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You have the right to request a free yearly copy of your credit report from each of the three major credit bureaus, but you may be able to check your reports more frequently online at no cost. 

<p>You are entitled to one free copy of your credit reports every year from each of the three consumer credit reporting agencies (Equifax, Experian, and TransUnion). You can choose to request all of your reports at once, or order them separately throughout the year.<sup>[1]</sup>  </p><ul><li><p><b>Online: </b>Visit <a href="http://annualcreditreport.com/"><b>AnnualCreditReport.com</b></a> and follow the step-by-step instructions. </p></li><li><p><b>Phone: </b>Call (877) 322-8228 to request your report(s). </p></li><li><p><b>Mail:</b> Send a completed<b> </b><a href="https://www.annualcreditreport.com/manualRequestForm.action"><b>Annual Credit Report Request form</b></a> to: </p></li></ul><p>Annual Credit Report Request Service </br>P.O. Box 105281 </br>Atlanta, GA 30348-5281 </p><h2>How to get additional free credit reports </h2><p>You may also be eligible to request additional free credit reports throughout the year if any of the following situations apply.<sup>[1]</sup>  </p><ul><li><p><b>Online request:</b> Free weekly credit reports are available online at <a href="https://www.annualcreditreport.com/gettingReports.action">AnnualCreditReport.com</a> from Equifax, Experian, and TransUnion.  </p></li><li><p><b>Adverse action:</b> If you were denied credit, insurance, or employment based on the information in your credit report, you’re entitled to request a free copy of the report from the credit reporting agency. Typically, you’ll need to make the request within 60 days after receiving notice. Follow the instructions you receive with your denial.  </p></li><li><p><b>Fraud:</b> If you believe your credit file has inaccuracies because of fraudulent activity, you can get a free copy of your credit report from a nationwide credit reporting company. You’re also eligible for two additional free copies for an extended fraud alert. </p></li><li><p><b>Unemployment:</b> You can get a free credit report if you’re currently unemployed and plan to apply for jobs within 60 days of your request. </p></li><li><p><b>Public assistance:</b> If you receive government-funded assistance, you may be eligible to get a free copy of your credit report.  </p></li><li><p><b>State law:</b> For example, California Credit Reporting Agencies Act (CCRRA). Check your state’s laws for availability.  </p></li></ul><p>You can also pay for additional reports—but by law, the credit reporting agency can’t charge more than $15.50 per report.<sup>[2]</sup>  </p><h2>Start monitoring your credit regularly </h2><p>When you apply for credit, like a <a href="https://www.lendingclub.com/personal-loan"><b>personal loan</b></a>, lenders typically consider the information on your credit reports as well as your credit score. Credit reports show a list of your accounts and your activity on the accounts, like payment history and balances. It also includes details about your applications for new credit, like loans, credit cards, and mortgages. Scoring systems like FICO<sup>®</sup> score and VantageScore use the information in your reports when calculating your credit scores.<sup>[3]</sup>   </p><p>Checking your credit reports and credit scores regularly can help you quickly <a href="https://www.lendingclub.com/resource-center/personal-finance/how-to-read-your-credit-report-identify-red-flags"><b>spot errors</b></a> and potential fraudulent activity. For instance, you may see an account you don’t recognize or a new application for a credit card that you never applied for. Report anything that doesn’t look right to the credit bureau immediately. If you suspect fraud, you can place a fraud alert on your credit report or set up a security freeze in more serious situations.<sup>[4]</sup>  </p><h2>The bottom line </h2><p>Keeping tabs on your credit reports can help you spot errors and potential fraud attempts. If you’re working on improving your credit, staying on top of your credit reports is also a good way to see what may be affecting your scores, like payment history and age of accounts. Remember, checking your own credit doesn’t affect your credit scores, and it’s free to check your report annually.   </p><hr/><ol><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/how-do-i-get-a-free-copy-of-my-credit-reports-en-5/">Consumer Financial Protection Bureau</a>. “How do I get a free copy of my credit reports?” </p></li><li><p><a href="https://www.consumerfinance.gov/rules-policy/final-rules/fair-credit-reporting-act-disclosures/">Consumer Financial Protection Bureau.</a> &quot;Fair Credit Reporting Act Disclosures&quot;</p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-credit-report-and-a-credit-score-en-2069/">Consumer Financial Protection Bureau</a>. “What is the difference between a credit report and a credit score?” </p></li><li><p><a href="https://consumer.ftc.gov/articles/free-credit-reports">Federal Trade Commission Consumer Advice</a>. “Free credit reports.” </p></li></ol><p></p>

The time value of money means money today is worth more than the same amount in the future due to its earning potential. It reflects the benefit of receiving money now versus later.

