary offers and submit a full application to your lender of choice. With your detailed financial information and a hard credit inquiry, which will impact your credit, lenders can make a formal loan offer that includes your APR, fees, and repayment terms. If you’re unhappy with the terms you’re offered (or if lenders decline your applications), your credit history might be the culprit. If this is the case, you can work to pay down your existing debts and bring late payments current, which can improve your credit score and chances for approval over time.

{noun} The amount of unpaid interest that has accumulated as of a specific date, either on a loan or an interest-bearing account or investment. 

<h2>What Is Accrued Interest? </h2>Accrued interest is the amount of unpaid interest that has accumulated as of a specific date, either on a loan or credit card you’re repaying or on an interest-bearing account or investment.   Accrued interest can be owed or earned. For example, with a loan or credit card, it’s the amount of interest (payment you owe) that has been incurred since you made your last payment. With an interest-bearing account or an investment, such as a bond, it&#39;s the interest (income you earned) that has accumulated since the last time you received a payment from the financial institution or bond issuer. <h2>How Does Accrued Interest Work? </h2>The way accrued interest works depends on several factors, including the type of account, the balance or principal, the interest rate, timing, and whether you are borrowing money (such as with credit cards, auto loans, and personal loans), or earning money (such as with interest-bearing checking or savings accounts).  <h2>Accrued Interest on Loans </h2>Personal loans, auto loans, and other types of debt charge interest to their borrowers. Most lenders use the simple interest method of accounting, which means that interest that accrues each day is based only on the principal balance of the loan and doesn&#39;t compound on previously accrued interest. For example, on a personal loan, the interest on your debt accumulates daily based on your current loan balance and interest rate. When you make a loan payment, a portion of your total payment amount goes toward the interest that has accrued since your last payment and the remainder goes toward paying down the principal balance of your loan. If you have a fixed interest rate, the daily interest amount will go down over time as your principal amount owed decreases with on time payments. With variable rate loans, the amount of interest that accumulates can fluctuate along with the loan&#39;s interest rate, however there&#39;s generally a downward trend with timely payments.   <h2>Accrued Interest on Bank Accounts </h2>Generally, with interest-bearing deposit accounts, such as a high-yield checking or savings account, interest typically accumulates daily and is paid out monthly. The amount of interest that accrues is based on your balance and the account&#39;s annual percentage yield or APY (which may adjust higher or lower as rates rise or fall) and compounding interest. The higher the APY and your balance, the more you&#39;ll earn. Also, most banks and savings institutions will compound the interest you earn, usually daily. This means that the interest that accrues each day is based not only on your principal account balance but also on the interest that has accumulated since the last payment.  For example, let&#39;s say you have a $10,000 balance in a savings account with an interest rate of 5%. On the first day, your balance earns $1.37 in interest, and that gets added to your interest-earning principal—compounded—at the end of the day. That happens every day. By the end of the year, your principal will have grown to $10,512.67—$500 in interest on your principal balance, and $12.67 from the interest earned on your interest.   Calculation for daily interest rate: 0.05 / 365 = 0.000136986  Calculation for first day’s interest: 0.000136986 x 10000 = 1.36986  While your interest rate is 5% compounded daily; your total return including compounding, or <a href="https://blog.lendingclub.com/apr-vs-apy-whats-the-difference">annual percentage yield</a>,  is 5.1267%. Compounding interest increases your savings over time, especially in a rising interest rate environment. <h2>Accrued Interest on Bonds </h2>If you&#39;re investing in bonds, interest is typically paid out every six months, and the amount that accrues between payments depends on the face value of the bond and its interest rate. This calculation is known as yield to maturity. Interest on bonds does not compound; that is, you don’t earn interest on your interest. <h2>How Accrued Interest Affects Borrowers </h2>If you borrow money, understanding accrued interest gives you an idea of how your loan&#39;s costs are incurred. As you make your regular monthly payments, for instance, the amount of interest that accumulates over time decreases. And if you make additional principal payments on top of your regular payments, you can reduce how much interest accrues even more.   Keep in mind that, if you make an extra payment on a loan the lender may use some of that money to pay off the interest that has accrued since your last regular payment unless you specify otherwise. You can request that the lender put the full amount of your additional payment toward the principal balance, saving you more money on interest in the long run. Understanding how accrued interest works is particularly important if you have student loans. While college students aren&#39;t typically required to make monthly payments while they&#39;re still in school, interest accrues from the moment the loans are disbursed.  For borrowers with federal subsidized loans, the federal government will typically pay interest that accrues while they&#39;re in school and during future deferment periods. If you have unsubsidized loans or private student loans, all the interest that accumulates while you&#39;re in school (and during periods of deferment or forbearance) is added to your balance once repayment begins.  If you want to avoid a growing balance, consider making interest-only payments while you&#39;re still in school. <h2>How Accrued Interest Benefits Savers </h2>If you have an interest-bearing deposit account, look into how often (daily, weekly, monthly, quarterly, semi-annually, annually) your financial institution compounds the interest that accrues in your account. The more frequently interest is compounded (e.g., daily vs. quarterly) makes it possible for you to earn more interest more quickly. And if you&#39;ve invested in bonds, understanding how accrued interest works can help ensure that you get the money you&#39;ve earned, especially if you sell the bond between scheduled interest payments. For example, if you sell a bond three months after your last payment, you won&#39;t receive the amount of interest that accrued during that time. Because the buyer will receive the full semi-annual (every six months) interest payment despite only owning the bond for three months, they should pay you the amount that has accrued since your last payment on top of the price of the bond. <h2>How Is Accrued Interest Calculated? </h2>On loans, lenders generally calculate interest on a daily basis using either a 360-day or 365-day year. The lender will divide the loan&#39;s interest rate by one of those numbers to determine your daily interest rate, which it then applies to your balance. On interest-bearing deposit accounts, interest generally accrues daily. Depending on how often your financial institution compounds interest, the amount that accrues each day may be calculated based on the principal balance plus previously accrued interest. <h2>What Is an Example of Accrued Interest?  </h2>Let&#39;s say you have a personal loan with a $20,000 principal balance and a 12% interest rate. To calculate the amount of interest that accrues every day, you&#39;ll do the following equation: Calculation for daily interest rate: 0.12 / 365 = 0.000328767123288 Calculation for daily accrued interest: 0.000328767123288 x $20,000 = $6.58   In other words, you&#39;ll have $6.58 in daily accrued interest. Over 30 days, that amounts to $197.40.

