<h2>Quick answers</h2><ul><li><p><a href="/help/auto-refinance-faq/how-do-i-refinance-my-car-loan">Refinancing your auto loan</a></p></li><li><p><a href="/help/auto-refinance-faq/how-do-i-apply-for-an-auto-refinance-loan">Hints for applying for an auto-refinance loan</a></p></li><li><p><a href="/help/auto-refinance-faq/what-are-the-rates-and-fees-for-auto-refinance-loans">Rates and fees for auto refinance loans</a></p></li><li><p><a href="/help/auto-refinance-faq/how-do-i-make-payments-on-auto-refinance-loans">Making payments on auto refinance loans</a></p></li></ul><h2>Can’t find your answer?</h2><p>Email us at <a href="mailto:auto@lendingclub.com"><b>auto@lendingclub.com</b></a></p><p>Call us toll-free: <a href="tel:888-845-0010"><b>888-845-0010</b></a></p><p>Our hours are: Monday through Friday 6 AM - 4 PM PT</p>

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We all experience costly, unplanned expenses from time to time—a broken appliance, an auto accident, a surprise medical bill, a loss of income. Having a dedicated emergency fund can not only provide the reassurance you’ll be able to meet unanticipated financial needs, it’s also one of the first essential steps you can take to start saving. Putting even a small amount aside for emergencies can help you recover more quickly and get back to meeting your financial goals that much faster.

<p>Unplanned expenses happen from time to time—like a broken appliance, surprise medical bill, or loss of income. Having a dedicated emergency fund helps provide reassurance you’ll be able to cover some (or all) of the cost when the unexpected happens. Let’s take a closer look at some of the common types of emergency expenses, how much you need to save, and how to build an emergency fund.  </p><h2>What is an emergency fund? </h2><p>An emergency fund is typically a dedicated savings account set up to cover unplanned expenses and financial emergencies. Emergency savings differ from other types of savings you may have set aside when planning for expenses like leisure travel, holiday gifts, a down payment for a home or car, or other financial goals.<sup>[1]</sup>  </p><p><b>Some examples of unforeseen expenses include:  </b></p><ul><li><p>Unexpected medical bills </p></li><li><p>Vehicle repairs to keep your car on the road </p></li><li><p>Urgent home repairs, like a leaky roof </p></li><li><p>Appliance repairs or replacement </p></li><li><p>Emergency veterinary bills </p></li><li><p>Unemployment or reduced wages </p></li><li><p>Natural disasters </p></li><li><p>A global health crisis  </p></li></ul><h2>Why you need an emergency fund  </h2><p>Remember, emergency funds should only be tapped to cover unexpected expenses that aren’t part of your routine monthly budget spending or other savings goals. The types of situations you can cover with your emergency fund depend on how much you have saved—but remember, every little bit counts.<sup>[1]</sup>   </p><p>If you’re wondering what’s the goal of an emergency fund, here are a few reasons why you can benefit from having money set aside for a rainy day.    </p><ul><li><p><b>Pay for minor unplanned costs.</b> An emergency fund helps you cover small unexpected expenses, like fixing a broken washing machine or taking your dog to the vet.  </p></li><li><p><b>Protect against loss of income.</b> If you’re out of work for an extended time or lose your job, your emergency fund helps pay for essential expenses like rent, utilities, and groceries. </p></li><li><p><b>Avoid extra debt.</b> Without an emergency fund, even a small financial setback could turn into debt that’s hard to pay off and have a lasting impact on your financial outlook. This is especially true if you need to use an <a href="https://www.lendingclub.com/personal-loan/emergency-loan"><b><u>emergency loan</u></b></a>, high-interest credit cards or tap other savings, like retirement accounts, to cover an unplanned cost.   </p></li><li><p><b>Gain peace of mind. </b>Having a nest egg set aside for unplanned expenses helps ease the <a href="https://www.lendingclub.com/resource-center/personal-finance/money-and-mental-health-is-burnout-affecting-your-finances"><b><u>financial stress</u></b></a> in the event of an emergency, allowing you to put your focus on dealing with the situation instead of worrying how you’ll cover the cost.   </p></li></ul><h2>What’s a good amount to have in an emergency fund? </h2><p>Experts generally recommend saving at least three to six months’ worth of expenses. However, the amount of money needed in your emergency fund varies widely depending on factors like your income level, the rate at which you can save money, and your other financial obligations and goals. </p><p>For example if you have a lot of high-interest debt, you may be more focused on paying that down instead of saving. However, even if you’re paying off debt, it’s still a good idea to put some cash toward an emergency fund.<sup>[2]</sup>    </p><p>To determine how much you need to save, it’s important to consider how you’d pay for a small emergency—like a $500 vet bill, for example—as well as covering your essential expenses in the event of job loss. Also think about your personal financial situation, including your income, bills, and who you’re financially responsible for.   </p><p>Are you the sole earner with dependents? Do you share expenses with a partner and have no children? Is your income steady, or are you a freelancer with a fluctuating cash flow? Don’t forget to think about your debt. Do you have lots of credit card debt, a car payment, student loan, or other obligations? It’s also important to consider your essential expenses like rent or mortgage, groceries, utilities, and insurance premiums.<sup>[1]</sup>  </p><h3>Here’s when to save 3 months’ worth of expenses </h3><p>An emergency fund with three months’ worth of expenses can help you financially navigate a major emergency, like being out of work after a car accident. While it won’t cushion you for the long haul, it can help cover your essential bills while you get back on your feet. If you share expenses with a partner, three months might also be a strong savings goal, since you’ll have another income source to lean on.<sup>[2]</sup>   </p><h3>Here’s when to save 6 months’ worth of expenses </h3><p>Consider saving six months’ worth of expenses to get through a major emergency, like getting laid off. This is especially important if you’re the sole earner or don’t have any other financial resources to tap into. While saving six months of expenses might seem overwhelming, it’s okay to start small. Save up for one month, then two, and so on. Before you know it, you might be surprised to see how much you’ve saved.