<p>In short, the time value of money (TVM) is the idea that money is worth more today than the same amount of money in the future, and it’s a core concept in finance.  </p><h2><b>What is the time value of money?</b> </h2><p>The time value of money (TVM) is fairly easy to understand. For example, most people would rather receive $1,000 today than $1,000 three years from now. There are different reasons for the changing value, but three of the main ones are:  </p><ul><li><p>You could use the money now to earn money. If you receive money today, you may be able to make money by saving or investing it. There’s an opportunity cost—the lost potential earnings—if you don’t receive the money until later.  </p></li><li><p>The cost of goods and services increases over time. Inflation can lead to the same amount of money having less purchasing power in the future. It isn’t part of TVM calculations but can still impact the real-world value of your money over time. </p></li><li><p>You might not get the money in the future. Getting the money today removes this uncertainty that you might not be given the $1,000 in the future. </p></li></ul><p>The time value of money can get tricky when the amount offered now versus in the future is different. For example, what if someone offered you $1,000 today or $1,150 three years from now? The TVM formulas can help you determine which might be the better option.  </p><h2><b>How to calculate the time value of money</b> </h2><p>There are a few formulas you can use to determine either the present value of money or the future value of money:  <i>PV = FV / (1+r)n</i> <i>or</i> <i>FV = PV x (1+r)n</i> </p><ul><li><p>PV = Present value of money </p></li><li><p>FV = Future value of money </p></li><li><p>r = interest rate </p></li><li><p>n = number of periods per year  </p></li></ul><p>The FV formula assumes that interest compounds annually. If the interest compounds more frequently, such as monthly or continuous compounding, you can use the following formula to find the future value.  <i>FV = PV x [ 1 + r / n) ] (n x t)</i> </p><ul><li><p>r = annual interest rate </p></li><li><p>n = number of compounding periods each year </p></li><li><p>t = number of years </p></li></ul><p>Don’t worry—there are plenty of <a href="https://www.calculator.net/present-value-calculator.html">present value</a> and <a href="https://www.calculator.net/future-value-calculator.html">future value</a> financial calculators online that you can use.  </p><h3><b>Time value of money formula examples:</b> </h3><p>With the formulas in mind, let’s go back to the question from before—would you rather have $1,000 today or $1,150 three years from now? The answer to this simple example may depend on the interest you can expect to earn if you get the money today. For example, assume that you could earn 4% interest annually—a low but reasonable interest rate—and the interest compounds at the end of each year.  </p><p>We can use the present value formula to find the value of the $1,150 today: </p><ul><li><p>PV = 1,150 / (1+.04)3 = $1,022 </p></li></ul><p>Or, the future value formula to find the value of $1,000 three years in the future:  </p><ul><li><p>FV = 1,000 * (1+.04)3 = $1,125 </p></li></ul><p>It’s close, but receiving the $1,150 lump sum three years from now may be the better choice. Of course, a different rate of return or time period could impact the outcomes. Keep in mind, the result doesn’t account for inflation and the risk that you won’t receive the money at all. We’re also putting aside the risk that you might not be able to earn the full 4% each year.  </p><h2><b>Examples of the time value of money and loans</b> </h2><p>TVM calculations can be an important part of making investment decisions. Professional investors and advisors may use the concepts and formulas to compare deals, annuities, and other investment opportunities. Although more complex calculations also come into play, such as finding the net present value (NPV) of future cash flows.  Individuals might want to use financial calculators or the TVM formulas to compare investments or choose between paying down debt and investing. The concept could also be helpful if you’re borrowing money or considering how to pay off debt.  For example, you might have $15,000 in credit card debt with an average 20% APR. You know you may be able to use a <a href="https://www.lendingclub.com/personal-loan/debt-consolidation">debt consolidation loan</a> to save money by lowering your interest rate, but you’re not sure which loan offer to choose: </p><ul><li><p>Loan A is for $15,000, and it has a 14% APR and a three-year term. It has a $513 monthly payment and you’ll repay $18,456 overall.  </p></li><li><p>Loan B is for $15,000, but it has a 16% interest rate and a five-year term. It has a $365 monthly payment, and you’ll repay $21,886 overall. </p></li></ul><p>Loan A costs $148 more each month for three years. Once the loan is paid off, you’ll pay $365 less each month during years four and five, since you’re no longer making payments. Additionally, while Loan B has a lower monthly payment, it costs $3,432 more overall. Keep in mind that these examples do not take into account origination fees or prepayment penalties.  </p><h2><b>Why is it important to understand the time value of money?</b> </h2><p>When you’re faced with a specific financial decision, such as which loan offer to accept, the TVM calculation on its own might not give you the answer.  </p><p>For example, regardless of how much the TVM calculations say a sum is worth today versus after a period of time, you might want a loan with a low monthly payment because you know your rent is about to increase. Or, you might be okay with a high monthly payment because you know it will lead to paying off the loan sooner and paying less interest overall.  </p><p>However, it can still be helpful to think about how access to cash is valuable, and how the money you have today could be worth more than the money you might have in the future.  </p><h2><b>The bottom line</b> </h2><p>The time value of money is the idea that money is worth more today than it will be worth in the future. You can use several TVM formulas to determine the current value of money from the future, or the future value of money today.  TVM equations and outputs can be an important piece of comparing investment opportunities. Additionally, it can be helpful to consider the concept when you’re making other financial decisions, such as whether to consolidate debt.  </p><h2><b>Time value of money FAQs</b> </h2><h3><b>How does time value of money affect personal loans?</b> </h3><p>The TVM doesn’t directly affect your <a href="https://www.lendingclub.com/personal-loan">personal loan</a>, but it can be a factor in deciding between different loan options. Consider whether you’d like to have more money today or pay off the loan sooner and save on interest.   </p><h3><b>How can lenders help you benefit from the time value of money?</b> </h3><p>Money that you have access to today may be worth more than the money you have in the future, and lenders can give you access to more money. However, you’ll need to compare how much you pay for financing to how much you can earn from saving or investing your cash.  </p><h3><b>How does the time value of money apply to car loans?</b> </h3><p>When taking out a car loan, consider the TVM and whether it makes sense to finance none, part, or all of the purchase. For instance, even if you have the money available, it might make sense to finance the purchase with a 0% APR offer and save or invest the money you have on hand.  </p>

Getting approved for a personal loan usually takes a few days depending on the lender, your credit score, and how quickly you submit required documents. 