A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.

A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.<h2>What Is a Charge-Off?  </h2>A charge-off on your credit report indicates the financial institution or creditor has written the account off as a loss and has stopped attempting to collect on a debt that you owe. However, a charge-off does not mean your debt is forgiven—it may be transferred to a collection agency or sold to a debt buyer. As long as the debt remains outstanding, you&#39;re still responsible to pay it. <h2>How Does a Charge-Off Work? </h2>When you miss a payment on a loan or credit card or have a bank account with a negative balance, the creditor or financial institution will attempt to collect the amount you owe. At some point, the creditor may determine the debt is uncollectible and decide to charge it off. This means the creditor has written off the remaining balance as a loss.  At this point, the creditor will report the account as “Charged Off” to the credit reporting agencies which will appear on your credit reports along with the account balance. If the charge-off is legitimate and you can&#39;t convince the creditor to remove it, a charge-off can remain on your credit reports for up to seven years after your first missed payment. Once a creditor has charged off a debt, they may decide to sell it to a debt buyer or transfer it to a debt collection agency for pennies on the dollar. If this happens, your account will be closed, interest will stop accruing on your balance, and your credit report will reflect that the account was &quot;Charged Off.&quot; However, you will still be liable for paying off the debt to the debt collection agency. Additionally, the collection agency may report a collection account for the same debt, further impacting your credit score. <h2>Will a Charge-Off Impact Your Credit Score? </h2>Your payment history is the most influential factor in your FICO credit score. Missing just one payment could have a significant negative impact on your credit score. If a debt balance remains unpaid long enough for the creditor to stop attempting to collect payment, the worsening delinquency and subsequent charge-off could have a long-term  and far reaching impact to your credit score.  For example, a low credit score and history of nonpayment may make it more difficult to get approved for credit in the future. It may also impact your ability to get approved for a residential lease or to qualify for lower interest rates on auto or homeowners insurance.  <h3>How Can You Repair a Charge-Off? </h3>The best way to repair a charge-off is to prevent it from happening. If you start missing payments, don&#39;t ignore the situation. Contact your lender and ask if there’s anything that can be done to help you avoid a charge-off situation. In the event your debt is charged off, as long as there is a balance, you’re still responsible for repayment which is why you should consider ways to pay off the debt as soon as possible to avoid having it go to collections. Even if you cannot pay off the debt in full, you may want to consider negotiating a payment settlement with the creditor for less than what you owe or, if necessary, having the debt discharged in bankruptcy.  In some cases, you may be able to negotiate with the lender to remove the charge-off from your credit report in exchange for full payment—a process known as “pay for delete.” Even if you can&#39;t get it removed, paying off the balance could potentially reduce the impact to your credit score.  If the creditor does sell the debt to a collection agency, you&#39;ll face more attempts to collect the amount you owe. Some debt collectors may even resort to lawsuits to force collection through a court order. <h3>How Can You Limit Charge-Off Damage? </h3>The timeframe for when a creditor decides to charge-off an account ranges from 120 to 180 days from your initial delinquency date. You&#39;ll typically receive letters and phone calls reminding you of the past-due payment, urging you to get caught up. Don&#39;t ignore the creditor—this is the best time to talk to the lender to see if you can avoid a charge-off. If you&#39;ve had an account charged off recently, contact the creditor as quickly as possible to verify the accuracy of the account details and look for opportunities to pay off some or all of the debt to avoid transfer to a collection account and further damage to your credit score. In some cases, a charge-off could be reported in error. If this happens, it could damage your credit score, so you should act quickly to dispute the negative item with the credit reporting agencies. As long as the dispute isn&#39;t frivolous, the credit bureaus are required to investigate it and remove or update the information if it&#39;s found to be innacurate.   To contact the credit bureaus:  <ul><li><a href="https://www.equifax.com/personal/credit-report-services/credit-dispute/">Equifax</a> </li><li><a href="https://www.experian.com/contact/personal-services-contacts.html">Experian</a> </li><li><a href="https://www.transunion.com/credit-disputes/dispute-your-credit">TransUnion</a> </li></ul>If the creditor decides to charge-off your account, it&#39;ll only report only to the credit reporting agencies that it normally reports to. For many lenders, it&#39;s all three, but some lenders may only report to one or two of the major credit bureaus.

