<p><a href="https://assets.ctfassets.net/orqped9h4wgz/6c2Ra5AsoZ9wJccjaHpJ38/80451aa2d77f0bfea5581dc64ed42bfb/eCSBV_Agreement_2024Feb.pdf">Download PDF</a></p><h3>Authorization for the Social Security Administration to Disclose Your Social Security Number Verification</h3><p>I authorize the Social Security Administration (SSA) to verify and disclose to LendingClub Bank through Socure Inc., their service provider, for the purpose of this deposits bank application whether the name, Social Security Number(SSN) and date of birth I have submitted matches the information in SSA records. My consent is for one-time validation within the next 90 days.</p>

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Your credit score plays a key role in nearly every aspect of your financial life—from the rates you receive on loans to applying for utility services and cellphone plans. Given how often those numbers will come into play, it is a smart move to aim for the best scores you can. 

<p>Your credit scores are designed to predict how likely you are to repay a loan as agreed. These scores are calculated using information found in your credit reports—including payment history, length of credit history, outstanding debt, and more. Having higher credit scores can make it easier to qualify for a loan, credit card, or mortgage. In this article, we’ll take a look at what factors affect your credit scores the most.<sup>[1]</sup>  </p><h2>What Factors Make Up Your Credit Scores? </h2><p>Credit-scoring companies use software to analyze the information found in your credit reports. <a href="https://www.myfico.com/credit-education/whats-in-your-credit-score"><b><u>FICO</u></b></a><a href="https://www.myfico.com/credit-education/whats-in-your-credit-score"><b><u><sup>®</sup></u></b></a><a href="https://www.myfico.com/credit-education/whats-in-your-credit-score"><b><u> Score</u></b></a> and <a href="https://www.vantagescore.com/press_releases/the-complete-guide-to-your-vantagescore/"><b><u>VantageScore</u></b></a> are the two main credit-scoring companies, with the Fair Isaac Corporation (FICO) Score being used by about 90% of top lenders.<sup>[1] [2] [3] [5]</sup>  </p><p>Many other credit scores exist, so it’s important to note that a lender may base its decision on another score entirely.<sup>[1]</sup>  </p><p>Scoring software programs use algorithms to review your credit history and financial habits. Scoring model calculations are a trade secret, but the factors that affect your FICO score and how they’re weighted are public knowledge.<sup>[1]</sup>  </p><p>Below is a list of the factors that influence your FICO score and how each factor is weighted. The percentages reflect the importance of each factor. <sup>[2]</sup> </p><ul><li><p>Payment history: 35% </p></li><li><p>Credit utilization: 30% </p></li><li><p>Length of credit history: 15% </p></li><li><p>Credit mix: 10% </p></li><li><p>New credit: 10% </p></li></ul><p>VantageScore and other credit models may use slightly different criteria, but knowing how the FICO score works can help if you’re trying to improve your credit in general.<sup>[4]</sup> </p><h2>These 5 Factors Affect Your Credit Scores the Most </h2><p>Understanding how your credit scores are determined can help you improve your credit over time. Here’s a closer look at what’s considered during the scoring process. </p><h3>Payment History: 35% </h3><p>Payment history is the most important factor affecting your credit scores because it helps predict whether you’ll fall behind on future bills. Even just one payment that’s 30 days late can cause your scores to dip. Foreclosure, bankruptcy, or an account sent to collections can have more serious consequences to your credit scores. <sup>[2]</sup> </p><p>Consistently making on-time payments can help keep your credit scores high. Missed payments can happen, but it’s important to get caught up on your bills as soon as possible. Over time, if you’re able to demonstrate a more positive payment history, your credit score will likely improve.  </p><h3>Credit Utilization: 30% </h3><p>Credit utilization is the amount you owe compared to your available credit. It’s calculated as a percentage and is the second most important factor in determining your credit scores. For example, if you have a $200 balance on a credit card with a $1,000 limit, then your utilization on that card is 20%. Credit-scoring models usually calculate utilization for each of your accounts separately as well as your total credit utilization across all accounts.<sup>[2]</sup> </p><p>People with credit utilization under 10% tend to have the highest credit scores, while utilization rates over 30% can negatively affect your credit scores. Try paying down credit cards with high balances to help improve your credit utilization and give your scores a boost. Then, stay on top of your balances to keep utilization as low as possible.  </p><h3>Length of Credit History: 15% </h3><p>Credit-scoring models also check how long each of your accounts has been open to evaluate your experience with managing debt. The age of your accounts carries less weight than other factors. In general, the longer your credit history, the higher your score is likely to be. The FICO score checks the age of your newest and oldest accounts, plus the average of all your accounts.<sup>[2]</sup> </p><p>The length of time you’ve had open credit cards and loans collectively make up your credit history. Keeping your credit cards open can help improve your credit history over time. (Keeping a loan account open for the long haul may technically help your credit. Open loans will elevate your DTI ratio and increase your interest costs, so it’s best to pay off any loans as soon as possible.) </p><p>You may close a credit card or loan because you paid off the debt or closed the account by choice. FICO can still use your closed accounts to calculate the age of your credit history. When you close an account in good standing, with no late payments, it often remains on your credit report for up to 10 years.<sup>[6]</sup> </p><h3>Credit Mix: 10% </h3><p>Your credit mix, or the different types of accounts on your credit report, also helps determine your credit scores. While your credit mix isn’t nearly as important as your payment history or age of accounts, it can help show lenders that you can handle multiple types of debt. For instance, you may have taken out auto loans, student loans, mortgages, revolving credit such as credit cards, and installment loans like <a href="https://www.lendingclub.com/resource-center/personal-loan/top-reasons-to-get-a-personal-loan"><b><u>personal loans</u></b></a>. People with high credit scores often have a mix of several different types of accounts.<sup>[2]</sup>  </p><p>You may decide to open a new account to boost your credit scores. For instance, if you only have a student loan in your credit history, you may consider opening a retail credit card with a lower limit. Before opening any accounts, be sure you can afford to take on extra debt and make any payments on time. </p><p>Keep in mind that your credit mix is a relatively minor factor—so adding the new account might have a small impact on your scores.   </p><h3>New Credit: 10% </h3><p>A new credit account can help improve your credit mix and increase your total available credit. It’s important to be aware that each credit-scoring system may look at new credit differently. Applying for new accounts may ding your credit—especially if you apply for several cards in a short period.<sup>[2]</sup> </p><p>Credit-scoring models know that people often shop around for the best rates before taking out installment loans, such as mortgages. If you submit applications for installment loans in a short time frame, typically two weeks, the credit-scoring system usually counts all of the applications as one hard inquiry. This has less of an impact on your credit scores.  </p><h2>What Doesn’t Affect Your Credit Score? </h2><p>Payment history, credit utilization, age of accounts, type of accounts, and how often you apply for new credit all play a role in how your credit scores are calculated. Other factors won’t have an impact at all.<sup>[7]</sup> </p><p>Here’s a look at some pieces of information that aren’t factored into your FICO score: </p><h3>Checking Your Own Credit Scores </h3><p>Checking your own credit score regularly is a good way to keep tabs on your credit scores and look out for any unexpected or fraudulent information. You may also choose to check your score before applying for a credit card or loan. Checking your own credit score is considered a soft inquiry. Unlike hard inquiries, these won’t impact your credit.<sup>[7]</sup> </p><h3>Checking Your Loan Rates </h3><p>With some creditors, like LendingClub Bank, checking your loan rate generates a soft credit inquiry, which won’t impact your scores. Just keep in mind a hard inquiry is likely when your loan is funded which could affect your credit score.<sup>[7]</sup> </p><h3>Debt-to-Income Ratio </h3><p><a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-debt-to-income-ratio-how-to-improve-it"><b><u>Debt-to-income</u></b></a> (DTI) ratio, a comparison of your monthly income and bills, is often an important factor in lending decisions. A lower DTI ratio may help you get approved with more favorable loan offers because it means less of your income goes toward debt payments. Your DTI ratio doesn’t impact your credit score. However, having a lot of debt or maxing out your credit cards can negatively impact your credit scores.<sup>[7]</sup> </p><h3>Your Personal Information </h3><p>A credit report has a section that contains personal information such as your name, Social Security number, date of birth, current address, and previous addresses. This information helps verify your identity and doesn’t affect your credit scores. </p><p>Your credit reports won’t include demographic information like gender, ethnicity, race, religion, immigration status, political affiliations, or marital status. This information also won’t affect your credit scores.<sup>[7]</sup> </p><h3>Your Employer, Income, and Net Worth </h3><p>Your credit reports won’t include information about your income or net worth but may contain information about your current and previous employers. Lenders may consider your employment status and financial health when you apply for credit, but this information won’t affect your credit scores.<sup>[7]</sup> </p><h3>Medical Debt </h3><p>As of 2023, credit reporting companies removed medical debt that’s less than a year old and all paid medical debt from credit reports. Steps are also being taken to remove medical debt under $500. If you find medical debt on your credit reports, you may be able to take action to have it removed.<sup>[8]</sup> </p><h2>Do Personal Loans Affect Your Credit Scores? </h2><p>A personal loan is a type of installment loan that can be used for almost any purpose, including <a href="https://www.lendingclub.com/personal-loan/credit-card-consolidation-loan"><b><u>debt consolidation</u></b></a> or paying for a large expense like a wedding, vacation, or home repairs. Personal loans are generally <a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-an-unsecured-personal-loan"><b><u>unsecured</u></b></a>, require no collateral to qualify, and are available at banks, credit unions, and online lenders.   </p><p>Personal loans may impact your credit scores in a few different ways. Here are a few things to consider:</p><ul><li><p><b>Credit inquiries:</b> Checking your rate may only generate a soft credit inquiry on a person’s credit report, which is visible only to that person. A hard credit inquiry, which is visible to that person and others, and which may affect that person’s credit score, only appears on the person’s credit report if and when a loan is issued to the person. Credit eligibility is not guaranteed. <a href="https://www.lendingclub.com/resource-center/personal-finance/key-differences-of-a-soft-credit-check-vs-hard-credit-check">Learn more about soft vs. hard credit inquiries</a>. </p></li><li><p><b>Reported to credit bureaus: </b>Making on-time loan payments can help boost your payment history and improve your credit scores, while late or missed payments have a negative effect.<sup>[9]</sup> </p></li><li><p><b>Adds to credit mix:</b> Personal loans make a great addition to your credit mix, which can help raise your scores—even after the loan is closed (as long as you have a positive payment history).<sup>[2]</sup>  </p></li></ul><h2>5 Quick Tips to Improve Your Credit Scores </h2><p>Once you understand what affects your credit, it can be easier to take action to <a href="https://www.lendingclub.com/resource-center/personal-loan/how-to-improve-credit-score"><b><u>improve your credit score</u></b></a> and build long-lasting credit habits.   </p><ol><li><p><b>Pay your bills on time.</b> Show you can manage credit by making your minimum monthly payment on time each month.<sup>[10]</sup>   </p></li><li><p><b>Pay down revolving accounts. </b>Tackle balances on revolving credit accounts, like credit cards, personal lines of credit, and home equity lines of credit (HELOCs), to help lower your credit utilization.<sup>[10]</sup>  </p></li><li><p><b>Bring past-due accounts current.</b> Pay off past-due balances or work with your lender to bring your account current.<sup>[10]</sup> </p></li><li><p><b>Limit how often you apply for new credit.</b> Be selective when applying for new loans, credit cards, and other types of credit to avoid opening too much credit during a short amount of time.<sup>[10]</sup>  </p></li><li><p><b>Don’t close unused credit card accounts.</b> Keep credit cards open, even if you don’t use them often, to keep credit utilization low.<sup>[10]</sup> </p></li></ol><h2>The Bottom Line </h2><p>Many factors affect your credit scores—and some more than others. But with careful attention to your finances, you can often improve your score over time. Keep in mind that payment history and credit utilization make up nearly two-thirds of your scores, so it’s important to pay your bills on time and keep balances low.<sup>[1][2]</sup>  </p><p><a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags"><b><u>Check your credit reports</u></b></a> regularly to keep tabs on your scores and look for inaccuracies. You can 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>.