<p>Most <a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-a-personal-loan-how-to-apply-in-3-simple-steps"><b>personal loans</b></a> take a few business days to be approved. However, turnaround times depend on many factors, including the lender’s approval process, how quickly you submit your documentation, and where the funds are deposited.  </p><h2>How long does it take for a personal loan to be approved?  </h2><p>In general, after you’ve chosen a lender, you’ll need to apply, submit documentation, wait for approval, and receive funds. The process takes time and usually ranges from a few days to  a couple of weeks. Here’s what you need to know about how long the <a href="https://www.lendingclub.com/resource-center/personal-loan/what-is-a-personal-loan-how-to-apply-in-3-simple-steps"><b>loan approval process</b></a> takes.   </p><ul><li><p><b>Loan application: </b>The application process usually only takes a few minutes—especially if you apply online.  </p></li><li><p><b>Loan approval: </b>Lenders that allow prequalification usually let you know your rates in just minutes. If you move forward, it takes about a day or two to verify your information. Loan approval with lenders that don’t offer prequalification usually takes a few days longer. </p></li><li><p><b>Loan funding: </b>Some lenders offer same-day or next-day funding, but most loans take a few business days to fund. Choose direct deposit for the quickest funding. </p></li></ul><h2>What could affect a loan’s approval time? </h2><p>Personal loan turnaround times from application to approval vary widely by lenders. Online lenders tend to have a quicker loan approval timeline than traditional banks and credit unions. However, several other factors also can affect how fast your loan gets approved.   </p><ul><li><p><b>Underwriting process:</b> Automated underwriting uses software to quickly compare your credit and application information to the lender’s underwriting standards. This type of underwriting is used commonly by online lenders. Manual underwriting, often used by banks, takes much longer.  </p></li><li><p><b>Document submission:</b> Both traditional and online lenders require you to submit documentation, like recent paystubs or your driver’s license, as part of the application process. How fast you get the requested information to the lender affects the speed of your loan approval—especially during manual underwriting. Incomplete submissions can also cause delays.   </p></li><li><p><b>Accuracy of information:</b> Lenders need to verify your identity and the information you provide in your application along with any support documents, like tax returns. If inaccuracies are found or key information like your employment or credit score changes, this could slow down your loan’s approval time.  </p></li></ul><h2>Ways to speed up the loan approval process </h2><p>You may not be able to get funds immediately with a personal loan, but you can help streamline the loan approval process. Consider these strategies to speed up time from application to funding. </p><h3>Check your rates </h3><p>Many lenders provide an option for prequalification without affecting your credit score. For instance, LendingClub Bank only uses a soft credit pull when you <a href="https://www.lendingclub.com/personal-loan"><b>check your rate</b></a>. Checking rates can help you compare loan offers from different lenders and narrow down where you want to apply—saving you time and a ding to your credit.   </p><p>Once you’ve found the right loan for your financial situation, you’ll need to formally apply. However, since you’ve been prequalified, the approval process often goes quickly, thanks to automatic underwriting, and you can usually get funded in just a day or so.  </p><h3>Organize your documents </h3><p>Lenders often request documents during the loan application process to verify your identity, income, and address. Gathering these verification documents ahead of time can help speed up the lender’s review process.  </p><p> When applying for loans, be sure to have the following documents ready to show the lender.   </p><ul><li><p>A government-issued ID, like a driver’s license or passport </p></li><li><p>Proof of address, like a lease or utility bill </p></li><li><p>Proof of income, like a recent pay stub, bank statement, or tax documents </p></li></ul><p>Make sure all information is accurate and up-to-date. Keep in mind that your <a href="https://www.lendingclub.com/resource-center/personal-loan/apr-vs-interest-rate-whats-the-difference"><b>interest rate</b></a> and loan terms may change after prequalification if there’s been any updates to your credit score or financial situation. For instance, if your credit score has dropped since you first checked your rate, your final interest rate may go up. Be sure to check the fine print before signing your loan offer.<sup>[1]</sup> </p><h3>Use an online lender </h3><p>You can apply for a personal loan from many different types of lenders, like banks, credit unions, online lenders, or loan marketplaces. Using a loan marketplace or an online lender, such as LendingClub Bank, can be the fastest way to get a loan. Plus, you can apply using your mobile phone, tablet, or computer—meaning you won’t need to make a special trip to a bank or credit union.   </p><p>Prequalification with an online lender typically only takes a few minutes. After you check your rate and accept the offer, your personal and financial details are verified quickly—usually with automatic underwriting. This can help speed up how fast your loan is approved and funded.  </p><h3>Apply with a reputable lender </h3><p>While getting a loan fast may be your top priority, it’s important to learn a bit more about the financial institution you’re borrowing from before you apply. Use caution when considering loans advertised as “quick loans,” like payday loans or auto title loans. You may be able to get the loan the same day, but these loans often have much higher-than-average interest rates, come with low borrowing limits, and usually need to be paid back in a short time period—sometimes as soon as your next paycheck.<sup>[2]</sup>  </p><p>Review sites, like the Better Business Bureau and Trustpilot, can help you learn what real customers think about the lender.   </p><p>Look for a lender that has high rating scores and customer reviews that talk about quality customer service, reasonable rates and terms, and fair repayment options. Watch out for lenders that seem predatory, hard to communicate with, or have very high interest rates.<sup>[2]</sup> </p><h2>The bottom line </h2><p>A personal loan can help you pay for a big expense or consolidate high-interest credit cards.<sup>[1]</sup> This type of loan usually takes a few days to approve, but you can help ensure there are no delays by getting prequalified, having your paperwork in order, and working with a reputable lender.  </p><p>If you need a small amount of cash fast, try to avoid loans that promise same-day funding.<sup>[2]</sup> Instead, consider using a credit card or ask a family member or friend for help.  </p><hr/><ol><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-personal-installment-loan-en-2114/">Consumer Financial Protection Bureau</a>. “What is a personal installment loan?”  </p></li><li><p><a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-payday-loan-en-1567/">Consumer Financial Protection Bureau</a>. “What is a payday loan?”  </p></li></ol><p></p>

