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Axos Bank Reviews: Checking, Savings, CD, Money Market and IRA Accounts

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Year Established2000
Total Assets$9.8B

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Axos Bank, formerly BofI Federal Bank, is a digital financial institution with headquarters in San Diego. It was founded in 2000 to supply customers with an innovative online platform that could be accessed anytime from anywhere.

The company offers savings and checking accounts, certificates of deposit (CDs), money market accounts and individual retirement accounts (IRAs). These will be highlighted in this review, though the bank also offers other products such as auto loan refinancing, personal loans and mortgages.

Axos Bank’s Most Popular Accounts

APY

Account Type

Account Name

1.25%

Checking

Axos Bank Rewards Checking - 3 Qualifications

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Axos Bank’s checking account options

Rewards Checking

This account gives you the potential to earn decent interest, but you’ll have to meet several conditions to get the full APY.
APYRequirements to Earn APY
0.42%

Meet one of the following conditions:

  • $1,000 or more in direct deposits per month

  • 10 transactions per month with a debit card ($3 minimum for each)

  • Use debit card an additional five times ($3 minimum for each)

0.83%

Meet two of the above conditions

1.25%

Meet each of the above conditions

  • Minimum opening deposit: $50
  • Monthly account maintenance fee: None
  • ATM fee: None
  • ATM fee refund: Unlimited
  • Overdraft fee: None

The Rewards Checking account is good for those who use their debit card often on purchases since the more it’s used, the more interest that can be earned. But it’s also geared toward those customers who make several sizeable direct deposits on a monthly basis, as that is another condition that needs to be met to receive the highest interest rate.

When you open an account, you will need to deposit a minimum of $50, but you don’t need to worry about getting charged a fee for not holding a minimum amount on a monthly basis. This checking account gives you the potential to earn a relatively high interest rate, but you’ll have to meet three requirements to earn the maximum. And the rates are variable, so they can fluctuate.

How to get Axos Bank’s Rewards Checking account

You can apply online for the Rewards Checking account. You will need to create an account and provide some basic information, such as your name and Social Security number. Within a few minutes, you will be informed about whether you have been approved.

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Essential Checking

This account does not offer interest but has some added perks when it comes to fees and reimbursements.
  • Minimum opening deposit: None
  • Monthly account maintenance fee: None
  • ATM fee: None
  • ATM fee refund: Unlimited
  • Overdraft fee: None

This checking account does not earn interest but can be a good option for those looking for a basic checking account with funds that can be accessed when needed.

There are no fees associated with the Essential Checking account. Customers also do not need to worry about holding a minimum monthly balance to keep the account open.

How to get Axos Bank’s Essential Checking account

Customers can apply online and get a decision within minutes. You will need to create an account by choosing a username and password. Once that is complete, you will be able to apply for the Essential Checking account by providing some basic information, including your Social Security number and valid identification.

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CashBack Checking

You have the potential to earn cash back with this account, but you’ll need to keep a minimum balance.
Cash BackMinimum Balance to Earn Cash Back
1.00% cash back$1,500
0.50% cash backLess than $1,500
  • Minimum opening deposit: $50
  • Monthly account maintenance fee: None
  • ATM fee: None
  • ATM fee refund: Unlimited
  • Overdraft fee: Website doesn’t specify overdraft fee amounts but states Axos Bank can close your account

Axos Bank’s CashBack Checking account may be a good choice for shoppers who frequently use a debit card and want to get rewarded for their spending.

Customers need to maintain a minimum balance if they want to earn the most cash back. If your balance falls below $1,500, you’ll only earn 0.50% cash back.

This interest-bearing account comes with the bonus of unlimited check-writing ability. You can receive starter checks for free, but only when ordered upon opening your account.

Note that you can only earn up to $2,000 in cash back each month. If you can responsibly manage a credit card and pay off the balance in full each month, you may be better off with a cashback rewards credit card that earns a higher rate.

How to get Axos Bank’s CashBack Checking account

Apply for the CashBack Checking account online by providing your name and Social Security number. If you are a new applicant, you will need to create an account to start your online application. The entire process, including receiving a decision, should only take about 15 minutes.

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Golden Checking

High interest rates, zero fees and other perks help sweeten the deal for customers 55 and up.
APYMinimum Balance to Earn APY
0.20% Variable$0.01
  • Minimum opening deposit: $50
  • Monthly account maintenance fee: None
  • ATM fee: None
  • ATM fee refund: Can receive up to $8 per month
  • Overdraft fee: None

Axos Bank’s Golden Checking account is for customers 55 and older. It’s ideal for those who want high interest rates without any fees attached.

The account also caters to those who use personal checks more often than ATM withdrawals. There are no limits to how many checks you can write per month, and customers receive free checks every six months.

This checking account earns a variable rate, which means it can change over time. But you can start earning interest no matter your account balance.

How to get Axos Bank’s Golden Checking account

Apply for the Golden Checking account on Axos Bank’s website, making it quick and easy to find out if you qualify. You will need to provide some information such as your Social Security number and a valid ID. As with other checking accounts with this bank, you’ll need to create an account to get started. You’ll be able to get a decision in a few minutes.

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First Checking

Teens will like an interest-bearing checking account tailored for them. Co-owners can rest easy with the account’s built-in transaction limits.
APYMinimum Balance to Earn APY
0.25%$0.01
  • Minimum opening deposit: $50
  • Monthly account maintenance fee: None
  • ATM fee: Fees in place once $12 in monthly reimbursements are met
  • ATM fee refund: Up to $12 in fee reimbursements each month
  • Overdraft fee: None

Teens ages 13 to 17 can only have this account with an adult co-owner. The account can be ideal for teens who want to learn how to manage their own money while earning interest on their deposits. Parents may welcome the account’s limitations.

Teens cannot write checks and have daily transaction limits. They can only withdraw up to $100 each day, while the account limits daily point-of-sale transaction to $500. A limit on fees also helps make this checking account a win.

How to get Axos Bank’s First Checking account

Customers can be offered Axos Bank’s First Checking account only when the main account holder requests it. The application process can be done online, but the applicant must be 18 or older. The joint owner of this account will need to apply as the “primary owner,” and the teen applicant will apply as the “secondary joint owner.” An online account will need to be created if one is not already made, and a decision will be made within minutes.