<sup>[10]</sup>     </p><hr/><ol><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-credit-report-and-a-credit-score-en-2069/"><u>Consumer Financial Protection Bureau</u></a>. “What is the difference between a credit report and a credit score?” </p></li><li><p><a href="https://www.myfico.com/credit-education/whats-in-your-credit-score"><u>myFICO</u></a>. “What&#39;s in my FICO Scores?”  </p></li><li><p><a href="https://www.fico.com/en/newsroom/fico-score-remains-most-widely-used-credit-score-securitization-market-keeping-lender"><u>myFICO</u></a>. “FICO Score Remains the Most Widely Used Credit Score in the Securitization Market, Keeping Lender Confidence.”  </p></li><li><p><a href="https://www.vantagescore.com/press_releases/the-complete-guide-to-your-vantagescore/"><u>VantageScore</u></a>. “The Complete Guide to Your VantageScore.” </p></li><li><p>MyFICO </p></li><li><p><a href="https://www.experian.com/blogs/ask-experian/when-are-closed-accounts-deleted/"><u>Experian</u></a>. “When Are Closed Accounts Deleted?” </p></li><li><p><a href="https://www.myfico.com/credit-education/credit-scores/whats-not-in-your-credit-score"><u>myFICO</u></a>. “What&#39;s not in my FICO Scores.” </p></li><li><p><a href="https://www.consumerfinance.gov/about-us/blog/medical-debt-anything-already-paid-or-under-500-should-no-longer-be-on-your-credit-report/"><u>Consumer Financial Protection Bureau</u></a>. “Have medical debt? Anything already paid or under $500 should no longer be on your credit report.&quot; </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-personal-installment-loan-en-2114/"><u>Consumer Financial Protection Bureau</u></a>. “What is a personal installment loan?” </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-and-keep-a-good-credit-score-en-318/"><u>Consumer Financial Protection Bureau</u></a>. “How do I get and keep a good credit score?”</p></li></ol><p></p>

To open a business bank account, you’ll need to choose a bank, gather documentation to apply, and have funds on hand for an initial deposit.  

<p>Small business owners, including sole proprietors, typically need to open a business bank account to keep business and personal financial activities separate. Opening a business bank account also comes with other benefits, like streamlined accounting, a boost to your company’s credibility, protection of your personal assets, and helpful banking services like business loans, credit cards, and lines of credit.  </p><p>Keep reading to learn how to open a business bank account and what type of information you need to apply.  </p><h2>How Do You Open a Business Bank Account? </h2><p>Opening a business bank account is a straightforward process. But before you can open an account for your company, it’s important to follow these steps. </p><h3>1. Determine What Kind of Account You Need </h3><p>Businesses can usually choose from several different kinds of accounts, including checking, savings, or merchant services. While checking and savings accounts are common and can be used by most businesses, a merchant services account is a special type of bank account designed to accept credit card payments from customers. These are usually linked to a checking account.  </p><p>Depending on your business structure, you may be legally required to have a certain type of account. If you’re not sure what type of business account you need, consider talking to a business advisor like a certified public accountant (CPA), lawyer, or bank representative.  </p><h3>2. Shop Around  </h3><p>You can find business bank accounts at banks, credit unions, and online lenders. When selecting an institution, it’s important to consider if you need access to a physical branch or prefer to bank online. Rates, fees, minimum balance requirements, and other account features can vary widely between banks, so be sure to compare:   </p><ul><li><p>Special introductory offers </p></li><li><p>Interest rates for savings accounts, checking accounts, and lines of credit </p></li><li><p>Monthly account fees </p></li><li><p>Transaction fees for incidentals like wire transfers, nonsufficient funds, and overdrafts </p></li><li><p>Minimum account balance fees </p></li><li><p>ATM access </p></li><li><p>Branch access </p></li><li><p>Bill pay features </p></li><li><p>Accounting software integration capabilities </p></li><li><p>Additional products like credit cards and small business loans </p></li></ul><h3>3. Prepare Your Documents </h3><p>Before you apply online or head to your local bank branch to open a business bank account, you’ll need to gather some important documents. Requirements can vary from bank to bank, so it&#39;s a good idea to confirm them with the bank in advance. You can often find a list of required documents on a bank’s website, or you can call the bank to ask.  </p><h3>4. Fund Your Account </h3><p>Some banks may let you open a business account for free, but you’ll typically need to make an initial deposit. If a deposit is required, be sure to have cash or check handy. If you open a business account at the same bank where you do your personal banking, you may be able to transfer funds from one account to another.  </p><h2>What Do You Need to Open a Business Bank Account? </h2><p>Preparing your information and documents ahead of time can help ensure a seamless experience when opening a business bank account. While requirements differ between banks, here’s a closer look at what’s commonly needed to open a business bank account.  </p><h3>Employer Identification Number (EIN) </h3><p>The Internal Revenue Service (IRS) uses your employer identification number, or EIN, to identify your business entity. (You may see these listed as a “federal tax identification number,” and they’re the same.) If you don’t have one already, you can apply for a free EIN <a href="https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online"><b><u>online through the IRS</u></b></a>. Sole proprietors may be able to use their Social Security numbers to open a business account instead.  </p><h3>Business Formation Documents </h3><p>Most business types, including partnerships, S-Corporations (S-Corps), and limited liability companies (LLCs), have formation documents that define the structure of the business. Sometimes called articles of incorporation, your formation documents establish your company’s legal structure. Sole proprietors don’t need articles of incorporation.  </p><h3>Ownership Agreements </h3><p>Certain types of business structures, like S-Corps and LLCs, are required to designate ownership in the company. Ownership is usually demonstrated by partnership or membership interest in a company or by issuing shares of stock. Ownership agreements outline how ownership is distributed among company owners.  </p><h3>Personal Identification </h3><p>You’ll likely need to present at least one government-issued photo ID, like a driver’s license or passport, to open a bank account. Some banks require two forms of identification, so be sure to check what’s required with your bank.  </p><h3>Business License </h3><p>Many types of businesses are required to obtain a license to operate. Regulations can vary by industry and local laws, but if your business does require a license, you’ll likely need to have this handy when you open a business account.  </p><h3>DBA Certificate </h3><p>Some businesses are required to register the company’s trade name (also called a fictitious or assumed name) with a “doing business as” or DBA certificate. Requirements vary depending on where your business is located and your company’s legal structure. But if you do have a DBA certificate, be sure to bring it along when you open your business account.  </p><h2>5 Benefits of Opening a Business Bank Account </h2><p>Whether you’re running a small business, freelancing, or taking on a side gig hustle, a business bank account can help your small business in many different ways. Here’s a closer look at some of the key benefits to opening a business bank account.   </p><ol><li><p><b>Streamlined financials:</b> A business bank account allows you to easily keep business bookkeeping separate from your personal finances. You can use your account to track sales and expenses, pay bills, or send wire transfers. Plus, you can often link your account to your preferred accounting software and authorize employee access to the account.   </p></li><li><p><b>Liability protection: </b>Certain types of business structures, like S corps or LLCs, may be required to have a business account to ensure personal and company finances remain separate.  </p></li><li><p><b>Payment processing:</b> Linking a business account to your company’s payment processing platform can help you keep business payments separate from personal transactions. This is especially important when tracking sales for tax purposes.  </p></li><li><p><b>Professional image: </b>A business bank account can give your business a boost in credibility and help you build trust with customers and vendors—especially if you order checks with your business logo or add your branding to your payment experience.  </p></li><li><p><b>Access to other financial tools: </b>Once you have a business account, you may be able to get a business debit card, credit card, loan, or line of credit through the same bank.  </p></li></ol><h2>The Bottom Line </h2><p>If you’re a business owner, it’s a good idea to do your banking through a business bank account, instead of your personal checking or savings account. With many banks to choose from, it pays to do your research to find a bank that will meet your business’s financial needs today—and as your business grows. For instance, you can start with a <a href="/business-deposits/tailored-checking">business checking account</a> and add a savings account or business credit card down the line. Your accountant can help point you in the right direction if you’re unsure where to start or what type of business account you may need.  </p>

Identity theft happens when your personal information is stolen and used without your permission. Understanding the warning signs, knowing how to protect your information, and what to do if your identity is stolen can help keep your identity safe and recover faster. 

<h2>What Is Identity Theft? </h2><p>Identity theft is the fraudulent collection and use of your private personal or financial information, like your Social Security number, name and address, credit card numbers, bank account numbers, and medical insurance numbers. At the very least, identity theft can cause unwanted stress. </p><p>In worst-case scenarios, identity thieves can attempt to apply for new credit accounts in your name, make fraudulent purchases, submit health care claims, or file fraudulent tax returns in an attempt to collect your tax refund. In some cases, identity thieves sell the stolen information to other identity thieves on the dark web.<sup>[2]</sup> </p><p>Identity theft can result in financial loss, credit damage, medical debt, and IRS penalties and investigation. If you’re a victim of identity theft, you may need to set up new accounts and get new copies of your debit and cards. Depending on the severity and nature of the identity theft, you may need to file an identity theft report with the Federal Trade Commission (FTC) and get the police involved. Recovering from identity theft often takes months—and sometimes years.<sup>3</sup> </p><h2>Common Types of Identity Theft and Warning Signs </h2><p>Understanding the most common types of identity theft can help you protect your personal information and finances. Here’s a closer look at what to watch out for and what to do if you suspect you’ve been an identity theft victim. </p><h3>Digital identity theft </h3><p>Digital identity theft happens when your personal information is accessed through the internet. It can take many forms including Wi-Fi hacking, malware activity, phishing attacks, and data breaches.  </p><p>Here’s a closer look at warning signs of digital identity theft and what to do next. </p><h3>Wi-Fi hacking </h3><p>Using public Wi-Fi to browse the web can put you at risk for identity theft. Major sites are generally safe. On lesser-known sites, thieves can easily intercept private information on unsecured networks. Never enter private information like credit card details or your Social Security number on unknown sites.  </p><p>If you see suspicious charges on your financial statements or new accounts on your credit reports, you may need to report the fraud to your bank and the three major credit bureaus. Your bank can freeze your accounts and reimburse any fraudulent charges. You can also freeze your credit to prevent new accounts from being opened in your name. If someone has already opened new accounts under your name, reach out to the provider to close them, and report the information to the credit bureaus. In severe cases, you may need to call the police. <sup>[2] [4]</sup> </p><h3>Phishing emails and text messages </h3><p>Watch out for messages that look like they’re coming from reputable sources. These messages are often an attempt to get you to open a malware-infected attachment or click through to fake websites where you enter your personal information.  </p><p>If you receive a suspicious-looking message, do not open it. When possible, report as “phishing” or “spam” and then delete the message. Try not to click on any links or attachments if you open a phishing message by accident. For additional protection, consider adding malware-protection software to your devices. <sup>[2] [4]</sup> </p><h3>Data breaches </h3><p>Data breaches occur when identity thieves gain access to sensitive data, like usernames, passwords, addresses, and credit card information. You may hear about a data breach on the news, or if you have a compromised account, you may be notified to take special action like resetting your password.  </p><p>You can minimize risk after a breach by using different login information for all of your accounts and signing up for identity theft protection services. These services will track your accounts, monitor the dark web for your personal information, and help you recover after the breach. <sup>[2] [4]</sup> </p><h3>Mail theft </h3><p>Fraudsters may also steal from your mailbox, trash, or recycling to get their hands on documents like your bank and credit card statements. If they find personal and financial information in the paperwork, they may be able to use it to make purchases, open new accounts, or run other scams. Thieves may also intercept credit card offers or other credit promotions to open new accounts in your name.  </p><p>Shred mail and financial statements before tossing them in the trash to prevent private data from getting into the wrong hands. Or sign up for digital statements to reduce the amount of mail you get. To further deter thieves, consider setting up cameras and locking your garbage and recycling cans.  </p><p>If you suspect someone has stolen or tampered with your mail, keep an eye out for fraudulent activity. Check your financial statements for fraudulent charges, look through your credit reports for new accounts opened in your name, and review your health insurance claims for fraud. Alert your bank and all three credit agencies, so they can take appropriate action to close your accounts and freeze your credit file. Consider calling the police to file a report. <sup>[2] [4]</sup> </p><h3>Credit card theft </h3><p>Thieves may be able to steal your credit card information<b> </b>using different methods. For instance, this may happen online when you enter your credit card information without using a secure internet connection or when you enter your card details into an unreliable website. Hackers may intercept information like your credit card number, security code, and expiration date.  </p><p>Thieves can use various methods to steal your credit card information. They might watch you type your card details in public settings such as libraries or cafes. They could also call you and attempt to phish for your credit card details or steal your smartphone to access the cards stored in your digital wallet. Additionally, new technology allows thieves to scan your card information while it’s inside your wallet or when you use it to make a purchase in public.  </p><p>If you suspect you’ve been a victim of credit card theft, contact your card issuer immediately. The issuer can cancel any fraudulent charges made on your card. Consider reporting the theft to the police, especially if your wallet or phone was stolen. You can also contact the credit bureaus to freeze your credit.<sup>[2] [4]</sup> </p><h2>7 Steps to Prevent Identity Theft </h2><p>You can never be too careful when it comes to protecting yourself from identity theft. Below are seven steps you can take to help protect yourself from identity theft and keep your information safe. </p><h3>1. Protect your devices with a password </h3><p>Add a password to your smartphone, laptop computer, tablet, and any other devices you use to connect to the internet. In the unlucky chance your device is lost or stolen, a password helps prevent access to personal information, mobile wallets, apps, and other private data stored on your device.   </p><p>For added security, consider using biometric tools like facial recognition or touch identification, commonly found on mobile phones, tablets, and some laptops. Be sure all device-tracking settings are turned on so you can locate your device if it goes missing. Some devices also allow you to remotely lock access or wipe all data. <sup>[2] [4]</sup> </p><h3>2. Use strong passwords </h3><p>Secure your online accounts and apps with strong passwords that include a mix of numbers, letters, and characters. Stay away from easy-to-guess passwords like pet names or important dates. For added security, consider using computer-generated passwords. A password manager, like iPhone’s Keychain, can help keep passwords safe.  </p><p>If you’re unable to use a strong password, experts recommend using a lengthy phrase with numbers and characters to better secure your private information. Try not to use the same password on multiple sites or apps. That way, if your password is compromised, criminals won’t be able to hack multiple accounts. <sup>[2] [4]</sup> </p><h3>3. Use two-step authentication </h3><p>Two-step authentication provides an additional layer of protection beyond a standard username and password. When you have two-step authentication turned on, you’ll sign into your account using your credentials and then provide additional information to verify your identity. For instance, you may need to type in a personal identification number (PIN) or a code sent to your phone or email.  </p><p>More advanced apps, like banking tools, may even allow you to add facial recognition or fingerprinting for additional protection. Ideally, two-step authentication should be used whenever available. At the very minimum, you should add two-step authentication to protect financial information in your online credit card and bank accounts, P2P payment apps, and social media accounts. <sup>[2] [4]</sup> </p><h3>4. Protect personal information </h3><p>Identity thieves are typically after personal details like your name, address, phone number, date of birth, and Social Security number. Keep your guard up when entering personal information into websites and apps—especially if you’re using a public internet connection. Don’t let anyone see what you’re typing, and consider adding a privacy screen protector to shield your device from prying eyes. Install a VPN, or virtual private network, for further protection.  </p><p>When sharing personal information by phone, be aware of who may be listening to your conversation. It’s also important to protect your personal documents. Don’t carry private paperwork like your Social Security card or birth certificate. And be sure to shred ATM receipts, credit card statements, actual credit cards, and bank statements before throwing them away. Criminals have been known to rummage through garbage and recycling bins looking for sensitive information. <sup>[2] [4]</sup> </p><h3>5. Be careful when disclosing financial information </h3><p>Never give your credit card number over the phone, unless you made the call and you’re certain you&#39;re dealing with a legitimate company. And if a random caller contacts you, don’t provide any private or personal information—like your full name, birth date, or Social Security number. Learn how to spot the <a href="https://www.lendingclub.com/resource-center/personal-loan/how-to-protect-yourself-from-scams"><b><u>tricks scammers use</u></b></a>.   </p><p>For example, representatives from a legitimate lender or financial institution will never ask you to wire them money over the phone. Thieves may also try to access your financial information online or over text. You may receive a phishing email asking you for credit card information to cover the cost of an order or shipping. Never provide financial details online unless you’re sure the company is trustworthy. <sup>[2] [4]</sup> </p><h3>6. Be mindful on social media </h3><p>Think carefully about what you post on Facebook, Instagram, TikTok, LinkedIn, and other social media apps. Identify thieves may use information shared on social media to hack usernames and passwords. For example, avoid sharing your pet’s first name on social media, especially if you’ve used the name to answer a security question.  </p><p>Additionally, watch out for connection requests or messages from people you don’t know. These could be attempts to steal your information. Sharing personal details or financial information over social media (or dating apps) is also not advised.  </p><h3>7. Regularly review credit reports and financial statements </h3><p>Review your bank account and credit card statements monthly. Notify your financial institution, bank, or credit card company if you find any unauthorized transactions. Make sure you review your <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags"><b><u>credit reports</u></b></a> at least every few months. You can access free copies of your credit reports once a week from the three major credit bureaus—Equifax, Experian, and TransUnion—at <a href="http://annualcreditreport.com/"><b><u>AnnualCreditReport.com</u></b></a>. <sup>[2][4]</sup> </p><p>Alert the credit bureau in writing if you find errors or signs of identity theft, such as new accounts you didn’t open. Follow up with the credit bureaus until they remove any inaccurate information. If you lose your wallet, credit card, or debit card, don’t wait for a fraudulent charge before contacting your bank or financial institution. Immediately freeze the accounts to prevent fraudsters from making purchases, and sign up for a credit-monitoring service that will alert you about suspicious transactions.<sup> [2][4]</sup> </p><h2>How to Report Identity Theft </h2><p>Falling victim to identity theft can be a stressful time—both mentally and financially. You aren’t alone, and there are processes in place to help you recover. </p><h3>1. Add a fraud alert to your credit report </h3><p>A fraud alert prevents an identity thief from opening up more accounts. As soon as you make the report to one credit bureau, that bureau is required to notify all the others on your behalf. You can contact any of three major credit bureaus to place a fraud alert on your credit report:  </p><ul><li><p>Equifax: (800) 685-1111 </p></li><li><p>Experian: (888) 397-3742 </p></li><li><p>TransUnion: (800) 909-8872 </p></li></ul><p>Keep in mind, that a fraud alert essentially freezes your credit report. You won’t be able to open new accounts unless you contact the bureau and ask it to temporarily lift the security freeze. This is helpful in preventing fraudsters from opening new accounts, but it adds a step if you need to apply for credit.<sup>[5]</sup> </p><h3>2. Report and close all fraudulent accounts and activity </h3><p>Contact the fraud department of each company where a fraudulent account was opened in your name. Ask for written confirmation that the accounts have been closed. Report unauthorized charges on existing accounts; your lender may cancel any unauthorized charges and change your account number. <sup>[2] [4]</sup> </p><h3>3. File a police report </h3><p>The police report creates an official record that you were the victim of a crime. This will support your claims with the credit-reporting agencies and creditors as you work to remove fraudulent debts or accounts from your credit record. <sup>[2][4]</sup> </p><h3>4. File a complaint with the Federal Trade Commission </h3><p>Filing a report with the FTC helps the government track and respond to identity theft. You can file a report online or by calling (877) 439-4388. <sup>[2][4]</sup> </p><h2>The Bottom Line </h2><p>Identity theft is a very serious matter that can cost you time and money. Depending on the severity you may need to get the police involved, and it can take months or even years to recover. New scams and technology to steal your data occur frequently.  </p><p>Take steps to protect your personal and financial information, and consider using one of the many identity theft protection services available for added security. If you suspect you’ve been a victim of identity theft, take action immediately, or visit <a href="http://identitytheft.gov/"><b><u>identitytheft.gov</u></b></a><b> </b>to learn how to report identity theft and get help with a recovery plan. <sup>[2][4]</sup> </p><hr/><ol><li><p><a href="https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime"><u>Insurance Information Institute</u></a>. “Facts + Statistics: Identity theft and cybercrime.” </p></li><li><p><a href="https://www.usa.gov/identity-theft"><u>U.S. Government</u></a>. “Identity theft.”  </p></li><li><p><a href="https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft"><u>Internal Revenue Service</u></a>. “Taxpayer guide to identity theft.” </p></li><li><p><a href="https://consumer.ftc.gov/articles/what-know-about-identity-theft"><u>Federal Trade Commission</u></a>. “What To Know About Identity Theft.” </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-do-i-do-if-i-think-i-have-been-a-victim-of-identity-theft-en-31/"><u>Consumer Finance Protection Bureau</u></a>. “What to do if I’ve been a victim of identity theft?” </p></li></ol><p></p>

Sticking to a budget can be challenging, but having a clear goal and rewards can help you stay on track.

<p>Sticking to a budget can be challenging. The good news is that making mistakes is part of the learning process. When you start to get the hang of it, you’ll have a better understanding of your relationship with money and more control over your personal finances. We can’t give you a magic spell to keep your budget on track, but we’ve rounded up a few tips that can help you overcome challenges and stay inspired to stick to your budget.<sup>[1]</sup> </p><h2>Why It’s Important to Stick to Your Budget </h2><p>A <a href="https://www.lendingclub.com/resource-center/personal-finance/simple-steps-to-building-a-better-budget"><b><u>budget is an important tool</u></b></a> to help you keep your finances on the right path. But using a budget can also help you in other ways. Here’s a closer look at why sticking to a budget matters.<sup>[1]</sup></p><ul><li><p><b>Cover your expenses: </b>A budget helps ensure you have enough money to cover your bills and other financial responsibilities like housing, utilities, and transportation.<sup>[1][2]</sup>  </p></li><li><p><b>Track your spending:</b> Your budget provides visibility into your spending, so you can see where your money is going and pinpoint areas where you may be overspending.<sup>[1][2]</sup>  </p></li><li><p><b>Reach financial goals:</b> Whether you want to save for long-term goals, like retirement, or short-term goals, like a home repair project, a budget gives you the opportunity to turn your goals into reality.<sup>[1][2]</sup>  </p></li><li><p><b>Manage your debt:</b> A budget provides a clear picture of your debt, helping you determine the best path to <a href="https://www.lendingclub.com/resource-center/personal-finance/debt-snowball-vs-avalanche-which-should-you-choose"><b><u>tackle debt head-</u></b></a><a href="https://www.lendingclub.com/resource-center/personal-finance/debt-snowball-vs-avalanche-which-should-you-choose"><b><u>on</u></b></a>. <sup>[1] [3]</sup> </p></li><li><p><b>Improve your relationship with money:</b> A well-thought-out budget can teach you to be more intentional with your money choices, increase discipline, and help you understand what you truly value.<sup>[1][2]</sup>  </p></li><li><p><b>Reduce financial stress: </b>Paying bills and planning for the future can be stressful, but effective budgeting can help decrease money woes and create positive feelings about your financial future.