When choosing between a loan or line of credit for financing your personal or business needs, both have their pros and cons. And there are even situations where you might want both. 

<p>When choosing between a personal loan or line of credit for financing your personal or business needs, both have their pros and cons. There are even situations where you might want both. </p><p>Understanding how each works and how they can help you determine what’s best for you. </p><h2><b>What is a line of credit?</b> </h2><p>A line of credit is a flexible account that gives you the option to borrow money quickly when you need it. Similar to a credit card, a line of credit has a maximum credit limit. You can take out loans (called draws) against your credit line, and you only pay interest on the amount you borrow. </p><h2><b>What is a personal loan?</b> </h2><p>Personal loans can be secured or unsecured installment loans. With a personal loan, you’ll receive the entire monetary amount upfront, and then repay it plus interest in regular installments over its repayment term. </p><h2><b>Line of credit vs. personal loan</b> </h2><p>Both can be useful financial tools, but one might be a better fit than the other, depending on your circumstances. </p><table><tr><td><p> </p></td><td><p><b>Line of Credit</b> </p></td><td><p><b>Personal Loan</b> </p></td></tr><tr><td><p><b>Loan amounts </b></p></td><td><p>Typically ranges from $1,000 - $100,000 </p></td><td><p>Typically ranges from $1,000 - $100,000 </p></td></tr><tr><td><p><b>Interest rates </b></p></td><td><p>Varies </p></td><td><p>Fixed </p></td></tr><tr><td><p><b>Common uses </b></p></td><td><p>For longer-term projects, or as a safety net </p></td><td><p>For one-time major expenses, or debt consolidation </p></td></tr><tr><td><p><b>Revolving account </b></p></td><td><p>Often </p></td><td><p>No </p></td></tr><tr><td><p><b>Fees</b> </p></td><td><p>Yes </p></td><td><p>Varies </p></td></tr></table><h3><b>Personal lines of credit:</b> </h3><p>With a personal line of credit, you can get approved once and make multiple draws as you need the money. You’ll only pay interest on what you borrow, which can make a line of credit a more flexible and inexpensive option if you aren’t going to be tapping into the money (or need a large amount) right away.  </p><p>Many personal lines of credit are also revolving credit accounts, meaning your available credit frees up as you make payments. A credit card is an example of a revolving credit account: the card has a limit on what you can borrow, and you can continuously borrow and pay off that debt. Like a credit card, lines of credit often have variable interest rates, which means your rate and payment might fluctuate over time. </p><h3><b>Personal loans:</b> </h3><p>A <a href="https://www.lendingclub.com/personal-loan">personal loan</a> can be a better fit if you need to cover a big expense and would prefer a fixed interest rate over the term of your loan. Unlike lines of credit that may have a variable interest rate. As a result, it’s easy to determine your total costs upfront and plan your budget accordingly.  </p><p>However, if you want to borrow more money later on, you’ll have to reapply for another loan. Reapplying can often be easier the second time, especially if you’re doing it with the same lender who already knows you and if your income and credit profiles have remained stable. </p><h2><b>When to consider using a personal loan</b> </h2><p>An unsecured loan can be a good fit when covering major expenses such as: </p><ul><li><p>Unexpected medical bills </p></li><li><p>Emergency expenses </p></li><li><p>Home repairs </p></li><li><p>Home improvements </p></li><li><p>Funeral costs </p></li></ul><p>You can often apply and get the funds within a few days, and many lenders will transfer the funds directly to your bank account. You can then use the money for almost anything. </br> </br>A personal loan can also be a good option when you’re paying down high-rate debt, including credit card debt. Taking out a low-rate loan to <a href="https://www.lendingclub.com/personal-loan/credit-card-consolidation-loan">consolidate your credit card bills</a> can help you save money on interest and may lower your monthly payment. Reducing your debt can also increase your credit score.<sup>[1]</sup> </p><h2><b>When to consider using a line of credit</b> </h2><p>A line of credit may be a better fit if you have an ongoing project and don’t want to start accruing interest on the entire loan amount right away. </p><h3><b>Line of credit use example:</b> </h3><p>You can use a line of credit for a project that requires payments every few months or if the total cost is unclear. Having a line of credit to tap during emergencies can also be beneficial, although you may have to pay fees to keep it open, even if you’re not using it.  