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Second Chance Checking

With fees to pay, daily transaction limits and no interest to earn, this checking account is a hard sell.
  • Minimum opening deposit: $50
  • Monthly account maintenance fee: $6.95 if you have direct deposit set up; otherwise, it’s $8.95
  • ATM fee: Yes, depending on the ATM being used; there are daily limits, such as only being able to withdraw $310 and only spending $500
  • ATM fee refund: None
  • Overdraft fee: $25

If you want a checking account and can’t get a more traditional alternative, the Second Chance Checking account may be an option. You do receive a free debit card — but not without a lot of shortcomings. When compared to the top five second-chance bank accounts, it requires a slightly higher minimum deposit to open. Like some of its top competitors, it provides optional overdraft protection if desired.

As with other second-chance bank accounts, there are daily transaction restrictions to watch out for and monthly maintenance fees to consider. Another big drawback is this checking account doesn’t earn you any interest.

How to get Axos Bank’s Second Chance Checking account

Unlike Axos Bank’s other checking accounts, you can’t apply for a Second Chance Checking account online. You will need to speak with a bank representative by calling the customer service number at 888-502-2967 to see if there are any other options before you can apply for Second Chance Checking.

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How Axos Bank’s checking accounts compare

Axos Bank offers relatively high interest rates. Its Rewards Checking account made our list of the best online checking accounts. But to earn the highest interest rate with a checking account at Axos Bank, you need to meet several spending and saving requirements with the Rewards Checking account.

Another thing we like about Axos Bank’s checking accounts is the usually low minimum deposit. While other banks may require a hefty deposit to open a checking account, Axos Bank usually doesn’t. Often, there is no required deposit at all.

Axos Bank’s savings account options

High Yield Savings

The interest earned can be great, but the heavy transaction limits are not.
APYMinimum Balance to Earn APY
1.30%$0.01
  • Minimum opening deposit: $250
  • Minimum balance to earn APY: 1 cent
  • Monthly account maintenance fee: None
  • ATM fee: Yes, depending on the ATM being used
  • ATM fee refund: None
  • Overdraft fee: $25

Axos Bank’s High Yield Savings account may be good for those who are looking to earn interest on their money without dealing with a lot of unwanted fees. Customers don’t have to worry about paying a monthly maintenance fee, for example, nor do they need to be concerned about a minimum balance requirement.

What they do need to keep an eye out for are the various transaction limits, such as on purchases, withdrawals and transfers. Due to Regulation D — which sets federal requirements on deposit accounts — the bank may charge a fee, close the account or convert the account to a checking account if customers go over the withdrawal limit.

How to get Axos Bank’s High Yield Savings account

Opening a High Yield Savings account with Axos Bank is relatively simple. The entire application can be completed online. You’ll need to create a bank login if you’re a new user by providing basic information.

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Second Chance Savings

Score a free ATM card — but not without daily ATM transaction limits that need to be followed.
APYMinimum Balance to Earn APY
0.25%$0.01
  • Minimum opening deposit: $50
  • Minimum balance to earn APY: 1 cent
  • Monthly account maintenance fee: None
  • ATM fee: $1
  • ATM fee refund: No
  • Overdraft fee: $25

This second-chance account may be tempting due to its interest rate and low fees, but there are limitations on how much of your money you can access each day. Customers are only allowed to withdraw up to $310 per day and spend up to $500 each day. On top of that, there are transaction limitations with transfers made online and by phone for both non-bank and Axos Bank accounts.

Because of federal Regulation D, the bank can charge a fee if you go over six transfers per month. If you keep exceeding this limit, the bank may convert your account.

How to get Axos Bank’s Second Chance Savings account

If Axos Bank’s Second Chance Savings account is of interest to you, you will need to speak with a bank representative to apply. Customers are not able to apply for Second Chance Savings without speaking to a representative to decide if this is the best option if you do not qualify for another type of savings account.

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How Axos Bank’s savings accounts compare

When compared to the best online savings accounts, Axos Bank’s savings accounts have rates that are on the low side. For example, American Express National Bank’s Personal Savings account offers a 2.00% APY, while Vio Banks’ High Yield Online Savings account allows you to earn 2.35% APY. Axos Bank’s High Yield Savings account only allows you to earn 1.30% — and that’s the highest of its two saving account offerings.

But the bank is on par with the minimum deposit requirements offered elsewhere. Some of the best offerings out there today require a minimum deposit of $50 to $100, and that’s on the lower scale, coming close to what Axos Bank requires. Of course, there are also other banks and credit unions that ask for $10,000 or more, while others don’t ask for anything upfront. Axos Bank has some bonuses to consider, too, including free ATM cards, similar to those ranking high on the list.

Axos Bank’s CD rates

Certificates of Deposit

High interest earnings, guaranteed returns and flexible terms all help make for a lucrative investment.
TermAPY
3 months0.55%
6 months0.75%
12 months1.00%
24 months1.20%
36 months1.30%
48 months1.40%
60 months2.25%
  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: $1,000
  • Early withdrawal penalty: Half of the interest slated to have been earned if matured

There are a lot of advantages to opening a CD with Axos Bank. Customers can earn high interest (with longer terms) and see guaranteed returns. Customers also have the flexibility to choose their own terms. A bonus includes free interest transfers that are made electronically. There are also no fees to set up the account or to maintain it.

One major downside is that you have to wait until the CD matures until you can withdraw any portion of your funds. If you don’t abide by these regulations, you can be faced with a penalty.

How to get Axos Bank’s Certificates of Deposit

To get started, create a username and password on the bank website. You will then be prompted to supply some standard information, such as your Social Security number and a valid photo ID. A decision can be made in a few minutes, so you’ll know if you’re approved right away.

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How Axos Bank’s CD rates compare

Axos Bank’s CD rates are low when compared to the best CD rates. The minimum deposit requirements are near the middle of the leading companies on our list, but they still average on the higher side.

But Axos Bank’s CDs allow more flexibility with its terms, unlike top competitors that only allow you to choose from fixed terms.