<sup>[2]</sup> </p><h2>How to start building your emergency fund  </h2><p>If you’re not sure how to get started building your emergency fund, here are a few strategies to begin saving. </p><h3>Set a goal </h3><p>Start by setting a small savings goal you can easily reach, and increase your goal amount as you progress. For example, what was the last unplanned expense you had difficulty paying? If paying a $300 dental bill was a struggle before, then set an initial emergency fund goal of $300. Once you reach that goal, set a bigger goal, and so on. </p><p>Some banks let you create savings “buckets,” which can come in handy if you want to set separate savings goals for different kinds of emergencies, like medical expenses, car repairs, or veterinary fees.<sup>[1]</sup>  </p><h3>Build saving into your budget </h3><p>Examine your current budget and spending habits to find areas where you can cut back, and put that money toward your emergency fund. Consider forgoing some “extras,” like pricey entertainment tickets or restaurant visits and streaming services. If you don’t have a <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions"><b><u>budget</u></b></a>, now is a great time to create one.<sup>[1]</sup>  </p><h3>Automate your savings </h3><p>Decide on an amount you can afford to have <a href="https://www.lendingclub.com/resource-center/personal-finance/simple-steps-on-how-to-start-saving-money"><b><u>automatically transferred</u></b></a> to a savings account on a regular basis. For example, saving just $25 a week adds up to $1,200 a year. Typically you can set up automatic transfers between two bank accounts, like a checking and high-yield savings. </p><p>If you get paid by direct deposit, ask your employer to split up your paycheck between two accounts. Freelancers can try designating a small percentage of every client payment to an emergency fund.<sup>[1]</sup> </p><h3>Use a financial windfall </h3><p>Whenever you come into extra money, like a tax refund, stimulus payment, or cash for a birthday gift, put it into your emergency fund. Similarly, if you get a raise or earn a bonus, try to keep living on your previous income and set the difference aside for a rainy day.<sup>[1]</sup>  </p><h3>Earn extra income </h3><p>Starting a side job or gig—like selling items you no longer need or use, driving for a rideshare service, or working retail during the holidays—can all jump-start your emergency savings. If you’re a freelancer or have inconsistent income, instead of automating transfers (which may leave your checking account short of funds), you might try designating a certain percentage of every deposit—say, 5% or 10%—into your emergency fund. </p><h3>Don’t spend your emergency cash </h3><p>Remember, your emergency fund is supposed to be used for unexpected expenses and needs. For example, you’d use the fund to buy a new washing machine if yours breaks down, but not just because you want the latest model. It’s also important to replenish any funds you take out of the account. So, if you use $500 to buy that replacement washer, set a new goal to replace the $500 you used so you have it for the next emergency.  </p><h2>Where should you keep your emergency fund? </h2><p>When choosing the type of account for your emergency funds, consider easy-to-access, interest-bearing savings or checking accounts. Generally, unless there are additional associated fees, the account should be separate from your existing accounts, such as a vacation savings account or a regular checking account used to pay your monthly bills. </p><p>Look for an account that lets you earn interest to help you build your savings faster. Good examples of emergency fund accounts are typically <a href="https://www.lendingclub.com/personal-savings/high-yield-savings"><b><u>high-yield savings accounts</u></b></a> or money market accounts that offer a higher annual percentage yield (APY) than regular savings accounts. A rewards checking account may be another good option for your emergency fund. These types of accounts are also usually easy to access if you need to make a quick withdrawal. </p><p>However, depending on your financial habits, it might be helpful if your emergency funds are a little bit harder to get to. To create some friction, consider establishing an account at a different bank than where you have your regular checking or savings accounts. Confirm how long it takes to transfer money from one bank to another in case you need to withdraw funds quickly.   </p><p>Some accounts come with fees, a minimum opening deposit, or a monthly balance requirement. So be sure to check the fine print when comparing accounts. It’s also a good idea to look for insured financial institutions to keep your money safe. </p><p>Federally insured banks are covered by the Federal Deposit Insurance Corporation (FDIC), and federally insured credit unions are covered by the National Credit Union Administration (NCUA). This protection means your deposits are insured up to the maximum amount allowed, which is $250,000 per depositor, per ownership category at each institution.<sup>[3][4]</sup> </p><h2>The bottom line </h2><p>An emergency fund not only ensures you’ll be able to meet unanticipated financial needs, but it’s also one of the first essential steps you can take to start saving. Putting even a small amount aside for emergencies can help you recover more quickly and get back to meeting your <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-build-a-strong-financial-foundation"><b><u>financial goals</u></b></a> that much faster. </p><p>Setting aside at least three to six months’ worth of essential living expenses is ideal, but if you’re on a tight budget, saving even just a few hundred dollars may be enough to cover smaller emergencies like a broken dishwasher.    </p><hr/><ol><li><p><a href="https://www.consumerfinance.gov/an-essential-guide-to-building-an-emergency-fund/"><u>Consumer Financial Protection Bureau</u></a>. “An essential guide to building an emergency fund.” </p></li><li><p><a href="https://www.cnbc.com/select/how-much-to-save-in-emergency-fund/"><u>CNBC</u></a>. “3 to 6 months of savings might be ‘tried and true wisdom’ but this expert has advice if you’re living paycheck-to-paycheck.” </p></li><li><p><a href="https://www.fdic.gov/resources/deposit-insurance"><u>Federal Deposit Insurance Corporation</u></a>. “Deposit insurance.” </p></li><li><p><a href="https://ncua.gov/consumers/share-insurance-coverage/frequently-asked-questions-about-share-insurance#:~:text=The%20National%20Credit%20Union%20Administration,by%20Share%20Insurance%20Fund%20protection."><u>National Credit Union Administration</u></a>. “Frequently asked questions about share insurance.” </p></li></ol><p>  </p>