In some cases, using a secured line of credit—like a home equity line of credit (HELOC)—could be a good option, particularly if you’re using the money to improve your home. However, a HELOC typically requires you to have equity in your home and pay closing costs, whereas a personal line of credit does not. </p><h3><b>Line of credit or loan qualification requirements</b> </h3><p>Qualifying for a line of credit or loan varies depending on the specific type of financing and the lender. You’ll generally need to meet the basic eligibility requirements, like being at least 18 years old and living in a state where the lender operates. Additional requirements can include: </p><h3><b>Requirements for qualifying for a line of credit</b> </h3><ul><li><p>Good-to-excellent credit </p></li><li><p>A steady income </p></li><li><p>Collateral for secured lines of credit </p></li></ul><p><b>Requirements for qualifying for a loan</b> </p><ul><li><p>Fair-to-good credit </p></li><li><p>A steady income </p></li><li><p>Collateral for secured loans</p></li></ul><h2><b>How to apply</b> </h2><p>The application process will vary by the financial institution and whether you’re looking for a line of credit versus a personal loan. You may be able to check your rate and loan offers with a soft credit check, which won’t hurt your credit scores. </p><h3><b>How to apply for a line of credit</b> </h3><p>Compare options from several lenders to identify the best fit. You’ll want to review the potential credit limit, annual or monthly fees, and any required initial draw amounts when making your decision. Then, submit applications to compare your loan offers. </p><h3><b>How to apply for a personal loan</b> </h3><p>When deciding, consider your APR—the total, annual cost of borrowing, including interest and any other fees you may be required to pay. You should also consider maximum loan amounts, potential repayment periods, and whether or not the lender charges prepayment penalties or application fees. Keep in mind a longer repayment period can lead to lower minimum monthly payments, but a shorter term can lead to lower interest rates. Check your rate with several lenders to see which offer works best for you. </p><h2><b>The bottom line</b> </h2><p>A line of credit and personal loan both have their benefits and drawbacks, depending on your situation. If you need ongoing financing or a safety net, a line of credit might be your best option. If you know the exact amount of money you need and want a fixed repayment schedule, a personal loan could help set you up for greater financial success. In either case, doing research and checking your rate before applying can help you get the best offers. </p><h2><b>FAQ</b> </h2><p>If you’ve just started exploring personal loans, you probably have a ton of questions. Here are some of the most common. </p><h3><b>Is it better to get a personal loan or line of credit?</b></h3><p> It depends on what you need. A line of credit can offer flexibility and let you take multiple draws without applying for a new account, which is convenient if you don’t know how much money you’ll need. But a loan may offer a lower interest rate, and the fixed monthly payments can make it easier to budget for and repay. That being said, if you need ongoing funds, a line of credit could be your best option. But if you know how you plan on using the money, a personal loan could offer better interest rates and a simpler repayment schedule. </p><h3><b>Is it bad to get a line of credit?</b> </h3><p>Opening a line of credit isn’t bad, but review the account’s terms carefully to make sure they align with your financial needs. For example, some lines of credit will charge you a monthly or annual fee, even if you don’t use the credit line, and could potentially negatively impact your your debt-to-income ratio and credit score. </p><h3><b>What is the benefit of a line of credit?</b> </h3><p>A line of credit can offer flexibility as you’ll be able to borrow up to your account’s credit limit, but you aren’t required to borrow more than you need. You also only pay interest on the amount you borrow. </p><h3><b>Do I need good credit to get a loan or line of credit?</b> </h3><p>Some lenders offer personal loans and lines of credit to borrowers with poor credit, but there may be high interest rates and fees. </p><hr/><p> </br><i>1. Reducing debt and maintaining low credit balances may contribute to an improvement in your credit score, but results are not guaranteed. Individual results vary based on multiple factors, including but not limited to payment history and credit utilization.</i></p>

An installment loan is a fixed-amount loan repaid over time through regular, scheduled payments, which include both principal and interest, until the loan is fully paid off. 