Axos Bank’s money market account options

Axos Bank’s High Yield Money Market

You have the potential for earning interest, but not without a few drawbacks.
APYMinimum Balance to Earn APY
1.05%$0.01
  • Minimum opening deposit: $1,000
  • Minimum balance to earn APY: 1 cent
  • Monthly account maintenance fee: None
  • ATM fee: Depends on the ATM used
  • ATM fee refund: None
  • Overdraft fee: $25

Axos Bank’s High Yield Money Market account might be a solid option for those who have money with which they want to earn interest. Other positives include check-writing abilities and the use of a debit card.

But if you’re looking to earn a tad more interest, the bank’s High Yield Savings account might be a good alternative. It offers a 1.30% APY, which is slightly higher than what can be earned with this money market account.

Federal Regulation D has specific transaction requirements per month. Failure to follow those rules can be subject to excess withdrawal fees and possible account closure.

How to get Axos Bank’s High Yield Money Market account

Applying for a High Yield Money Market account with Axos Bank is simple because it can be done online. Create an account to get started and then fill out the application form with your basic information, such as name and Social Security number, to see if you are approved.

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How Axos Bank’s money market account compares

This company’s money market account offers much lower rates than those with the best money market rates. Some of the top institutions offer 1.85% and higher, while Axos Bank’s APY weighs in at only 1.05%. Many of these top offerings don’t require a minimum deposit and some only need $100 or $250 to open an account, while Axos Bank requires $1,000. But there are also those on the list with high rates that require a large sum of money upfront, such as $10,000 to $25,000, making Axos Bank’s requirement appear relatively small.

Axos Bank’s IRA account options

IRA CDs

Interest is compounded daily, making for ultimate earning potential — but not without a large deposit.
TermAPY
12 months0.60%
18 months0.70%
36 months0.75%
  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: $1,000
  • Early withdrawal penalty: Half of the interest earned if the money was left the entire duration of the term

Axos Bank’s IRA CDs can be ideal for those looking for interest compounded on a daily basis to help funds grow and see returns that are consistent. The interest rates are determined based on the length of the CD term.

One negative with these CDs is the minimum deposit that requires customers to deposit a decent chunk of cash upon opening the account.

How to get Axos Bank’s IRA CDs

If you’re interested in applying for Axos Bank’s IRA CDs, you can do so online. The prompts are easy to follow, asking you first to create an account with the bank, followed by providing your Social Security number and a valid photo ID on your application. You will be able to know if you are qualified within a few minutes.

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How Axos Bank’s IRA CD rates compare

When looking at the best IRA CD rates, Axos Bank doesn’t even compare. The bank’s rates are low compared to the best offerings out there. Further, its minimum deposit requirement is similar to that of leading competitors. That means it may be a good idea to look elsewhere if you are interested in securing the best rate for an IRA CD.

IRA Savings

A lower minimum deposit and no monthly fees can help make up for lower interest rates.
APYMinimum Balance to Earn APY
0.15% Variable (Tier 1)$250 - $1,000
0.70% Variable (Tier 2)$1,000 or more
  • Minimum opening deposit: $250
  • Minimum balance to earn APY: $250
  • Monthly account maintenance fee: None
  • ATM fee: N/A
  • ATM fee refund: N/A
  • Overdraft fee: None

Axos Bank’s IRA Savings account does have a minimum deposit, but it is less than some other account options, including on its IRA CDs. To earn 0.15%, you will need at least $250 in your account. Once your account hits $1,000 or more, you will then graduate to earn 0.70% APY.

Returns are consistent and interest is compounded daily, allowing for plenty of earning. It is variable, so it can fluctuate.

Excess withdrawal fees can be accounted for with certain savings accounts, due to federal Regulation D, which can cause a bank to charge a fee, close an account or convert an account to a checking account if a customer goes over the withdrawal limit. But Axos Bank’s website does not specify whether there is an excess withdrawal fee for the IRA Savings account.

How to get Axos Bank’s IRA Savings account

Customers interested in applying for Axos Bank’s IRA Savings account can do so online. The website is easy to follow and provides simple instructions on how to get started. You’ll begin by creating an account. Then you’ll complete an online application form to see if you are eligible for the IRA Savings account. You should receive a decision a few minutes after you complete your application.

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Overall review of Axos Bank’s banking products

Axos Bank offers some solid banking products that often don’t have lots of unwanted fees. Another positive is the flexible terms that some of the products come with, allowing the customer to choose the length that works best for them.

But Axos Bank doesn’t usually provide the highest interest rate, especially when compared to its competitors, so the earning potential is there but not great. So, if you’re like many and want to earn the highest interest rates you can, it may be wise to search elsewhere.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
Carissa Chesanek |

Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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Earning Interest

Money Market Account vs. Savings Account: What’s the Difference?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

money market vs. savings account
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Money market and savings accounts can be good options when you want to deposit your money and keep it in a safe place. If you’re wondering which option is better for your savings, we’ll explain in this post.

First, why save your cash in a savings or money market account at all? Your short-term savings needs a safe place to stay and possibly grow without too much risk. You also want to have it in a place that allows you to withdraw it if or when it’s needed. That’s where a deposit account can come in handy. Not only can you deposit money into the account, but you can also withdraw the funds if a financial emergency comes up.

You can set up a deposit account with your local bank, an online bank or a credit union. Two popular examples of deposit accounts are savings accounts and money market accounts, also known as demand deposits.

With demand deposits, you can withdraw the funds you need (sometimes even the full amount) without needing permission from your bank. Money market and savings accounts can also earn interest so that your funds can grow over time. Often, these two accounts can provide a higher annual percentage yield (APY) than other demand deposits, including a checking account.

Deposit accounts can also be categorized as time deposits. Both certificates of deposit (CDs) and IRA CDs can be grouped into this category. Like money market and savings accounts, these accounts can accumulate interest, but there can be fees tacked on if you withdraw your money early.

Money market vs. savings: 2 key similarities

1. Both carry an interest rate

Whether you open a savings or money market account, you have the potential to earn interest on the money you deposit. Interest rates with both can fluctuate, and while money markets have been known to have higher rates in the past, that’s not always the case today.

There are times when money markets and savings accounts can have similar interest rates. Separately, the interest rates with savings and money market accounts can be lower than with other forms of deposit accounts, including CDs.

2. Both limit withdrawals

Money market and savings accounts can come with some restrictions. You may not have full access to your money since there are limit withdrawals to consider. Due to Federal Reserve Board Regulation D, there may be limitations when withdrawing or transferring your funds, including being allowed up to six transactions every month.