Creating the discipline necessary for saving money on a regular basis is one of the keys to establishing a solid financial future. Whether that means not letting late fees eat away at your bank account, or methodically setting aside a certain amount of money for your next great adventure, saving takes patience and practice.

<p>Saving money on a regular basis is one of the keys to establishing a <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-build-a-strong-financial-foundation"><b><u>solid financial future</u></b></a>, but it takes time and practice. However, automating your savings can help you “set it and forget it,” so you can build your <a href="https://www.lendingclub.com/resource-center/personal-savings/understanding-average-americans-savings-by-age"><b><u>savings</u></b></a> faster and stick to your goals.  </p><h2>Why you should you consider automating your savings </h2><p>Automating your savings means transferring funds from one account to another automatically, typically on a set schedule. Thanks to technology, there are many different approaches you can use, from depositing a portion of your paycheck into a savings account every week to rounding up “spare change” from every debit purchase into an IRA. The most effective strategies don’t require you to do anything once they’re set up, aside from changing the schedule or amount you want to save.  </p><p>Manually adding funds to a savings account takes effort, and it can be hard to resist the temptation to spend your paycheck once it hits your account. However, when you automatically direct a recurring deposit into a savings account, you may be more likely to stick to your savings goal. Then, all you have to do is sit back and watch your nest egg grow.  </p><h2>5 ways to automate your savings </h2><p>If you’re ready to start making saving second-nature, check out these easy ways to watch your dollars add up and transform the way you think about saving money for both short-term and long-term goals. Here are five ways to put your savings on autopilot.  </p><h3>1. Send a portion of your paycheck to savings </h3><p>Taking money from your <a href="https://www.lendingclub.com/resource-center/personal-savings/how-much-of-your-paycheck-should-you-save"><b><u>paycheck</u></b></a> before it even hits your account is one of the best ways to automate your savings. If you get paid through direct deposit, meaning your employer transfers your paycheck electronically into your account on payday, you may be able to split up where the money goes.  </p><p>Some employers let you add multiple accounts for deposit and designate how much goes into each account. So you could, for example, designate 80% of your paycheck into your regular <a href="https://www.lendingclub.com/personal-deposits"><b><u>checking account</u></b></a> and 20% into a <a href="https://www.lendingclub.com/personal-savings/high-yield-savings"><b><u>high-interest savings account</u></b></a>. </p><p>Even if your employer doesn’t offer this option, most banks let you schedule transfers, so you can set up your own automatic deposit from your checking account to a savings account on payday.  </p><h3>2. Take advantage of apps </h3><p>Many apps allow you to set up automatic savings or investment accounts. For example, you may be able to schedule transfers into interest-earning savings accounts, college savings accounts, retirement accounts, or even stocks, bonds, and bitcoin. Look for apps that offer flexibility, like the ability to transfer small amounts or round up spare change.  </p><p>Some apps may charge a nominal fee for this service, but you may be surprised how quickly investing $25 weekly adds up—all without needing to lift a finger. When comparing apps, look for companies that offer extras, like bonus cash when you refer a friend to the app or hit certain milestones. Some apps also allow you to choose the types of companies you want to invest in, so you make investments that align with your financial goals.  </p><h3>3. Save your spare change </h3><p>Although you might not have an actual change jar in your kitchen anymore, you can still find ways to save your “spare change.” Many banks and other financial platforms offer the option to round up debit purchases and put the extra change into a savings account. For example, your bank may round up every debit purchase and put the change into a connected savings account.  </p><p>You can also link an account to an app that offers round-up savings. In some cases, you can round up with multiple financial institutions and boost your savings even more. For instance, you may have both your bank and an app rounding up your spare change. So if you make a $1.50 debit purchase, both your bank and the app deposit $0.50 into a savings account, and you end up with $1 saved. </p><h3>4. Set up savings goals </h3><p>Whether you’re saving for a rainy day or a dream vacation, automating savings into specific accounts or categories within an account can help you meet your goals faster. It can also help ensure the money you save for emergencies doesn’t commingle with the cash you&#39;re setting aside for holiday spending. You can use separate accounts to split up your goals. Or look for accounts and apps that let you set up “savings buckets.”  </p><p>Depending on the app, you may be able to customize the name of the bucket and set your savings goal, end date, and deposit amount. Some apps even let you schedule how you’d like an automated deposit split among the buckets. For instance, if you transfer $100 into a savings account every month, you can designate 20% to a vacation fund, 30% to a car down payment goal, and the remaining 50% to your emergency fund.    </p><h3>5. Contribute to employer retirement plans </h3><p>Many employers let you automatically contribute to a retirement fund, health savings account, or flexible savings account. In some cases, your employer might even match a percentage of your deposit—which is like getting free money every time you make a deposit. Money may also be taken from your paycheck before taxes, which can help you save even more in the long run by lowering your taxable income.  </p><p>Check with your employer to understand your options and get your contributions set up. If you’re already set up for automatic contributions, but haven’t hit the maximum allowable amount, consider adding more.  </p><h2>The bottom line </h2><p>Your financial future is up to you, but having a disciplined mindset for saving is your first step. Automating your savings can help you keep your savings goals on track. Look carefully at your <a href="https://www.lendingclub.com/resource-center/personal-finance/simple-steps-to-building-a-better-budget"><b><u>budget</u></b></a> to see how much you can put toward your savings goals while still staying on top of your day-to-day expenses and debt obligations.  </p><p>Make sure you’re<b> </b><a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-stop-living-paycheck-to-paycheck"><b><u>living within your means</u></b></a>, and look for any extra expenses you can trim from your budget to put toward savings or paying down debt. If you have a lot of debt, you may be able to pay it down faster by using the debt avalanche or debt snowball method. Or consider rolling high-interest credit card balances into a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation"><b><u>debt consolidation loan</u></b></a>.  </p>

Your spending habits play a big role in your overall financial well-being. How you spend (or don’t) can influence how much debt you carry, what your emergency fund looks like, and even play a part in how you feel emotionally about your financial picture.  