{noun} An interest rate that remains the same for a set time, usually for the life of the loan.

An interest rate that remains the same for a set time, usually for the life of the loan.<h2>What Is a Fixed Interest Rate?</h2>A fixed interest rate is an interest rate that remains the same for a set time, usually for the life of the loan. With fixed-rate financing, borrowers can enjoy payment stability and avoid the risk of a variable interest rate—which may increase substantially over time, especially in rising interest rate environments.<h2>How Do Fixed Interest Rates Work?</h2>When you take out a loan with a fixed interest rate, your loan terms will define the fixed rate period.Generally, for financial products like fixed rate mortgages and personal loans, your interest rate will remain the same throughout your loan term, as will your monthly payment amounts.For financial products such as adjustable rate mortgages, the interest is variable, which means it can change periodically. Often, an adjustable rate mortgage (ARM) will have an initial period where the rate is fixed. After the fixed period, your interest rate may stay the same or it may adjust based on prevailing interest rates at the time.<h2>What Is the Difference Between Fixed and Variable Interest Rates?</h2>Fixed interest rates generally won’t change—either for the life of your loan or during a predetermined fixed period. In contrast, variable interest rates fluctuate based on market conditions and may change at any time.<h3>What Benefits Do Fixed Interest Rates Offer?</h3> Having a fixed rate loan offers several benefits for your finances.<ul><li>Financial Predictability. A fixed interest rate makes it easier to plan your finances since your monthly payments don’t fluctuate over the fixed period, usually the life of the loan. Such predictable payments can help you more easily manage your budget and alleviate stress.</li><li>Eliminate Interest Rate Risk. With a fixed interest rate, you don&#39;t have to worry if interest rates start to increase in a volatile economy. Compared to loans with variable rates, a fixed-rate loan with a lower interest rate could save you money in a rising interest rate environment.</li><li>Potentially Lower Borrowing Costs. With fixed-rate loans, you’ll know your total borrowing costs—including interest and fees—before you sign your loan documents. With variable-rate loans, it’s difficult to calculate your total borrowing costs since your interest rate may change substantially over time.</li></ul><h3>What Are the Drawbacks to Fixed Interest Rates?</h3>While a fixed interest rate can help you plan your finances for the long term, there are a few drawbacks to consider.<ul><li>Potentially Higher Rates. Adjustable-rate financial products often have lower interest rates for an initial, introductory fixed period which may temporarily lower your cost to borrow. Fixed-rate products don’t offer such “teaser” rates.</li><li>Risk in Decreasing Interest Rate Environments. If interest rates start going down, you may end up paying more to borrow on a higher interest rate than if you took out a new loan.</li><li>Refinancing Costs. Even if you decide to refinance to get a lower rate, refinancing costs may outweigh the savings you may realize, and the process can be time-consuming. It’s important to compare the total cost of borrowing of your existing versus a potentially new loan before making a decision.</li></ul><h2>What Can You Do to Get a Good Fixed Interest Rate?</h2>Generally, having a high credit score and a demonstrated track record of responsible debt management can help you land a lower fixed interest rate. In contrast, if you have a low credit score and a spotty history of on-time payments, the lender may view you as a higher-risk borrower and may not offer you the best fixed interest rate they have available.<h2>Can You Switch from a Variable Interest Rate to a Fixed Interest Rate?</h2>In most cases, you can&#39;t switch from a variable to a fixed interest rate on an existing loan. While you may be able to refinance your loan—either with your current lender or a new one—and move to a fixed-rate loan that way, it’s important to consider how well you would be able to cope with economic uncertainty. A low variable rates may be tempting initially, but should economic conditions sour and rates begin to rise rapidly, it may be difficult to find a good fixed rate when you want one. Or you may experience an unexpected obstacle, like job loss, that could make refinancing into a fixed interest rate loan difficult.<h3>Are Credit Card Interest Rates Fixed?</h3>Generally, credit card interest rates are variable, not fixed.<h3>Are Student Loan Interest Rates Fixed?</h3>It depends on the type of student loan. Student loans like Perkins Loans and PLUS Loans have fixed interest rates. Many other direct federal student loans—both subsidized and unsubsidized—have fixed rates as well.

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