If you fail to meet these requirements or exceed your monthly limit, you can be subject to withdrawal fees or your account being terminated. It’s always important to check with your bank or credit union to learn about its specific terms and potential fees so that you know what to expect.

Money market vs. savings: 2 key differences

While there are some similarities between money market and savings accounts, there are also a few differences of which to be aware. Sure, they allow you to deposit your money and withdraw it if needed, but there are rates and deposit requirements to consider.

Here are some of the main differences between the two accounts that you should keep in mind.

1. Money market accounts typically have higher rates

While the rates with money market and savings accounts can sometimes average out to be the same, money markets can still often offer higher rates. That is usually because money market accounts can require larger deposit amounts.

You can see the difference when you compare rates with savings accounts from brick-and-mortar banks, which can average 0.01% APY. But when you compare online banks, the interest rates for savings and money market accounts are very similar. For example, Marcus by Goldman Sachs offers 2.05% APY with its online savings account, which is just above the 2.00% APY offered by Capital One’s 360 Money Market account for balances greater than $10,000.

But when you look at VirtualBank, an online banking institution, you’ll find it offers a fixed rate for its eMoney Market account. With it, Virtual Bank offers a 0.80% APY for the first year.

2. Savings accounts have lower minimum opening deposit requirements

When you open a savings account or money market, you will most likely need to deposit a minimum amount of money. Each bank and credit union has requirements, but savings accounts usually have a lower minimum than with most money markets. And some savings accounts don’t even require you to deposit a certain amount of money when you open an account.

For example, MySavingsDirect doesn’t require a minimum deposit amount to put your money into one of its savings accounts. But MutualOne Bank requires at least $100 to be deposited for a savings account, while Citizens Access requires $5,000.

Money markets usually require a minimum deposit that can range from institution to institution, but they can often be higher than with a savings account. Also, to get the best rate with a money market account, you’ll usually need to have a certain amount of money in your account. As you may remember, Capital One 360 Money Market provides a high rate of 0.85% APY. While it doesn’t require a minimum deposit when you open the account, you will not get the0.85% APY until you have at least $10,000 in your account. Anything below that will receive 0.85% APY.

Which account is best for you? 4 factors to consider

Both money market and savings accounts have pros and cons to take into consideration before you make a decision. It can seem hard to decipher the right choice for you, which is why researching both is a smart idea. When trying to decide between these two accounts, here are a few important factors to think about:

  1. You have a high opening deposit: Many money market accounts ask for a high opening deposit. In return, they can offer higher rates. This might be a good option for you if you have the funds to make a larger deposit and want to earn more interest.
  2. You’re just starting out: If you don’t have a lot of money to put into a money market account that asks for a high deposit, you may want to consider a savings account. Shop around to find one that doesn’t offer a minimum deposit requirement (or a low amount), and offers a sizable APY so that you can start earning interest as you save.
  3. You want the option to write checks: If you need a lump sum of money and aren’t near an ATM or your bank to withdraw funds, you might want to write a check. Having the option to write out a check from your money market account might be ideal when unexpected financial emergencies arise. Just remember: You may come across some restrictions due to Reg D, such as only having a limited amount of checks you can write in a given time frame.
  4. You want to earn higher interest: While the interest rates can sometimes be close to the same, money markets can still possibly provide higher rates. If you want to maximize your interest earnings, it’s best to shop around to find a money market account that provides you with a higher rate. But keep in mind that you may need to put down a larger deposit or keep a specific amount of money in your account to receive these rates.

Where to find a money market or savings account

Now that you’ve learned the differences between a money market and savings account, you may be interested in finding one to deposit your money to keep it safe. Searching online for these types of deposit accounts is fast and easy, providing you with results in a few minutes.

Finding a money market or savings account doesn’t have to be a complex task. MagnifyMoney has its own savings account marketplace, which can help get you started. Begin by adding your ZIP code, the amount of money you want to put into your account and the length of time you want to keep your money in that particular account. Once you provide your personal information, you can then see results from various banks (online and brick and mortar) and credit unions. You’ll be able to compare the minimum deposit amount and APY to find the best option for you.

Money market and savings accounts are both solid choices for when you want to open a deposit account to put your money away. But there are some pros and cons of both accounts to take into consideration. It’s essential to do plenty of homework on both to see which works best for your financial needs. Once you decide which account you want to open, take your time to shop around for the best rates and inquire about all fees.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
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Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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Strategies to Save

The Ultimate Guide to Handling Your Emergency Fund

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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Unexpected expenses have a way of popping up at the worst possible times. A good way to be prepared is having an emergency fund. An emergency fund is money put aside to use when something comes up and you need money right away.

One example of an unexpected financial emergency is a car repair – and they are not cheap. The average cost of car repairs after an accident can range anywhere from $50 to $1,500+.

The Federal Reserve recently reported that 4 out of 10 people in 2017 would have difficulty paying for a financial emergency of $400. Instead of having an emergency fund to rely on, these people may use credit cards to pay off the bill, only racking up more debt, or asking someone else to fund them the money.

Don’t let an unexpected expense put your finances in jeopardy. In this guide, we’ll explain how much to save in an emergency fund and where to keep yours stashed.

What is an emergency fund?

An emergency fund is money put aside specifically for an unexpected financial emergency. These funds are there to help you tackle an emergency so you don’t have to take on debt to cover expenses.

There are many reasons why you might need an emergency fund. Some of the most common scenarios include:

  • Handle an unexpected medical cost
  • Pay for car repairs after an accident
  • Provide liquid assets in the event of a job loss
  • Use toward an unexpected home repair

And once you use your emergency fund, it’s essential to start saving again right away. You don’t want to be unprepared for anything else that can come up.

Deciding how much to set aside for a rainy day is a question with multiple answers. In the next section, we’ll look at a few different rules of thumb for saving amounts.

How much money you should save

When you start saving money for your emergency fund, you should strive to cover your financial needs that are based on your individual income and living expenses. Single-income families may differ from dual-income families, and self-employed may differ than those who have full-time jobs.

Here are a few good rules of thumb when determining how much to save:

3 months: Best for singles

If you are single with a steady job, saving three months can work well. You only have yourself to worry about so it’s only your living expenses that will need to be covered, rather than those of a spouse or children.