<p>Installment loans are some of the most common types of loans for almost any financial need, and most Americans get one at some point in their lives. Some examples include auto loans, personal loans, mortgages, and student loans.  </p><p>Understanding installment loans, how they’re paid, and what personal factors influence your rate will help you navigate the borrowing process efficiently and effectively. </p><h2><b>What is an installment loan?</b> </h2><p>An installment loan is a type of loan taken out for a fixed amount and repaid over a predetermined schedule over a set period of time––the “installments.” Payments are typically monthly but can also be weekly or quarterly, depending on the loan. </br> </br>One of the main benefits of installment loans is that most are fixed-rate agreements, meaning the payments remain the same. This can help significantly when creating and sticking to a budget. However, once you&#39;ve borrowed the principal amount, you must make payments on a specified schedule. You cannot borrow additional money on that loan as you can with a credit card or another revolving line of credit. If you anticipate needing ongoing funds, this can be a drawback. </p><h2><b>Examples of installment loans</b> </h2><p>There are many different types of installment loans depending on what you need to finance. </p><h3><b>Auto loans</b> </h3><p>Auto loans are often listed according to how long the loan will take to pay off. For instance, you may hear of 24-month or 36-month car loans. In those cases, the price must be paid in full by the end of the loan agreement. </br> </br>Traditionally, auto loans were offered at the dealership, but increasingly, individuals are choosing to get auto loans online, at their bank, or through another third-party financial institution. </p><h3><b>Home mortgages</b> </h3><p>Mortgages are installment loans that virtually every homeowner takes out at some point. These home loans require a down payment—anywhere from 3 to 20 percent of the home’s value—with the remainder paid off monthly for the set time period of the loan. Mortgages typically range from 10 to 30 years and can be either fixed or adjustable-rate loans—which refers to whether the interest rate stays the same or changes during the course of the repayment period. </p><h3><b>Personal loans</b> </h3><p>Unlike mortgages and auto loans, <a href="https://www.lendingclub.com/personal-loan">personal loans</a> aren’t tied to one specified purpose. It&#39;s kind of like borrowing cash from a friend but on a much larger scale. While personal installment loans still involve borrowing a fixed amount and paying it off for within a set period of time, the loan itself can be used for a number of purposes. </br> </br>For example, if you have an expensive wedding and honeymoon and find yourself low on funds, applying for a personal loan would allow you to spread the cost over several months or years. Other uses for personal loans include medical bills, home repairs and upgrades, or a large unexpected expense.  </p><p>Many personal loans are unsecured, meaning they don’t have assets backing them. Therefore, lenders consider them riskier and can charge higher interest rates than mortgages or home equity lines of credit. </p><h3><b>Student loans</b> </h3><p>Student loans are used to pay for higher education, and their payment schedule starts 6 to 12 months after graduation. These loans can take a couple of years or decades to pay off, depending on what institution issued the loan, how much was borrowed, and how much it cost. Generally, student loans carry interest rates of 3 to 14 percent but can be refinanced at lower rates after the borrower becomes employed. Student loans can be either federal—meaning they’re provided by the government—or private through an online lender or bank. </p><h2><b>Important features of an installment loan</b> </h2><p>Understanding the terms of your installment loan offers will ensure you get the right type of loan for your situation. </p><h3><b>Loan amount</b> </h3><p>The first thing to consider when applying for a loan is how much money you need to borrow. Installment loans are fairly large, so they are paid off over long periods of time. This is especially true if they are tied to a collateral asset such as a car or house via an auto loan or mortgage. Unlike a line of credit, the amount you borrow for an installment loan is fixed, so you’ll want to make sure you borrow enough for your needs. </p><h3><b>Interest rate</b> </h3><p>Interest is, in essence, the cost of your loan. The higher your interest rate, the more money you’ll owe for each dollar borrowed. Keep in mind, the advertised interest rate and annual percentage rates (APR) <a href="https://www.lendingclub.com/resource-center/personal-loan/apr-vs-interest-rate-whats-the-difference">are different</a>. APR measures the total cost of your loan including fees and interest, as opposed to just the interest. So when you’re deciding between loans, compare