<p>There’s no expert consensus on how long it takes to make or break a habit. However, one thing’s for certain: Changing your habits, including your spending habits, is possible, but it requires some work. Examining your finances, creating a budget, setting savings goals, and starting with small changes can make it easier to form better spending habits. </p><p>If you’re grappling with how to change your spending habits, following these manageable steps and remaining consistent can help you improve your situation.  </p><h2>How do spending habits form? </h2><p>While everyone is different, multiple sources probably helped you form your spending habits. Here are some of the most common influences: </p><ul><li><p><b>Family influence:</b> According to the Consumer Financial Protection Bureau (CFPB), our attitudes and values toward money start to form in early childhood. Thus, our family’s financial habits often influence your own. For instance, if your parents were frugal growing up, you might be more likely to prioritize saving.<sup>[1]</sup>   </p></li><li><p><b>Media influence:</b> The media you consume also influences your spending habits, from the characters you related to on television as a child to the news you read and ads you view as an adult.<sup>[1]</sup>   </p></li><li><p><b>Individual influence:</b> Your own personality, goals, and how you perceive your past experiences around money also influence your spending habits.<sup>[1]</sup>   </p></li></ul><h2>7 Steps to stop spending money and improve your spending habits </h2><p>Changing your spending habits won’t happen overnight, but with time and effort, you can improve your spending habits. These steps can help you along the way.  </p><h3>1. Examine your finances </h3><p>The first step to shifting your spending habits is understanding where your money is going. Examining a few months’ worth of bank and credit card statements and your monthly financial obligations can help you identify spending patterns and the categories where you’re spending the most. You could do this audit manually or use a budgeting app that syncs up with your accounts to simplify the process.<sup>[2]</sup>  </p><p>Reviewing your current debts and their interest rates is also important. If you have a few thousand dollars in high-rate credit card debt, for instance, you might benefit from consolidating it with a lower-rate <a href="https://www.lendingclub.com/personal-loan"><b><u>personal loan</u></b></a> or a balance transfer credit card with a 0% introductory APR.  </p><h3>2. Prioritize your spending </h3><p>Once you understand where your money is going, prioritizing your spending is your next step. Your monthly debt obligations and essential expenses should come first, followed by what’s most important to you. For example, if your family bonds over take out a couple of times a month, you might put that cost high on your priorities list.  </p><p>Prioritizing your spending can help you understand which expenses are essential, important, and not-so-important, so you can allocate your money accordingly. However, you don’t have to make sweeping changes, like cutting out non essential spending, since that may be overwhelming.<sup>[2]</sup> </p><h3>3. Make small, incremental changes </h3><p>Changing your spending habits starts with small, incremental changes rather than a sweeping overhaul. For instance, instead of completely cutting non essential spending, you could look at your low-priority expenses and decide to reduce your monthly spending by $15 in a couple of categories. That might mean sacrificing one weekly trip to your favorite lunch spot or trading a few brand names for generic items at the supermarket.<sup>[3]</sup>  </p><p>Small, incremental changes can be less overwhelming and easier to stick with, increasing the likelihood that your new behaviors will become habits.  </p><h3>4. Set savings goals and track progress </h3><p>Want to grow your <a href="https://www.lendingclub.com/resource-center/personal-finance/your-emergency-fund-the-essential-guide"><b><u>emergency fund</u></b></a>? Save for a home down payment? Stop <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-stop-living-paycheck-to-paycheck"><b><u>living paycheck to paycheck</u></b></a>? Taking a more organized approach toward your savings goals could help you achieve them faster. You can set and track your progress on your own, but it’s often easier to rely on a budgeting app. Many apps let you set savings goals, allocate money toward them, and easily view your progress.<sup>[2]</sup>  </p><h3>5. Make saving automatic </h3><p>Consider saving money automatically, either by regularly allocating a portion of your paycheck to your savings account or scheduling routine transfers. When you save automatically, it becomes part of your routine. Even if you’re only saving a small amount, it will eventually add up. Also consider increasing the amount you save as your spending habits start to shift, or after you experience a windfall, such as a raise or bonus at work.<sup>[3]</sup>   </p><h3>6. Start meal planning </h3><p>According to a U.S. Bureau of Labor Statistics Consumer Expenditures <a href="https://www.bls.gov/news.release/cesan.nr0.htm"><b><u>report</u></b></a>, U.S. adults spent an average of $9,985 on food in 2023. Grocery spending accounted for nearly two-thirds of this cost. Fortunately, it’s possible to reduce your spending by meal planning each week and sticking to a grocery list. Both strategies can help you avoid impulse buying, saving you money on food.</p><p>Bonus: Meal planning can also help save you time at home and reduce food waste.<sup>[3]</sup>  </p><h3>7. Create a budget and stick to it </h3><p><a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions"><b><u>Creating a budget</u></b></a> can help you stay on track toward better spending habits. Your budget can be as simple or detailed as you’d like. For instance, some people prefer to categorize their spending in a detailed spreadsheet, while others find it simpler to use a budgeting app. You can also use a more high-level budgeting strategy, such as the 50/30/20 budget.<sup>[2]</sup>   </p><p>This method allocates 50% of your monthly income toward essential expenses, 30% toward nonessential expenses, and 20% to savings or debt payments. Choosing a budgeting tool and strategy that aligns with your needs can increase the likelihood that you’ll stick to your budget in the long term.<sup>[2]</sup>  </p><h2>The bottom line </h2><p>Your family, the media, and your personality shape your views about money. These are strong influences, so changing your spending habits can seem complicated. However, building a <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-build-a-strong-financial-foundation"><b><u>strong financial foundation</u></b></a> isn’t as difficult as you think, and the steps outlined above can help you figure out how to create better spending habits.<sup>[1]</sup> </p><p>Start by auditing your finances to understand your spending and debt obligations. You might find you could save on interest by <a href="https://www.lendingclub.com/personal-loan/debt-consolidation"><b><u>consolidating high-interest debt</u></b></a> with a lower-rate personal loan. Doing so might give you some wiggle room as you work toward improving the ways you spend.   </p><hr/><ol><li><p><a href="https://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf"><u>Consumer Financial Protection Bureau</u></a>. “Financial well-being: The goal of financial education.” </p></li><li><p><a href="https://www.consumerfinance.gov/about-us/blog/budgeting-how-to-create-a-budget-and-stick-with-it/"><u>Consumer Financial Protection Bureau</u></a>. “Budgeting: How to create a budget and stick with it.” </p></li><li><p><a href="https://www.consumerfinance.gov/about-us/blog/two-ways-save-extra-money/"><u>Consumer Financial Protection Bureau</u></a>. “Two ways to save extra money.”</p></li></ol><p></p>