6 months: Best for married couples with kids

Those who have a spouse and children will likely need to save more money than those who are independent. Six months should cover the costs for those who are married with a stable income and have young children living with them.

9+ months: Best for the self-employed

Anyone who is self-employed or with infrequent income, such as freelancers, can benefit by saving more than those who have a stable income. Nine months is a good go-to target. This way you’re able to pay for any unexpected emergency, such as car damage, or the loss of a client or project.

Where to keep your emergency fund

Now that you know why you should have an emergency fund, it’s time to decide which accounts are best to stow away your cash.

Two popular accounts for emergency funds are savings accounts and certificates of deposit (CDs). A savings account at a financial institution allows you to earn interest on your funds. Savings accounts can be ideal for emergency situations because it’s easy to write a check and access funds via wire transfer or an ATM.

CDs are deposit accounts which require you to keep your money stowed away for a particular time frame. In return for keeping your funds tied up longer, you can receive a higher rate of return than you typically would with a savings account

There are also CD ladders, which should not be confused with CDs. A CD ladder a strategy used to open multiple CDs with different terms. The idea is that you’ll have a new CD maturing every few months or so, giving you more flexibility in how often you can access the funds in those accounts.

With all the different accounts out there, it’s hard to know exactly why a savings account or a CD is the best option for emergency funds. But there are some distinctions to watch out for.

Unlike stocks and mutual funds, which have principal risk so you can lose money, savings accounts and CDs do not. This is incredibly important for an emergency fund. You don’t want your emergency fund to go down when the market does and therefore, not be able to withdraw the exact amount you need.

Why checking accounts aren’t the best options for savings

A checking account is similar to savings and CDs because it doesn’t have principal risk. You can access your money freely without any limitations, which can also be a negative. If you can access your funds at any time, you may find yourself withdrawing from your checking when it’s not necessarily an emergency. Plus, the rates for a checking account are usually much lower than those with a savings account or CD.

You want to be able to access your money when needed, but you also want to be able to save it so it’s there should an emergency pop up. A savings account allows you to get your money fast while CDs can take a few days and with a penalty. As for CD ladders, the full balance is not usually available, only a portion of what’s in your accounts.

Savings accounts vs. CDs for your emergency fund

When deciding on savings accounts or CDs for your emergency fund, there are several factors to take into consideration. Let’s take a look at the pros and cons for these two accounts to gain a better perspective on which might work best for you.

When savings accounts make sense

A savings account is a viable option for an emergency fund because you are able to place your money in a safe place and have access to it when you need it. As long as you follow the transaction guideline limits, you will not have to pay a fee, and you still earn interest on your money as long as it’s in the account.
Pros

  • FDIC insured up to $250,000 per account
  • Deposit as much as you want without restrictions
  • You can withdraw from your account six times per month without any penalties
  • Online banks offer very competitive rates on savings accounts, many times more than traditional banks
  • As rates rise, online banks tend to offer higher rates on deposit accounts as well
  • Some savings accounts allow for check-writing abilities

Cons

  • Interest can be lower than some CDs
  • Traditional banks offer rock bottom interest rates
  • May get hit with excessive transaction fee if you make a withdrawal/transfer from the account more than six times per month

When CDs make sense

While a savings account may have an advantage over CDs when saving money in an emergency fund, there are times when CDs may work better, such as for overflow savings. Once you have met your goal with your savings, you may want to invest the rest of your money (or a portion of it) into a CD or a CD ladder strategy to earn interest.

A CD or CD ladder strategy makes the most sense for those who don’t need the money right away or want ongoing access to it. If you take the money out before the CD term is up, you are at risk of paying a penalty fee. And remember, if you leave your money in there, you can get a higher rate of return.
Pros

  • FDIC insured up to $250,000 per account
  • Interest rates are usually higher than regular savings accounts
  • Rates are locked until maturity so they won’t fall

Cons

  • Rates are locked, which means they can’t rise
  • Possible penalties for early withdrawals
  • Restrictions on deposits

Best savings accounts for emergency funds

A savings account can be a good option for an emergency fund. MagnifyMoney has its own savings account marketplace to help compare and find the right account for you. Simply add your zip code and account balance to review your results instantly. To help get you started in your search, here are some of the best online savings accounts that may help you stow away cash for an emergency.

 

Marcus by Goldman Sachs Bank USA

Ally Bank

Synchrony

MySavings Account from MySavingsDirect

APY

2.05%

2.00%

2.05%

2.40%

Linked debit card?

No

No

Yes

No

Ways to access your funds

- Funds transfer with linked account
- Wire transfer

- Funds transfer
- Wire transfer Phone transfer -Check request

- Online transfer
- Phone request
- ATM withdrawals

-Transfer funds electronically

Time to transfer funds

Next business day

3 days; can also be expedited for 1-day transfer

Immediately for outgoing transfers

2-4 days

What to look for when vetting emergency savings accounts

When searching for a savings account, it’s smart to check out online banks. Many times you can find higher yields without monthly maintenance fees tacked on.

Keep an eye on savings accounts that can offer limited check-writing abilities for easy access to your money. Also, look into the bank’s transfer requirements and restrictions.

“If you need to move money from the savings account to your checking account to cover an emergency bill, you’ll want the transfer to be fast without small-dollar limits on the transfer,” said Ken Tumin, editor of DepositAccounts.com (also owned by LendingTree).

Best CDs for emergency savings

If you’re looking for CDs to help keep your emergency fund on hand, there are also many to choose from. Find some of the best CD rates directly on MagnifyMoney’s CDs marketplace by putting in your zip code and the amount you’d like to deposit.

Here are a few CDs you may want to keep an eye on as you begin your search.