the total APR. </p><h3><b>Repayment period</b> </h3><p>Generally, the faster you pay off a loan, the less you’ll pay in interest. However, the shorter the repayment period, the larger your monthly installments will be, as you’re paying off the same amount in less time. Be careful to note loan terms, as many installment loans have prepayment penalties if you pay the loan off too early. When considering options, choose the shortest repayment period that you can manage without stress. </p><h3><b>Secured versus unsecured</b> </h3><p>A “secured” or “unsecured” loan type refers to whether a loan is backed by collateral. Securing a loan by tying it to an asset makes it less risky for the lender and allows you to borrow more money, generally with lower interest rates. However, this also means your asset could be seized if you fail to repay on time. </p><h3><b>Fixed versus variable</b> </h3><p>A fixed rate is one that does not change after you start repaying. With a variable rate (or adjustable rate) the interest charged on the outstanding balance fluctuates based on predetermined factors. Though most installment loans are fixed, it’s common to see variable rates with higher-priced amounts, like mortgages. Be careful when evaluating variable interest loans—though they’ll often start with lower interest rates, they can change without reminder or warning to much higher rates after a certain time period has expired. </p><h3><b>Credit score</b> </h3><p>Credit scores and credit history are <a href="https://www.lendingclub.com/resource-center/personal-loan/understanding-the-5-cs-of-credit">key factors</a> lenders use in determining the interest rate you will receive on a loan. Though there are installment loan options for individuals with bad credit, you’ll want to check your credit report to make sure your score is accurate before signing up for a loan. </p><h3><b>Installment loan vs revolving credit</b> </h3><p>In addition to installment loans, revolving credit is one of the most common ways to borrow large sums of money. With revolving credit, your borrowing capacity is flexible, meaning you can continuously use and repay funds as needed. The best example of this is a credit card or a home equity line of credit. </br> </br>Both loan types have their advantages. <a href="https://www.lendingclub.com/glossary/r/revolving-credit">Revolving credit lines allow</a> for flexibility for how and when they can be paid off, while installment loans allow you to borrow more money and have a longer period of time to pay back the principal. Keep in mind revolving credit can often carry higher interest rates than installment loans. </p><h2><b>The bottom line</b> </h2><p>If you’re considering borrowing money, always consider first how much you need and how long you need it. If you know exactly how much and feel confident in being able to pay back a fixed monthly payment, then installment loans could be an option for you. To find the best installment loans, shop around with multiple lenders, and make sure to consider customer service, reviews, and ease of repayment before committing. </br> </br>LendingClub’s application takes only a few minutes, and you can check your rate for free without impacting your credit score. </p><h2><b>FAQs</b> </h2><p>Still have questions? Some of these commonly asked questions may provide the answer. </p><h3><b>How much can I receive in an installment loan?</b> </h3><p>If you’re buying a house, you can get anywhere from 70 to 95 percent of the home value in a mortgage. For personal loans, you’ll likely receive less money, especially if the loan isn’t backed by an asset. It also helps to consider how much you can pay in monthly payments and how that compares to the amounts offered to you. </p><h3><b>Can I refinance my installment loans?</b> </h3><p>If your income or creditworthiness has improved since opening your installment loan, you may be able to save money by taking out a new loan with a better rate, and then paying off the former loan with the new funds. This is especially true for student loans or debt with a high interest rate. At LendingClub, for example, over 5 million members have used a personal loan to pay down their high-interest debt. The best way to tell if you’re eligible for a new personal loan is to check your rate and see your loan options. </p><h3><b>Is it better to borrow $5,000 through a credit card or personal installment loan?</b> </h3><p>It depends on your desired flexibility for funds, the offered interest rates, and how quickly you can repay what’s been borrowed. Credit cards generally carry higher interest rates than installment loans; however, they also have no fixed payment schedule and some months can have more or less money due depending on how much you’ve spent. This makes them attractive if you need small, ongoing purchasing power, or can repay the funds quickly. An installment loan might make sense for larger, defined amounts or if you need more time for repayment. </p>