If you’re feeling a pinch in your wallet this year you’re not alone. With inflation, supply chain issues, high gas prices, and wage stagnation, many Americans are feeling anxious about their financial well-being heading into the holiday season. 

<p>The holidays can be a wonderful time to spend time with loved ones, but the cost of gift giving, travel, festivities and other holiday cheer often adds up fast. However, with the right strategies in place, you can find ways to save money.  </p><h2>How can you save money during the holidays? </h2><p>If you’re feeling a pinch in your wallet this holiday season, you’re not alone. According to recent <a href="https://www.usatoday.com/story/money/shopping/2024/09/05/holiday-shopping-already-starting/75014305007/"><b><u>Bank Rate data</u></b></a>, more than a quarter of Americans (28%) are feeling stressed about holiday shopping costs and 27% plan to take on debt to cover holiday costs.<sup>[1]</sup> To cut costs, consider some of the below strategies to save on gifts, travel, and more.  </p><h3>1. Make a holiday budget </h3><p>Before the holiday season kicks off, <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions"><b><u>create a budget</u></b></a> that includes all of your anticipated holiday costs, like gifts, travel, pet boarding, events, extra groceries, and seasonal home decor. As the holidays approach, make sure to stick to your budget and avoid temptations that may cause you to overspend.<sup>[2]</sup>  </p><h3>2. Set up a holiday savings account </h3><p>Based on your holiday budget, put money aside periodically into a holiday fund. You can stash $20 a week into an envelope or have a percentage of your paycheck automatically deposited into a savings account. Try not to dip into your holiday cookie jar for other expenses. </p><h3>3. Shop early </h3><p>Consider what you’ll need this holiday season, and start buying early. Whether it’s stocking up on party supplies, buying gifts throughout the year, or purchasing clearance holiday decorations for next season, there are many strategies to get a head start. Shopping early helps spread out spending over time, allowing you to avoid the holiday rush. In some cases, you may be able to save when you buy in bulk or shop sales.  </p><h3>4. Make a shopping list </h3><p>To avoid overspending or impulse purchases, create a list of what you need to buy. When shopping in person or online, be sure to stick to your list. From gifts to groceries, a well-thought-out list can help you more easily comparison-shop and stay on budget. </p><h3>5. Don’t pay for shipping </h3><p>Shopping online is convenient, but it can come with added shipping fees. To save money, take advantage of free shipping offers. If you’re a last-minute shopper, consider waiting until National Free Shipping Day<sup>[3]</sup>, an annual December event where thousands of retailers offer free shipping. Some participating stores also waive minimum ordering requirements and offer additional discounts. </p><h3>6. Skip Black Friday </h3><p>It may be tempting to take advantage of Black Friday and Cyber Monday, but the deals aren’t always what they’re cracked up to be. Still, the hype often lures people into piling their carts high with budget-busting impulse buys. This year, consider opting out altogether or if you do feel the need to shop on these sale days, stick to your list and budget. </p><h3>7. Plan travel carefully </h3><p>Staying home for the holidays saves the most cash, but it’s not always possible to skip holiday travel. The cost of airfare tends to increase in the last six weeks of the year. Book early and be flexible about what days you choose to fly. In some cases, it’s less expensive to fly on the holiday itself instead of the days leading up to it. Try to book rental cars and hotels early, and if you have travel rewards, the holiday is a great time to cash in. While it may not be as comfortable as a hotel, staying with friends and family can also help you save.  </p><h3>8. Keep festivities simple </h3><p>Throwing a holiday party or hosting a holiday dinner can be a big investment of time, money, and energy. Keep meals simple to minimize costs and trips to the grocery store. Skipping the alcohol can help you save, too. Or if you feel comfortable, ask guests to bring their favorite side dishes, desserts, or drinks. You can also skip the full sit-down meal, and host a holiday open house or gathering with finger foods, pastries, appetizers, or just dessert.  </p><h3>9. Pay cash </h3><p>It may be tempting to put all of your holiday spending on your credit cards, but you could rack up interest charges if you’re not able to pay off balances in full. Instead, limit credit card use, and try to pay for gifts and other holidays with cash. If you have trouble <a href="https://www.lendingclub.com/resource-center/personal-finance/sticking-to-a-budget-common-problems-and-solutions"><b><u>sticking to your budget</u></b></a> when gift shopping, you can even consider giving cash for gifts. Although it’s not the most creative, sometimes it’s more than fine to be the one who pops a $20 in a card.<sup>[2]</sup>   </p><h3>10. Get creative </h3><p>Whether it’s gifts, cooking, or decorations, thinking outside the box can help you save during the holidays. Upcycle holiday decor, make cookies from scratch, or give people something you made with love. You can also thrift your holiday outfits and even give gently used items, like books and jewelry, as gifts. Think about ways to get crafty when you wrap presents, too. Recycle old wrapping paper or use something unexpected, like old newspapers. Mother Nature is also a great source of inspiration during the holidays—pinecones and evergreen branches work well for free (and fragrant) holiday decor.  </p><h3>11. Limit gifts </h3><p>Rather than exchanging gifts with everyone in your family or friend circle, consider setting up a holiday gift exchange like a Secret Santa or Holiday Swap. Or, you can set boundaries, like only giving gifts to children under 18. Some families decide to chip in on one big-ticket gift or a family experience that everyone can enjoy, like a trip. Another option is to skip gifting entirely and focus on togetherness.  </p><h3>12. Use technology </h3><p>Buying holiday cards and postage can add up quickly. Instead, send e-cards to friends and family or find an online service that will print and mail holiday cards at a discount. Shopping apps can help you get cash back and discounts online. You can also use budgeting apps to help you stick to your holiday budget.  </p><h3>13. Check out free activities  </h3><p>The holidays come with many types of family-friendly activities, usually at no cost. From town and city tree lightings and holiday walks to light displays and pond ice skating, you can usually find something to do every weekend during the holiday season. Many schools and churches also offer free holiday concerts, too.  </p><h3>14. Watch out for porch pirates </h3><p>Don’t let a package thief ruin your holiday. Sign up for UPS<sup>®</sup> My Choice, USPS<sup>®</sup> Informed Delivery, or FedEx<sup>®</sup> Delivery Manager—free services that let you know when your packages are scheduled to arrive. You can also have Amazon<sup>®</sup> orders delivered to an Amazon Hub Locker near you. USPS and UPS will also hold and redirect mail and packages for you. </p><h2>The bottom line </h2><p>A little planning can go a long way to help you save and feel in control financially this holiday season. Choose a strategy that makes sense for your family’s needs and budget. Remember, it’s okay to start new traditions or pass on things that align with your budget or <a href="https://www.lendingclub.com/resource-center/personal-finance/do-you-know-your-financial-values"><b><u>financial values</u></b></a>. If you’re still paying off last year’s holiday debt, don’t beat yourself up. There are solutions available to help you get back on track, like a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation"><b><u>debt consolidation loan</u></b></a> for your high-interest credit card.     </p><hr/><ol><li><p><a href="https://www.usatoday.com/story/money/shopping/2024/09/05/holiday-shopping-already-starting/75014305007/">USA Today</a>. “Forget Halloween, it&#39;s Christmas already for some American shoppers.” </p></li><li><p><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.” </p></li><li><p><a href="https://nationaltoday.com/free-shipping-day/">National Today.</a> &quot;National Free Shipping Day.&quot;</p></li></ol><p></p>