 

Goldman Sachs Bank USA

Synchrony

Barclays Bank

Ally Bank

Terms available

6 months — 6 years

3 months — 5 years

1 year — 5 years

3 months — 5 years

Deposit required to earn starting APY

$500

$2,000

No minimum deposit

No minimum deposit

APY range

0.60% APY — 3.15%APY

0.75% APY — 3.10%APY

0.35% — 3.10% APY

0.75% APY — 3.10% APY

Early withdrawal penalty

For a CD term of less than 12 months, there is
“90 days simple interest on the principal at the rate in effect for the CD”

Starting with: 12 months or less terms are charged 90 days interest at “current rate”

Less than 24 months, there is a penalty equivalent to 90 days interest

There is an early withdrawal penalty for both high-yield CDS and raise your rate CDs; penalties vary and are determined on your CD term

What to look for when vetting emergency CD accounts

As with savings accounts, there are many options when shopping for CDs. Be sure to seek out banks that offer competitive rates, low early withdrawal penalties, interest withdrawal without penalty and bank-to-bank transfers that are done electronically so you can get your money the fastest.

6 tips for saving money for an emergency

Saving money for an emergency fund can seem daunting, especially when you are first starting to save. However, there are a few easy tips to help pave the path for a solid fund.

1. Make your emergency fund a priority

Start saving for an emergency immediately. Once you have reached your emergency fund goal, work on other financial plans and investments.

2. Adjust your budget

Cut down your spending habits and try your best to stick to a budget. Be truthful about your financial situation and don’t spend money you don’t have.

3. Use other cash sources

Try to put away cash received from other resources before you even miss it, such as work bonus, a raise or additional income from another resource. This way you won’t be worrying about trying to nickel-and-dime your paycheck to add money to your fund.

4. Don’t use your emergency fund for just anything

As your emergency fund grows, be sure to keep it there. You don’t want to use it on something else, such as a big, lavish purchase and then need it for a future emergency only to find it’s no longer there.

5. Be diligent about saving

Try to stick to your savings goal. Put away the same amount every month no matter what else may come up.

6. Pay down your debt

If you have a lot of debt, you’ll want to get that paid off as fast as possible. It’s hard to save when you have high bills (with high-interest rates) to pay off every month. Treat debt payments as a form of savings — just think about all the interest charges you’ll avoid by paying it off quickly.

You never know when a financial emergency might come up. Try your best to be well-prepared with an emergency fund. This fund will keep your money in a safe place so you can access it if an emergency should happen.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
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Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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Home Equity Loans for Debt Consolidation – What to Consider

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

consolidating debt with a home equity loan
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If you need money fast, a home equity loan might be a good option. A home equity loan can provide you with a lump sum of money in a matter of weeks; the borrowed amount can then be paid off on a monthly basis for a fixed rate. It can be especially helpful to use this type of loan to help consolidate your current debt. A home equity loan can combine debt from various lenders, such as different credit card companies, and place it into one convenient payment.

However, a home equity loan might not always be the best option for everyone. It’s important to understand how it works before making a final decision. This guide will help you learn what a home equity loan is, how it can be used, and how to qualify for one, so you can decide whether this loan product fits into your financial plan.

What is a home equity loan?

A home equity loan allows you to borrow money from a lender (usually a local bank) and uses your house as collateral for repayment. The interest rates can either be fixed or variable with a set repayment term of usually around 10 to 15 years.

“Home equity loans allow you to take out a lump sum up to a maximum percentage of the home’s value,” said Demond Johnson, a loan officer with Guild Mortgage based near Fort Worth, Texas. While the borrowed loan amount varies by each lender, it usually doesn’t reach over 80%.

You can use this loan for just about anything. However, it’s usually best when used toward an investment that will help you in the long run, like consolidating your current debt, and not used on something frivolous, like a luxurious vacation. Remember: You will need to pay this loan back — if you don’t, your house can go into foreclosure.

Pros and cons of a home equity loan

It’s important to understand the pros and cons of a home equity loan before considering applying for one. Consider the following.

Pros

  • It may be your cheapest option: Home equity loans typically have lower rates than a credit card or other loan product, said Johnson.
  • You may have a lower tax liability: The interest on home equity loans may be tax deductible.

Cons

  • You could lose your home: Home equity loans might not be a great option for those with poor spending habits. Since your home is on the line, these loans are best suited for disciplined borrowers who won’t miss payments.
  • You may accumulate more debt: Even though you’re consolidating your debt, you’re not debt free. Those who overspend and are not smart with their finances can continue to rack up more debt as time goes on, causing an even heavier financial burden than before.
  • You could misuse loan funds: A home equity loan can be used for just about anything, and that may be problematic for borrowers with poor spending habits. You may, for instance, want to pay for an upcoming vacation or wedding, but that will only result in more future debt without any return on your investment. Home repairs or renovations are a better use of funds, as they can increase your property value.

Using a home equity loan to consolidate debt

There are many solid reasons why someone might want to use a home equity loan to help consolidate debt.

Johnson said it makes sense to use this type of loan to help consolidate high interest debt such as with various credit cards because “the savings can be significant.” Using home equity loans to pay off other debts, such as student loans might also be wise, said George Burkley, owner of American Mortgage & Financial Services in Indiana — “[the] rates are usually much lower.”

Burkley also stated that if you’re looking to do home renovations or repairs on the house, or are interested in buying a second home, a home equity loan might be a good option to consolidate that debt, as opposed to using a credit card.

How to qualify for a home equity loan

When applying for a home equity loan, there are a few things a borrower will need to consider in order to qualify.

Collateral

Borrowers will need to have substantial collateral. For a home equity loan, your house is the collateral. If you can’t make the payments each month, the lender can take away your house.

Credit score

Lenders usually look at your credit score when you qualify for any type of loan, and a home equity loan is no different. A borrower’s credit score can play a significant role when qualifying for a home equity loan. Johnson said borrowers usually need a 680 (or higher) FICO score to qualify, but scores can vary depending on each lender.

Equity

A borrower’s equity can help determine how much funds can be borrowed with a home equity loan. According to Burkley, equity usually cannot exceed “over 85-95% of what the house is worth.”

Debt-to-income ratio

Lenders will look at your income and current debts, such as credit cards, current mortgage, and student loans, to determine whether you’re able to take out a home equity loan. Lenders want to ensure you can pay back your debt so if you already have a substantial amount, you may not be an ideal candidate. Burkley said borrowers should have around a 40% to 45% debt-to-income ratio to qualify for a home equity loan.

Where to find home equity loans

A home equity loan might be a good option for you. If you’re looking to find a loan, LendingTree might be able to help. With its online marketplace, you’re able to use one form to potentially be matched with up to five offers from lenders at once. First choose the type of property you need the home equity loan for, such as a condo, single family home or a townhouse. Then finish completing the form by adding your personal information and you’ll instantly receive offers available to you.