<sup>[1][2]</sup>   </p></li></ul><h2>5 Ways to Stick to Your Budget </h2><h3>1. Get Excited About Your Goal </h3><p>Although <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-stop-living-paycheck-to-paycheck"><b><u>paying your bills on time</u></b></a> and <a href="https://www.lendingclub.com/resource-center/personal-finance/your-emergency-fund-the-essential-guide"><b><u>saving for an emergency fund</u></b></a> are certainly solid budgeting goals, sometimes it helps to have a goal that you can get really excited about. Maybe it&#39;s saving for a kitchen remodel, planning a wedding, or putting money away toward a down payment on a house. As you think about creating your budget, choose a goal that will keep you motivated, even when it gets tough to stay on track.<sup>[4] </sup> </p><h3>2. Set a Date </h3><p>Choosing a deadline to reach your goal is often a good way to stay on top of your budget. When you have a tangible finish line, like a dream vacation, you’ll have something to look forward to at the end of a certain amount of time. You can also set milestones along the way to celebrate your progress for extra motivation.  </p><h3>3. Create a Visual Reminder </h3><p>That You Interact With Daily From a simple spreadsheet to budgeting apps or even your bank’s online services, you’ve got many tools available to help you manage your budget. Just be sure to choose a tool that requires you to engage with your budget daily. Maybe you receive a reminder from an app every morning or put $20 a day in a jar. Research different budget tools and ideas to find the best fit for your lifestyle and money goals. Don’t be afraid to switch things up if something isn’t working for you. </p><h3>4. Remember Why You Created Your Budget </h3><p>Sometimes it can be hard to stick to a budget when you lose sight of why you set financial boundaries for yourself in the first place. When you get the urge to veer from your budget and spend impulsively, try to pause and remind yourself of your original goal. You can try techniques like putting up sticky notes, creating a vision board, or sending yourself “countdown” reminders.<sup>[4] </sup> </p><h3>5. Build in Some Fun </h3><p>Budgeting is a great way to save for serious goals and keep up with your bills. But it doesn’t have to be all work and no play. Try adding some fun things to your budget like an occasional meal out, special gift, or other treat. Rewarding yourself occasionally, like getting takeout only on Fridays, can help give you something to look forward to. It also makes getting through a week (or month) of sticking to a budget a little bit easier.  The </p><h2>Bottom Line </h2><p>Making a realistic budget often involves setting a goal, making a plan, and finding ways to stay the course. If you’re a beginner budgeter, remember it’s okay to start small. Try saving up $100, paying off a small bill, or skipping takeout on weeknights. </p><p>Once you’re feeling more confident in sticking to a budget, you can work your way up to bigger financial goals. If you’re feeling overwhelmed about where to start, many professionals are available to help, including financial coaches, financial advisors, or certified public accounts (CPAs).<sup>[1][2][3]</sup> </p><p></p><hr/><ol><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://consumer.gov/managing-your-money/making-budget#what-to-know"><u>Consumer.gov</u></a>. “Making a Budget.” </p></li><li><p><a href="https://www.consumerfinance.gov/about-us/blog/how-get-handle-debt/"><u>Consumer Financial Protection Bureau</u></a>. “How to get a handle on debt.” </p></li><li><p><a href="https://files.consumerfinance.gov/f/documents/cfpb_your-money-your-goals_SMART-goals_tool_2018-11.pdf"><u>Consumer Financial Protection Bureau</u></a>. “Setting SMART goals.” </p></li></ol><p></p>

What happens when you take money out of a CD before the maturity date? Here's everything you need to know, including how CD early withdrawal penalties are calculated, how to avoid these fees, and when incurring them might be a good idea.

<p>If you need to withdraw your funds early (before the maturity date), it generally means paying a <a href="https://www.lendingclub.com/personal-savings/cd">certificate of deposit (CD)</a> early withdrawal penalty fee to the bank or credit union. This is often based on the term and amount of interest earned, but can also be a set amount determined by your financial institution. </p><p>It’s important to understand what happens when you take money out of a CD before the maturity date, including how CD early withdrawal penalties are calculated, and how to avoid these charges. We also cover a few reasons why you might want to consider making an early withdrawal on a CD despite the penalty you would incur.</p><h2>What Is a CD Early Withdrawal Penalty?</h2><p>A CD early withdrawal penalty is the fee charged by your bank or credit union when you withdraw funds from a certificate of deposit account before the term ends. Financial institutions charge a fee for withdrawing CD funds early because when you open a CD you are agreeing to hold a fixed amount of money (principal) in the account for a predetermined length of time (term) in return for an agreed-upon fixed interest rate and yield (APY). The end of the fixed term is known as the maturity date.</br></br>While a CD offers a low-risk way to earn a higher, fixed interest rate on your deposits, it also requires you to leave your money until the end of the term, which can range from a few months to several years. Often, CDs with longer maturity dates earn a higher interest rate (APY). If you wait until the CD maturity date, you can withdraw all or part of your original deposit plus earned interest without penalty.</p><p>Banks and credit unions charge a CD early withdrawal penalty fee to comply with reserve requirements on time deposit accounts such as CDs. The amount of the CD early withdrawal penalty can vary based on the financial institution, CD terms, interest rate, and market conditions. If the penalty is more than your earned interest, you stand to lose some of your principal. </p><p>It’s important to review your account agreement for CD early withdrawal policies specific to your bank and your account.</p><h2>What Types of Penalties Might You Have to Pay if You Withdraw Early?</h2><p>Before investing in a CD, it’s important to carefully review your account agreement and disclosures to understand how the early withdrawal penalty is calculated. Penalties vary by financial institution, and even between CDs offered by the same bank. Here are a few ways an early withdrawal penalty could be assessed.</p><h3>Monetary Penalty</h3><p>You might be charged a percentage of interest based on the original principal or the amount withdrawn. This percentage-based fee may be calculated based on a set number of days, weeks, or months.  </p><p>For instance, depending on your financial institution, you could be charged the equivalent of three months’ interest for an early withdrawal from a CD that matures in six months or less. If you have five year CD, you might pay a penalty of 12 months’ interest or more. Or, your bank could charge a specific dollar amount such as the full amount of interest you’ve earned as of the date of the withdrawal.  </p><p>Typically, CDs with longer maturity dates have higher early withdrawal penalties. </p><h3>Loss of Bonus</h3><p>On CDs offering a cash bonus, you could lose any cash bonus you earned when you opened or reinvested in the CD as penalty for early withdrawal. </p><h2>How Does your Financial Institution Calculate Early CD Withdrawal Penalties?</h2><p>If you’re thinking about making an early withdrawal, knowing how your financial institution will calculate a CD early withdrawal penalty charge can help you make an informed decision. Here are some of the ways they can be calculated:</p><p><b>A. </b>Some financial institutions charge for a certain number of days’ worth of interest calculated on the original CD deposit amount as a penalty for early withdrawals.  </p><blockquote><p>Penalty = Interest Rate ÷ 365 (or 366 in a leap year) × Penalty Days × Original Principal Balance</p></blockquote><p>For example, let’s say your bank charges an early withdrawal fee of 60 days of interest on a 24-month CD with an APY of 4.50% and you’ve deposited $10,000. Here’s how the penalty would be calculated:</p><blockquote><p>Penalty = .045 ÷ 365 x 60 x $10,000</br>Penalty = $73.97</p></blockquote><p><b>B. </b>Some financial institutions calculate the penalty based on the amount of deposit being withdrawn from the account.</p><blockquote><p>Penalty = Interest Rate ÷ 365 (or 366 in a leap year) × Penalty Days × Amount Withdrawn</p></blockquote><p>Let’s say you withdraw $2,000 from the CD described in A above and the penalty is 60 days’ interest on the amount withdrawn. Here’s how the penalty would be calculated:</p><p><b>C.</b> And if your penalty is calculated in months, instead of days, here’s how that would be calculated:</p><blockquote><p>Penalty = Interest Rate ÷ 12 × Penalty Months × Original Principal Amount (or Amount Withdrawn)</p></blockquote><p>Using our example of a 24-month CD with an APY of 4.50% and a $10,000 initial deposit. If the early withdrawal penalty is 3 months’ interest on the original principal, here’s how the penalty would be calculated:</p><blockquote><p>Penalty = .045 ÷ 12 x 3 x $10,000</br>Penalty = $112.50</p></blockquote><h2>When Could an Early Withdrawal Be a Good Idea?</h2><p>While an early withdrawal from a CD account generally results in a penalty fee, there are some circumstances where it may be your better, or only, option. Here are a few situations where you might want, or need, to consider making an early withdrawal on a CD account:</p><ul><li><p><b>You need to cover a large emergency expense.</b> If you were to put an unexpected medical bill on a higher-interest revolving credit card balance, your interest expense on the card could potentially be more costly than incurring the CD early withdrawal penalty and using some or all the funds to help you pay off the medical bill. </p></li><li><p><b>You find a better investment that could earn more yield.</b> If rates have risen sharply since you made your CD deposit and you think taking advantage of a new, different opportunity could outweigh the early withdrawal penalty you would incur by accessing your CD money before maturity, it might be worth considering taking.</p></li><li><p><b>You need extra money to cover a down payment.</b> If putting the money in your CD toward a down payment on a new home could reduce the size of your loan and save you money on the cost of financing, making the early withdrawal might be worth it.</p></li><li><p><b>You forgot to close your CD account before the maturity date</b> and you don’t want to leave your money invested for another term.</p></li><li><p><b>Your accounts or property are garnished.</b> In certain cases, such as when a garnishment or levy has been issued against your income or assets, early withdrawal from your CD may be your only option if you don’t otherwise have the money to satisfy the debt owed.</p></li></ul><h2>How to Avoid CD Early Withdrawal Penalties</h2><p>Giving yourself more flexibility in your CD selection can help you avoid paying early withdrawal penalties, sometimes even if you need to access your money before the CD matures.</p><h3><b>Know when an early withdrawal penalty applies</b>. </h3><p>Carefully read your CD account agreement for information to learn what could trigger an early withdrawal penalty or fee. Even if the bank doesn’t use the word “penalty,” it must explain under what conditions you stand to lose your principal or interest earned if you withdraw your funds before the CD maturity date.</p><h3><b>Know your maturity date</b>. </h3><p>Generally, most banks and credit unions set up CDs so that they automatically renew, or rollover, at the end of the term unless you specifically tell them not to. If you have a CD that automatically rolls over and you forget to withdraw funds in time, the new CD will typically have the same term as the matured CD, however, the interest rate and yield could be lower. When a CD matures and automatically renews into a new CD, typically there is a grace period (between 5 and 15 days) during which time you withdraw your funds and close the CD without an early withdrawal penalty. </p><h3><b>Choose a no-penalty CD</b>. </h3><p>Unlike a traditional CD, a no-penalty CD offers you the flexibility to withdraw your money (including interest earned) starting seven days after you make your initial deposit without paying an early withdrawal penalty. However, typically you can only make an early withdrawal of the full balance, not a partial balance. Also keep in mind, generally, no-penalty CDs offer lower APYs and shorter terms (usually one year). </p><h3><b>Build a CD ladder strategy</b>. </h3><p>A CD ladder strategy involves splitting up your deposit into CDs with different maturity dates, allowing you to take advantage of higher long-term rates without locking up all your funds for longer than you would like. Having multiple CDs with carefully staggered maturity dates enables you make sure your never more than a few months away from being able to access your money without risk of early withdrawal penalty.</p><h3><b>Request a waiver</b>. </h3><p>Some banks may waive early withdrawal penalties in certain situations, such as: </p><ul><li><p>Depositor is declared legally incompetent, becomes disabled, or dies</p></li><li><p>CD is retitled to a new owner without a change in term or interest rate (APY) </p></li><li><p>Withdrawal is required by court order</p></li><li><p>Widespread economic or market crises</p></li></ul><h2>The Bottom Line</h2><p>Certificates of deposit have the potential to help you <a href="/resource-center/personal-savings/what-is-a-high-yield-cd-and-how-does-it-work">reach your savings goals faster</a> compared to regular savings accounts. However, if you need to access your money before the CD maturity date, you may incur an early withdrawal penalty which could mean giving up some of your interest earned or losing some of your principal balance. </p><p>Knowing when a CD early withdrawal penalty applies, staying on top of your maturity date, and choosing flexible CD options such as a CD ladder can all help you to maximize yields while maintaining a certain measure of “liquidity” and avoid a CD early withdrawal penalty should you need the money.</p>

Related Resource Center

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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