Whether you’re stuck in a high-interest auto loan and want to save money, or you’re looking to slash your monthly car payment, an auto refinance may be the answer for you. However, if your credit score is less than 700, you may be wondering if you can refinance your auto loan with bad credit.

<p>If your credit isn’t so hot, you may not be able to qualify for <a href="https://www.lendingclub.com/auto-refinancing"><b><u>auto loan refinancing</u></b></a> as easily as someone with average or excellent credit—and you could face high interest rates. Refinancing may be possible with poor credit, but it’s important to consider if it makes financial sense before ditching your current loan.<sup>[1]</sup> Let’s take a closer look at how to refinance your car with poor credit.  </p><h2>Can you refinance a car loan with bad credit? </h2><p><a href="https://www.lendingclub.com/resource-center/auto-refinance/how-does-refinancing-a-car-work"><b><u>Refinancing an auto loan</u></b></a> with less-than-perfect credit is possible. If you have poor credit, it may be better to stick with your current loan. Some lenders offer refinancing loans to people with bad credit, such as a FICO<sup>®</sup> score below 580, and make it easy to get approved.<sup>[2]</sup> However, such lenders may be predatory and target people with poor credit. The loans usually have very high interest rates, fees, and large monthly payments—which can put you in a cycle of debt.<sup>[3]</sup>   </p><p>Still, if your credit score has improved since you first took out the loan or market rates have come down, shopping around can’t hurt. If you find your credit is still too low to qualify for an affordable rate, you can take steps to improve your creditworthiness and overall financial situation before you apply.<sup>[1]</sup>  </p><h2>How to refinance a car loan if you have poor credit </h2><p>While there’s no guarantee you’ll be approved for a refinance auto loan with poor credit, some lenders offer competitive interest rates and flexible eligibility criteria. Here are a few things to consider when <a href="https://www.lendingclub.com/help/auto-refinance-faq/how-do-i-refinance-my-car-loan"><b><u>refinancing a car loan</u></b></a> with a low credit score. </p><h3>Step 1: Know your credit situation  </h3><p>Generally, the higher your credit score, the lower your interest rate. <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags"><b><u>Check</u></b></a><a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags"><b><u> your credit reports</u></b></a> regularly to keep tabs on your scores and look for inaccuracies. You can also request free copies of your credit reports from each of the three major credit bureaus—Equifax, Experian, and TransUnion—once a week at <a href="http://annualcreditreport.com/"><b><u>AnnualCreditReport.com</u></b></a>. Consider using a credit monitoring service to keep tabs on your credit regularly. Review your reports for accuracy, and if anything looks off, be sure to dispute the accuracy.<sup>[1]</sup>  </p><h3>Step 2: Understand lender requirements </h3><p>Once you know your score, research lender minimum score requirements. Many lenders share their required credit score range or minimum required credit score in their online FAQs. If your score is too low to qualify with most auto refinancing lenders, consider taking steps to build your credit. Watch out for lenders that advertise loan options for people with “bad credit” or “subprime” scores. While your score may qualify, these loans usually come with very high interest rates and fees.<sup>[3]</sup>  </p><h3>Step 3: Reach out to your current lender </h3><p>Ask your current lender about refinancing options. If your credit score has improved or you’ve made a few on-time payments in a row, your lender could be willing to do what it takes to keep your business. Not all lenders refinance their own auto loans, though, so even if your financial situation is solid, you may still need to go elsewhere.  </p><h3>Step 4: Compare lenders </h3><p>You should be able to check your rate for auto refinance loans through several lenders without doing more damage to your score. Shop around for lenders, like LendingClub Bank, that allow you to check your rate with just a <a href="https://www.lendingclub.com/resource-center/personal-finance/key-differences-of-a-soft-credit-check-vs-hard-credit-check"><b><u>soft credit inquiry</u></b></a>—meaning no ding to your score. Once you find a few options that look like a good fit, you can submit your applications.<sup>[4]</sup>  </p><p>Be sure to do this in a short time period as applying for auto refinancing typically results in a hard credit pull. However, most credit scoring models count multiple loan inquiries as one if they’re done within a short time frame, so feel free to apply at multiple banks, credit unions, or online lenders.<sup>[4]</sup>  </p><p>Compare loan offers carefully. Be sure to read the fine print about your rates, payment terms, and fees. It’s also important to make sure your car is eligible, as some lenders put restrictions on details like mileage and time left on the original loan. </p><h3>Step 5: Accept an auto loan refinance offer </h3><p>If you find an offer that works for your budget and financial situation, accept the offer and complete any paperwork. If you use an <a href="/auto-refinancing">online auto refinancing lender</a>, like LendingClub Bank, your old loan is usually paid electronically using funds from the new loan. To avoid any gaps in your payment history, continue to make payments on your existing loan until you receive confirmation it’s been paid off. Be sure to also make note of your new loan’s first payment date, as payments begin right away when you refinance.<sup>[1]</sup>  </p><h2>When is the best time to refinance your loan? </h2><p>Timing matters when refinancing an auto loan—especially if you have less-than-perfect credit. If your credit situation has changed or market rates have come down, it makes sense to refinance. However, sometimes it’s not the <a href="https://www.lendingclub.com/resource-center/auto-refinance/when-can-i-refinance-my-car-loan"><b><u>right time to refinance</u></b></a>, like if you’re upside down on your car loan or interest rates have gone up. Let’s take a closer look at times when it may make sense to refinance an auto loan and when you may be better off sticking with your existing auto loan. </p><h3>When it makes sense </h3><p>Some common situations when it’s typically a good time to refinance your auto loan include:  </p><ul><li><p><b>Your credit score has improved since you took out the loan.</b> Even if your credit score is less than stellar, having a slightly better score than when you first took out your auto loan could help you get a better rate if you refinance.<sup>[1]</sup> </p></li><li><p><b>You want to add or remove a cosigner.</b> Adding a personal loan cosigner with better credit than yours can help lower your rate. Or you may be ready to remove the cosigner you needed when you first got the loan.<sup>[1]</sup> </p></li><li><p><b>You want a lower monthly payment. </b>Refinancing an auto loan can help get you more<b> </b>affordable payments. Keep in mind your new lower payments may be spread over a longer repayment period than your original loan, which increases your total interest costs.<sup>[1]</sup> </p></li><li><p><b>You didn’t get the best rate.</b> If you got your loan at the dealer, chances are you’re paying more interest than some of the auto refinance options out there.<sup>[1]</sup>  </p></li><li><p><b>Lower interest rates available.</b> Market rates may have come down since you first got your loan. Even a small difference can make a big dent in what you’ll need to pay throughout the lifetime of your loan.<sup>[1]</sup> </p></li></ul><h3>When you should wait </h3><p>Refinancing an auto loan doesn’t always make sense. Here are some common reasons you may want to hold off:  </p><ul><li><p><b>The interest rate is too high. </b>Ideally, you want a lower interest rate when you refinance an auto loan. So if your credit score has gone down or rates have gone up, you may want to hold off.<sup>[1]</sup> </p></li><li><p><b>You owe more than your car’s worth.</b> If you financed the vehicle and you’re now upside down on your loan—meaning the balance on the loan is higher than your vehicle’s value—refinancing usually isn’t a good idea.<sup>[5]</sup> </p></li><li><p><b>You have to pay an origination fee. </b>Lenders sometimes deduct an origination fee when you take out an auto refinance loan. It’s usually a percentage of the new loan amount—meaning you may not have enough loan proceeds to pay off your existing loan.  </p></li><li><p><b>Your current loan has a repayment fee.</b> Some auto lenders charge a fee if you pay off your loan early. If this fee costs more than what you’d save by refinancing, it may make sense to stick with your current loan.<sup>[6]</sup> </p></li><li><p><b>You don’t want to affect your credit. </b>Lenders usually perform a hard inquiry when you refinance an auto loan, so your credit score will dip a few points. The impact is temporary, but if your credit is already poor, you may not want to hurt your score.  </p></li></ul><h2>The bottom line </h2><p>Refinancing an auto loan with bad credit isn’t the easiest, but it can be done. Still, it may not always be the best choice, especially if you’re worried about higher rates or monthly payments. If it’s not the right time, <a href="https://www.lendingclub.com/resource-center/personal-finance/credit-score-hacks-to-increase-your-credit-score"><b><u>work on improving your credit</u></b></a>. This includes consistently making payments on your current loan to help build a positive payment history.   </p><p>If you can’t afford to make your auto payment, talk to your lender about options to modify the terms of the current loan. The company may also have options to help you catch up on payments. Or, if you need to get out of the loan altogether, consider trading in or selling the vehicle.</p><hr/><ol><li><p> <a href="https://www.consumerfinance.gov/ask-cfpb/what-should-i-know-before-i-shop-for-auto-loan-at-a-bank-credit-union-dealership-or-other-lender-en-755/#will-my-credit-impact-my-interest-rate"><u>Consumer Financial Protection Bureau</u></a>. “What should I know before I shop for a car or auto loan?” </p></li><li><p><a href="https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/?pc=sem_exp_google&cc=sem_exp_google_ad_1974573071_127718684813_550261321854_kwd-18335061_b___k_Cj0KCQjwpP63BhDYARIsAOQkATYSFtF-hSoe21DsarMNtxQbBgfhEqy44_4oB_0zphblZzbTwjEPb_gaAvG7EALw_wcB_k_&ref=generic&awsearchcpc=1&gad_source=1&gclid=Cj0KCQjwpP63BhDYARIsAOQkATYSFtF-hSoe21DsarMNtxQbBgfhEqy44_4oB_0zphblZzbTwjEPb_gaAvG7EALw_wcB"><u>Experian</u></a>. “What is a good credit score?” </p></li><li><p><a href="https://consumer.ftc.gov/articles/auto-loan-refinancing-scams#:~:text=Scam%20refinancers%20often%20tell%20you,pay%20your%20lender%20for%20you."><u>Federal Trade Commission Consumer Advice</u></a>. “Auto loan refinancing scams.” </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/whats-a-credit-inquiry-en-1317/#:~:text=Hard%20inquiries,frequently%20you%20apply%20for%20credit."><u>Consumer Financial Protection Bureau</u></a>. “What’s a credit inquiry? </p></li><li><p><a href="https://consumer.ftc.gov/articles/auto-trade-ins-and-negative-equity-when-you-owe-more-your-car-worth"><u>Federal Trade Commission Consumer Advice</u></a>. “Auto Trade-Ins and Negative Equity: When You Owe More than Your Car is Worth” </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/can-i-prepay-my-loan-at-any-time-without-penalty-en-843/"><u>Consumer Financial Protection Bureau</u></a>. “Can I prepay my loan at any time without penalty?” </p></li></ol><p> </p>

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.