LendingTree also has a convenient home equity calculator that can help determine the estimated amount you’re eligible to borrow. This can help you to decide whether a home equity loan might be useful for your financial needs or if another option might be more efficient.

What to consider as you shop home equity loans

When searching for home equity loans, there are a few important aspects to keep an eye on. Here are a few of the most common aspects to watch out for.

  • Interest rates: Rates vary from each lender. It’s important to compare interest rates with all lenders to ensure you get the best possible rate for your financial needs. Keep in mind, some lenders are more likely to provide lower interest rates to those with excellent credit.
  • Origination fees: Some home equity loans can come with fees, such as origination fee that is applied when processing the loan.
  • Prepayment penalties: Lenders can also charge a prepayment penalty for when you want to pay off your loan early. It’s important to check with each lender to see which fees are tacked on.
  • Lenders: Search for a lender you feel most comfortable working with. You want to be able to actively discuss your financial needs with a lender so you can learn how their offers will fit for your budget and your lifestyle.

Home equity loan vs. HELOC: What’s the difference?

A home equity loan and home equity line of credit (HELOC) have a few similarities. For example, they are both backed by the equity in your home. The borrowed amount is also based on your home equity, which is normally around 80% to 90%.

However, there is a distinct difference between these two financial products: While a home equity loan provides funds in one lump sum, a HELOC is a revolving account. With the latter, you’ll be able to take out money you need during a certain time frame.

Johnson said it’s a good idea to consider a HELOC as “a VISA with a very large limit.” You’ll be charged interest on the money you borrow, and you’ll be able to pay off the HELOC and charge more to the account in the future.

However, Johnson warned that rates can change on a HELOC. That is something to consider when determining whether a HELOC is right for you.

Alternative ways to consolidate debt

Using a home equity loan to consolidate your debt might be the best option for you. However, there might be something else out there that’s an even better fit. To determine which is the best for you, it’s always smart to learn about all offerings so you get exactly what you need.

Debt consolidation loan vs. home equity loan

A debt consolidation loan (which can also be a personal loan) might be a good option for those who have a lot of debt from various lenders. Instead of paying a high-interest rate to each lender every month, you can consolidate the monthly payments into one lump sum. Often times, these rates can be much lower than what you were paying before.

Lenders usually look at your credit score for both a debt consolidation loan and a home equity loan. However, sometimes lenders can be more lenient with debt consolidation loans in terms of your credit score; oftentimes, borrowers can have less than stellar credit and still be approved for a personal loan or debt consolidation loan. However, those with excellent credit will be more likely to obtain lower interest rates with debt consolidation loans than those who have fair to poor credit.

And unlike home equity loans, debt consolidation loans don’t use your home as collateral, so you won’t have to worry about losing your home to the lender even if you can’t make payments. Find the best debt consolidation loans with our table below!

LendingTree
APR

5.99%
To
35.99%

Credit Req.

Minimum 500 FICO

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

LendingTree is our parent company

LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.

Balance transfer card vs. HEL

A balance transfer card with a promotional 0% APR can be ideal for those with high-interest credit card debt. However, qualifying for a credit card with a low balance transfer rate and promotional APR can be difficult.

While a home equity loan can be used to consolidate a variety of different debt, including home repairs, a balance transfer is strictly used for credit card debt.

Some balance transfer cards don’t come with a transfer fee, especially for those borrowers with excellent credit. However, many cards charge a fee equal to a certain percentage of your balance.

Home equity loans can sometimes allow borrowers to combine a larger amount of debt than with a balance transfer. However, a home equity loan requires you to have equity in your home. As a result, some homeowners may find that they don’t qualify for this type of financing.

A home equity loan can be a great option when you need money fast for debt consolidation, such as combining credit card debt or other debt accumulated by home renovations and repairs. But these types of loans aren’t always the best fit for everyone and should be well-considered before making a decision.

Discover it® Balance Transfer

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

Discover it® Balance Transfer

Intro BT APR
0% for 18 Months
Regular APR
13.99% - 24.99% Variable
Balance Transfer Fee
3%
Annual fee
$0
Credit required
good-credit
Excellent/Good Credit

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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Credit Card Consolidation Loans for Good & Bad Credit

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debt consolidation loan
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If you’re having a hard time paying down your credit card debt, you may want to consider consolidating with a credit card consolidation loan, better known as a personal loan. This is one strategy that can help give you the extra time you need to pay down several debts, especially if you’re struggling to manage multiple monthly payments. If you’re able to find a credit card consolidation loan with a low APR, you’ll be able to slash your interest charges, too, and potentially pay your debts off even faster. Use our comparison widget below to find the best loan for you!



Compare Credit Card Consolidation Loans

That being said, taking out a loan to pay off a credit card is not always the best option for everyone. It’s smart to consider the pros and cons to help determine whether a credit card consolidation loan is right for you.

In this article, we’ll cover everything you need to know about consolidating your credit debt with a loan.

What is a credit card consolidation loan?

A credit card consolidation loan is a personal loan that can be used to consolidate your credit card debt. An unsecured personal loan allows you to take out money without collateral. However, these loans can sometimes have higher interest rates because they are a risk to lenders. These types of loans can provide a fixed loan amount (what you want to borrow) with a fixed monthly payment and a fixed term. This helps you to know what you’ll pay each month and how long it will take to pay off the loan.

Personal loans can also have fixed-interest rates, meaning they won’t likely change throughout the length of your loan. These rates usually depend on your credit history. Those with good credit can usually receive lower rates than those with poor credit.

When should you consolidate?

People consolidate for many reasons and at various times. However, high-interest rates on current debt can be a major deciding factor. A credit card debt consolidation loan can possibly offer lower interest rates and provide one easy monthly payment.

Paying off your balance can often seem impossible, especially when you’re only making minimum payments each month. This might be a good time to consider consolidating your debt. With a credit card consolidation loan, you have a set period of time to pay off your debt (unlike with a credit card) so you can possibly get it paid off sooner.

If you consolidate your credit card debt with a loan, that debt is paid off. You no longer need to worry about high-interest rates and fees on your credit card accounts. Instead, you’ll only have one monthly loan payment to focus on.