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

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

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

<p>Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals. However, recent <a href="https://www.fdic.gov/analysis/household-survey/">FDIC research</a> shows approximately 7.1 million Americans are “unbanked,” meaning they do not have a basic checking or <a href="/personal-savings">savings account</a>.</p><h2>Being Unbanked Increases Costs for Families</h2><p>Reasons for being unbanked (and underbanked) vary from not having enough money to meet a minimum balance and high or unpredictable fees, to having a history of credit, ID, or banking problems, and/or a general distrust of financial institutions.As a result, this drives unbanked individuals to expensive, alternative financial outlets—such as check cashers, payday lenders, and pawn shops that charge high fees for financial products and services—to manage their money. </p><p>Such fringe financial “solutions” hold people back from making meaningful financial progress, many of whom are living on low incomes and, likely, already struggling to make ends meet. Without a <a href="/personal-checking/rewards-checking">checking account</a>, these families wind up overpaying for basic financial transactions, making it difficult for them to build savings and assets over time.</p><h2>More Rewarding Banking for More People</h2><p>In light of this, we’re proud to share that recent improvements to LendingClub Bank’s <a href="/personal-checking/rewards-checking">award-winning Rewards Checking</a> has earned us official certification by the national Cities for Financial Empowerment Fund as meeting the BankOn National Standards for trust and affordability for consumer transactional accounts.Key features of our award-winning Rewards Checking account include:</p><h3>Low Minimum Opening Balance</h3><ul><li><p>Access Rewards Checking with an opening deposit of only $25</p></li><li><p>Freedom from Fees Save more of your hard-earned money with no overdraft, monthly maintenance, and incoming wire transfer fees<sup>1</sup></p></li></ul><h3>Unlimited Cash Back</h3><ul><li><p>Earn <a href="/personal-checking/rewards-checking">unlimited 1% cash back</a> on Qualified (signature-based) Purchases when using your Rewards Checking debit card<sup>2</sup></p></li></ul><h3>Free ATM Access</h3><ul><li><p>Enjoy <a href="/help/checking-accounts-faq/how-do-i-earn-atm-rebates-on-my-checking">ATM access with no LendingClub ATM fees</a>, plus get unlimited ATM fee rebates on fees charged by other banks<sup>3</sup></p></li></ul><h3>Get Your Paycheck Early</h3><ul><li><p>Set up direct deposit into your account and you could be eligible to receive your money up to 2 days earlier<sup>4</sup></p></li></ul><h3>Earn Interest</h3><ul><li><p>Earn an APY that’s more than the national average with account balances of at least $2,500<sup>5</sup></p></li></ul><h3>FDIC Insurance</h3><ul><li><p>Rest easy knowing your deposits are FDIC-insured up to the maximum amount allowed—$250,000 per depositor for each ownership category</p></li></ul><h3>Best Online Experience</h3><ul><li><p>Based on our easy-to-use mobile app and award-winning <a href="/personal-checking/rewards-checking">online checking account</a>, NerdWallet named us <i>Best Bank or Credit Union for Online Experience</i></p></li></ul><h2>What Our Members Say</h2><p>It’s important knowing we’re offering products and services that are helping to improve the financial lives and stability of all Americans, including unbanked and underbanked individuals and families, in every community across the United States.Here’s what some of our members have to say about their Rewards Checking experience with LendingCLub Bank:<i>“I never knew how much money I was losing with my old bank whenever I used an ATM. [LendingClub Bank] reimburses fees from ATM’s and now I look forward to getting the cash back every month.”</i></p><p><b>Robin</b>, a LendingClub Bank Member<i>“The rewards checking account with cash back every month has helped me ditch my credit card and debt.”</i></p><p><b>Lauren</b>, a LendingClub Bank Member</p><p>Read more member reviews.</p><h2>Your Financial Well-Being Matters to Us</h2><p>At LendingClub Bank, making <a href="/personal-checking/rewards-checking">checking accounts</a> more rewarding for more people is an example of our belief that financial well-being should be attainable for everyone—not just for those who can afford it. Everything we do is centered around empowering our members to meet their personal financial goals by enabling access to a broad range of financial  products, services, and educational resources, all designed to help them pay less when borrowing and earn more when saving. </p><p><i>Testimonials reflect the real-life experiences of individuals who used our products; however, individual results may vary.</i></p><p><i></i></p><hr/><h4><i>Terms and Conditions</i></h4><p><i>Accounts subject to approval. $25 minimum opening deposit required. See Product Terms &amp; Conditions for additional details.</i></p><p><i>1. Miscellaneous fees may apply. View Product Terms &amp; Conditions for complete details.</i></p><p><i>2. The Debit Card Rewards Program (“Cash Back Rewards”) provides 1.00% </br>cash-back on all Qualified Purchases using a debit card tied to an Eligible Account.</i></p><p><i>Eligible Accounts are: Rewards Checking accounts that meet the following requirements for the calendar month in review:</i></p><p><i>1). Maintain an average monthly balance of at least $2,500.00; or 2). Receives at least $2,500.00 in Qualifying Direct Deposits.</i></p><p><i>Qualifying Direct Deposits are defined as: Recurring Automated Clearing House (ACH) credits, including payroll, pension or government payments (such as Social Security) made by your employer, or an outside agency. We may require documentation to verify that credits are Qualifying Direct Deposits. Qualifying Direct Deposits do not include peer to peer payments or ACH transfers (funds transfers) from your external accounts.</i></p><p><i>Qualified Purchases are defined as: Signature-based purchases made using the debit card </br>tied to an Eligible Account. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and is based on how the transaction is transmitted at the time of processing. Qualified Purchases do not include: (1) any goods or services purchased that are returned or otherwise credited to your Eligible Account; (2) unlawful purchases; or (3) purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Checks, gift cards, cryptocurrency, casino chips, peer to peer payments, prepaid debit cards, account openings, loan payments, or other cash equivalents).</br> </br>We may report the value of Cash Back Rewards to the IRS as required by law. Any client whose tax status would require us to impose tax withholding of any sort will not be eligible for Cash Back Rewards.</br> </br>Accounts are reviewed after the end of each month. Any earned Cash Back Rewards will be credited to your account on or before the 10th calendar day of the next calendar month. The Eligible Account must be open and active at the time the Cash Back Reward is credited.</i></p><p><i>3. LendingClub does not charge a fee for using another bank’s ATM. Plus, get unlimited automatic ATM surcharge rebates for ATM fees other banks charge you. ATM surcharge rebates apply to cash withdrawals from a Rewards Checking account. ATM fees will be rebated at the end of each statement cycle. Excludes international exchange fees. LendingClub makes its best effort to identify those ATM fees eligible for rebate. In the event that you have not received a rebate for a fee you believe is eligible, please contact Customer Service at 800.242.0272. LendingClub reserves the right to modify or discontinue the ATM surcharge rebate program at any time. Out-of-network ATM fees cost $2.50 on average — source: CNBC as of 01/26/2022. If someone were to use an out-of-network ATM 6 times per month at an average fee of $2.50 per withdrawal, they would spend $180 in ATM fees in 12 months.</i></p><p><i>4. Any account features that enable you to receive direct deposits, or that enable direct deposit funds to be made available to you early, are contingent upon and subject to the payor’s support of such features. </i></p><p><i>5. Annual Percentage Yield (APY) accurate as of 8/1/2022. Rate tiers are as follows: 0.00% APY applies to balances of $0.00–$2,499.99, 0.10% APY applies to the entire balance on balances of $2,500.00–$99,999.99, and 0.15% APY applies to the entire balance of $100,000.00 or more. Rates are variable and are subject to change, at the discretion of the bank and without notice, at any time after an account is opened. Fees may reduce earnings.</i></p>

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

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

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

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

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

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

Related Impact

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

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

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

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

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

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

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

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

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

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

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