<p>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 Stackit<sup>TM</sup> 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.</p><h2>Limited Time Offer to Double Your Cash Back Through 12/31/22</h2><p>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.</p><p>“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.”</p><p>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—<b>doubling their earnings for a limited time through 12/31/22.</b>* Cash back can be redeemed for e-gift cards through the Earnings Dashboard.</p><h2>New Name, Better Rewards</h2><p>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.</p><p>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.</p><p><i>*Double Cash Back Offer on eligible transactions expires 12/31/22. See </i><a href="/legal/terms-of-use"><i>Terms of Use</i></a><i> for full details. Offer is subject to change without notice.</i></p><p>Stackit is a non-deposit product offered by LendingClub Bank.</p>

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. 

<p>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>.</p><h2>Being Unbanked Increases Costs for Families</h2><p>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. </p><p>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.</p><h2>More Rewarding Banking for More People</h2><p>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:</p><h3>Low Minimum Opening Balance</h3><ul><li><p>Access Rewards Checking with an opening deposit of only $25</p></li><li><p>Freedom from Fees Save more of your hard-earned money with no overdraft, monthly maintenance, and incoming wire transfer fees<sup>1</sup></p></li></ul><h3>Unlimited Cash Back</h3><ul><li><p>Earn <a href="/personal-checking/rewards-checking">unlimited 1% cash back</a> on Qualified (signature-based) Purchases when using your Rewards Checking debit card<sup>2</sup></p></li></ul><h3>Free ATM Access</h3><ul><li><p>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 banks<sup>3</sup></p></li></ul><h3>Get Your Paycheck Early</h3><ul><li><p>Set up direct deposit into your account and you could be eligible to receive your money up to 2 days earlier<sup>4</sup></p></li></ul><h3>Earn Interest</h3><ul><li><p>Earn an APY that’s more than the national average with account balances of at least $2,500<sup>5</sup></p></li></ul><h3>FDIC Insurance</h3><ul><li><p>Rest easy knowing your deposits are FDIC-insured up to the maximum amount allowed—$250,000 per depositor for each ownership category</p></li></ul><h3>Best Online Experience</h3><ul><li><p>Based on our easy-to-use mobile app and award-winning <a href="/personal-checking/rewards-checking">online checking account</a>, NerdWallet named us <i>Best Bank or Credit Union for Online Experience</i></p></li></ul><h2>What Our Members Say</h2><p>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>“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.”</i></p><p><b>Robin</b>, a LendingClub Bank Member<i>“The rewards checking account with cash back every month has helped me ditch my credit card and debt.”</i></p><p><b>Lauren</b>, a LendingClub Bank Member</p><p>Read more member reviews.</p><h2>Your Financial Well-Being Matters to Us</h2><p>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. </p><p><i>Testimonials reflect the real-life experiences of individuals who used our products; however, individual results may vary.</i></p><p><i></i></p><hr/><h4><i>Terms and Conditions</i></h4><p><i>Accounts subject to approval. $25 minimum opening deposit required. See Product Terms &amp; Conditions for additional details.</i></p><p><i>1. Miscellaneous fees may apply. View Product Terms &amp; Conditions for complete details.</i></p><p><i>2. The Debit Card Rewards Program (“Cash Back Rewards”) provides 1.00% </br>cash-back on all Qualified Purchases using a debit card tied to an Eligible Account.</i></p><p><i>Eligible Accounts are: Rewards Checking accounts that meet the following requirements for the calendar month in review:</i></p><p><i>1). Maintain an average monthly balance of at least $2,500.00; or 2). Receives at least $2,500.00 in Qualifying Direct Deposits.</i></p><p><i>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.</i></p><p><i>Qualified Purchases are defined as: Signature-based purchases made using the debit card </br>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).</br> </br>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.</br> </br>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.</i></p><p><i>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.</i></p><p><i>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. </i></p><p><i>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.</i></p>

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.

<p>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.</p><p>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.  </p><p>“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.” </p><p>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.  </p><p>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: </p><p>“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 </p><p>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. </p><p>Thanks again to all of our members for helping us achieve this incredible milestone.  </p>

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

<p>In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. </p><p>During the webinar, Anuj Nayar, our Financial Health Officer, discussed:</p><ul><li><p>Our journey to get to where we are today </p></li><li><p>Lessons learned from our 15-year history as a fintech pioneer</p></li><li><p>How we’re leveraging our digital marketplace bank to further our mission to help Americans on their path towards financial health</p></li><li><p>We recently reported Q4 2021 and year-end earnings</p></li><li><p>New data on the financial health of U.S. consumers from our latest Paycheck-to-Paycheck report</p></li></ul><p>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. </p><p><a href="https://vimeo.com/686043451">Check out the video below to learn more.</a></p>

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.  

<p>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.  </p><p>This includes our yacht loan business. Yacht loans are simply not in line with our mission to help <i>everyday </i>Americans on their path to financial health and we plan to grow our auto refinance business to take its place.  </p><p>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.   </p><p>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.  </p><p><b>These business model changes will have no material effects on our business operations </b>and we plan to report more details when we issue our Full Year 2021 and Q4 earnings in a few weeks. </p><p><i>Scott Sanborn CEO </i> </p><p>LendingClub</p><hr/><p><i><b>Safe Harbor Statement</b></i></p><p><i>Some 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. </i></p>

Related Impact

{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.

<p>A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.</p><h2>What is Revolving Credit?</h2><p>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.</p><h2>How Does a Revolving Line of Credit Work?</h2><p>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.</p><h3>Types of Revolving Credit</h3><p>The most common revolving credit products are lines of credit and credit cards.</p><p><b>Lines of credit </b>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. </p><p>Some lines of credit may be limited in how the funds can be used, such as only for balance transfers from credit cards.</p><p><b>Credit cards</b> 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. </p><p>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.</p><h3>Why is Revolving Credit Important?</h3><p>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.</p><p>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.</p><p>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.</p><p>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.</p><h3>What Are the Risks of Revolving Credit?</h3><p>Revolving credit has some drawbacks you should be aware of.</p><p><b>Collateral risk:</b> 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.</p><p><b>High interest rates:</b> Revolving credit typically has higher interest rates than installment credit. Interest rates for most credit cards and many lines of credit are also <i>variable</i>, meaning they can change over time based on economic conditions.</p><p><b>Excessive debt: </b>If you only make the minimum payment on a credit card, you could accumulate a large balance. Credit card interest is typically <i>compounded</i>, 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.</p><h3>How Does Revolving Credit Affect Your Credit Score?</h3><p>Revolving credit could help your credit score in several ways.</p><ul><li><p><b>On-time payments:</b> Making revolving credit payments on time could boost your credit, since timely payments are a major factor in your FICO®  Score.</p></li><li><p><b>Responsible credit utilization:</b> 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.</p></li><li><p><b>Diverse credit mix:</b> A variety of accounts, including installment credit and revolving credit, could show lenders you can successfully manage different types of debt.</p></li></ul><p>Revolving credit could also have negative impacts on your credit score when not managed responsibly. </p><p><b>Late payments: </b>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.</p><p><b>Excessive credit utilization:</b> Consistently carrying balances that exceed 30% of your available credit limit can reduce your credit score. </p><p><b>Hard inquiry:</b> When you apply for revolving credit, creditors perform a credit check called a <i>hard inquiry</i>, which could cause a small, temporary dip in your credit score.</p>

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

<h2>What is Annual Percentage Rate (APR)?</h2><p>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. </p><p>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.</p><h2>How is Annual Percentage Rate Calculated?</h2><p>To calculate APR on a loan, you’ll need to know a few other numbers first:</p><p><b>Interest:</b> The total interest charges paid over the life of the loan, also known as the cost of borrowing money.</br><b>Fees:</b> Review the terms and conditions of the loan to find the fees that apply to your loan. Fees vary by loan type and lender. </br><b>Principal:</b> The original loan amount.</p><p><b>Days in the Loan Term (n):</b> 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.</br></br>The formula to calculate APR is: </p><img src="//images.ctfassets.net/orqped9h4wgz/6cJEgR4ftSGoIaSuKLlek6/a3ce252e07839182be4e7550cd09e08a/Formula-Calculate-APR.png" alt=""/><p>The steps to calculate APR are:</p><ol><li><p>Find the interest charges</p></li><li><p>Add the fees</p></li><li><p>Divide the sum by the principal balance</p></li><li><p>Divide by the number of days in the loan’s term</p></li><li><p>Multiply by 365</p></li><li><p>Multiply by 100</p></li></ol><h3>Credit Card APRs</h3><p>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.</p><p>Under the Truth in Lending Act, passed in 1968, lenders and other financial institutions must disclose APR when offering credit. </p><h2>Why is Annual Percentage Rate Important?</h2><p>Knowing the annual percentage rate helps you understand the true cost of borrowing. </p><p>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.</p><h2>Are There Different Types of APRs?</h2><p>There are different categories of APRs depending on the type of financial product.</p><h3>Credit Card APRs</h3><p>Credit cards have several APRs that may apply to different transactions or account activities.</p><ul><li><p><b>Purchase APR: </b>The rate you pay for purchases. </p></li><li><p><b>Balance transfer APR: </b>The rate applied if you use a card to pay down balances on other credit cards or loans. </p></li><li><p><b>Cash advance APR:</b> The rate charged on ATM withdrawals or cash-equivalent transactions, like money-order purchases. </p></li><li><p><b>Introductory APR: </b> 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.</p></li><li><p><b>Penalty APR</b>:  A higher-than-normal rate that results from violating a card’s terms of service. </p></li></ul><h2>What’s the Difference Between Fixed and Variable APRs?</h2><p>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.<b>   </b></p><h3>Adjustable-Rate Mortgages</h3><p>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. </p><h2>What Affects APR?</h2><p>The APR you&#39;re offered depends on a few factors: </p><ul><li><p>Whether a loan or line of credit is secured or unsecured</p></li><li><p>Current economic conditions</p></li><li><p>Your credit history</p></li></ul><p>Lenders may also consider your income and assets, down payment, and where you live when determining your APR.</p><h2>How Do You Get a Good APR?</h2><p>Getting the best APR on a loan or credit card typically requires shopping around. </br></br>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.</p><p>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. </br></br>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.</p>

{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><p>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.  </br> </br>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. </p><h2>How Does Accrued Interest Work? </h2><p>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).  </p><h2>Accrued Interest on Loans </h2><p>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. </p><p>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. </p><p>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.  </p><p> </p><h2>Accrued Interest on Bank Accounts </h2><p>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. </p><p>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.  </p><p>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. </p><p>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.  </p><p> Calculation for daily interest rate: </p><p>0.05 / 365 = 0.000136986 </p><p> Calculation for first day’s interest: </p><p>0.000136986 x 10000 = 1.36986 </p><p> 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"><u>annual percentage yield</u></a>,  is 5.1267%. </p><p>Compounding interest increases your savings over time, especially in a rising interest rate environment. </p><h2>Accrued Interest on Bonds </h2><p>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. </p><p>Interest on bonds does not compound; that is, you don’t earn interest on your interest. </p><h2>How Accrued Interest Affects Borrowers </h2><p>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.   </p><p>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. </p><p>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.  </p><p>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.  </p><p>If you want to avoid a growing balance, consider making interest-only payments while you&#39;re still in school. </p><h2>How Accrued Interest Benefits Savers </h2><p>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. </p><p>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. </p><h2>How Is Accrued Interest Calculated? </h2><p>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. </p><p>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. </p><h2>What Is an Example of Accrued Interest?  </h2><p>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: </p><p>Calculation for daily interest rate: </p><p>0.12 / 365 = 0.000328767123288 </p><p>Calculation for daily accrued interest: </p><p>0.000328767123288 x $20,000 = $6.58  </p><p> In other words, you&#39;ll have $6.58 in daily accrued interest. Over 30 days, that amounts to $197.40.</p>

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.

<p>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.</p><h2>What Is a Charge-Off?  </h2><p>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. </p><h2>How Does a Charge-Off Work? </h2><p>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.  </p><p>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. </p><p>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. </p><h2>Will a Charge-Off Impact Your Credit Score? </h2><p>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. </p><p>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.  </p><p>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.  </p><h3>How Can You Repair a Charge-Off? </h3><p>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. </p><p>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.  </p><p>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.  </p><p>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. </p><h3>How Can You Limit Charge-Off Damage? </h3><p>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. </p><p>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. </p><p>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.  </br> </br>To contact the credit bureaus:  </p><ul><li><p><a href="https://www.equifax.com/personal/credit-report-services/credit-dispute/"><u>Equifax</u></a> </p></li><li><p><a href="https://www.experian.com/contact/personal-services-contacts.html"><u>Experian</u></a> </p></li><li><p><a href="https://www.transunion.com/credit-disputes/dispute-your-credit"><u>TransUnion</u></a> </p></li></ul><p>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. </p>

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

<p> An interest rate that remains the same for a set time, usually for the life of the loan.</p><h2>What Is a Fixed Interest Rate?</h2><p>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.</p><h2>How Do Fixed Interest Rates Work?</h2><p>When you take out a loan with a fixed interest rate, your loan terms will define the fixed rate period.</p><p>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.</p><p>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.</p><h2>What Is the Difference Between Fixed and Variable Interest Rates?</h2><p>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.</p><h3>What Benefits Do Fixed Interest Rates Offer?</h3><p> Having a fixed rate loan offers several benefits for your finances.</p><ul><li><p><b>Financial Predictability. </b>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.</p></li><li><p><b>Eliminate Interest Rate Risk. </b>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.</p></li><li><p><b>Potentially Lower Borrowing Costs. </b>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.</p></li></ul><h3>What Are the Drawbacks to Fixed Interest Rates?</h3><p>While a fixed interest rate can help you plan your finances for the long term, there are a few drawbacks to consider.</p><ul><li><p><b>Potentially Higher Rates. </b>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.</p></li><li><p><b>Risk in Decreasing Interest Rate Environments. </b>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.</p></li><li><p><b>Refinancing Costs. </b>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.</p></li></ul><h2>What Can You Do to Get a Good Fixed Interest Rate?</h2><p>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.</p><h2>Can You Switch from a Variable Interest Rate to a Fixed Interest Rate?</h2><p>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.</p><h3>Are Credit Card Interest Rates Fixed?</h3><p>Generally, credit card interest rates are variable, not fixed.</p><h3>Are Student Loan Interest Rates Fixed?</h3><p>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.</p>

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