While there are many good reasons to use a loan to consolidate your debt (we will get to a couple below!), there are times when this might not be ideal. For example, if you don’t have enough income to cover the cost of your loan payment each month or if you have an extremely high debt-to-income ratio, taking out a loan may not be the best option.

Why should I pay off a credit card with a loan?

There are many benefits when consolidating your credit card debt with a loan.

  • Have one monthly payment instead of multiple payments, and can possibly receive a lower interest rate and lower monthly payment.
  • Have a fixed term to pay off your loan so you can get your debt paid down faster.
  • Without several accounts to worry about each month, you can focus on paying just one.
  • By having a fixed monthly rate on a fixed schedule, you can get in the habit of paying your bill on time every month, which can help improve your credit score.
  • A loan can also help minimize your credit utilization rate. This is the rate that determines how much of your credit limit you utilize and is one of the major determining factors for your credit score. To retain a good credit score, your credit utilization rate should remain below 30%.
  • You’ll also improve your score by adding an installment loan to your credit report. Credit mix is part of calculating your credit score and it’s good to have a variety of revolving credit types.

How to qualify

When applying for a credit card consolidation loan, lenders look at certain aspects, including your credit score and income and expenses.

Credit score

Because your credit score is a reflection of your ability to manage and repay debt, the higher your credit score, the more likely it is you could qualify for a loan.

Your credit score is based on a number of factors, including:

  • Payment history: On-time payments show you can manage your finances. However, late or missed payments can bring down your credit score.
  • Amounts owed: This factor considers how much debt you are carrying compared to the amount of credit extended to you. A credit utilization ratio of 30% or less could indicate that you know how to manage credit.
  • Length of credit history: A long credit history is generally better than a short one. The average age of your open accounts may also be taken into account when calculating your credit score.
  • Credit mix: The types of credit you use may also affect your credit score.
  • New credit: When you apply for credit, your lender may conduct a hard credit inquiry on your credit report. Having too many hard credit checks in a short period of time could harm your credit.

If you don’t know your credit score and want to check as well as discover the factors that influence your score, you could sign up for My LendingTree. LendingTree is the parent company to MagnifyMoney.

If your credit is poor, you may want to consider a cosigner with good credit. You could also follow these steps to building your credit score.

Income and expenses

Income is another factor lenders may consider when approving you for a loan. But a high income does not necessarily mean you will get a better interest rate.

Although a higher income could mean you will be able to pay your monthly obligations, if you have high expenses, lenders may be wary of lending money to you. Thus, you should aim to have a low debt-to-income ratio.

Your debt-to-income ratio compares your monthly payments to how much money comes in each month. A lower debt-to-income ratio is preferable when you are applying for credit.

Fees and fine print to watch out for

While consolidating your debt with a loan can be smart, it’s not perfect. There are certain things to watch out for, including fees, penalties and the annual percentage rate (APR), which can vary with each lender.

Origination fee. Some lenders may charge an origination fee of 1% to 8% to process your personal loan application. This type of fee is generally included in the APR and deducted from the loan amount. That means if you borrow $10,000 and you’re charged a 2% origination fee, you’ll walk away with a loan of $9,800. An origination fee can be a percentage of the loan amount itself or charged as a flat rate.

Rates. The annual percentage rate (APR) is usually based on the borrower’s credit score. If a borrower has good credit, there is a better chance of receiving a lower rate. It’s essential to shop around to find the best rate for your needs.

Prepayment penalties. While most lenders don’t charge a prepayment penalty, it can happen. This is a fee to the borrower if they decide to pay off their personal loan early.

Precomputed interest. A certain way some lenders calculate interest on a personal loan that can have you paying a higher interest rate if you pay off your loan before the term is up.

Credit card consolidation loan vs. balance transfer

Consolidating your credit card debt with a credit card consolidation loan might be a good option, but it’s important to look over all other prospects to know for sure.

 Credit Card Consolidation LoanBalance transfer

Types of debt you can consolidate

Personal loans can be used to pay off different types of unsecured debt, including medical bills not covered by insurance, along with credit cards.

Credit card debt only. Can’t transfer debt from cards of the same issuer.

Credit required

Bad-excellent

Good

Rates

Up to 35.99% or higher depending on credit/lender

0% intro APR; variable APR once promo period ends

Term lengths

24-84 months

Promo periods typically last 12-21 months; balance can revolve indefinitely after that.

Fees

1%-8% origination fee; some lenders charge no origination fee.

3%-5% balance transfer fee; some offers do not charge a fee.

– Learn more about using a balance transfer to pay down debt here

Shopping for credit card consolidation loans online

Finding consolidation loan offers online is a relatively easy process and you’ll be able to compare different options all at once.

How to find them

Get started by having a firm grasp on how much you want to borrow and the amount of time you’ll likely need to pay back your loan. Keep an eye on your credit history so you know your score and can attest all information is correct.

Search and compare credit card consolidation loans online with the help of our easy-to-use online comparison tool at the top of this article. You can shop different borrowers at once with only a soft credit inquiry that will not impact your score.

LendingTree, our parent company, also has a convenient debt consolidation calculator that can help determine your estimated monthly payments by simply entering your consolidation loan amount.

What to compare

When shopping for a credit card consolidation loan, it’s important to compare the rates to find the best one that fits your budget. You want to ensure you’ll be able to pay for the monthly payments and that you are getting a better rate than the one you already have with your credit cards. You’ll also want to keep an eye on the loan terms and the loan amounts offered as each can vary. It’s also important to look for any possible fees, including origination fees that can sometimes be tacked onto personal loans.

Consolidating your credit card debt with a loan may be a good idea, but it’s smart to do extensive research to make certain it’s the right choice for you.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
Carissa Chesanek |

Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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Personal Loans

LendingPoint Personal Loan Review

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Disclosure : By clicking “See Offers” you’ll be directed to our parent company, LendingTree. You may or may not be matched with the specific lender you clicked on, but up to five different lenders based on your creditworthiness.

APR

15.49%
To
35.99%

Credit Req.

600

Minimum Credit Score

Terms

24 to 48

months

Origination Fee

Varies

SEE OFFERS Secured

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LendingPoint is an online lender that targets borrowers with fair credit, and allows borrowing up to $25,000.... Read More

LendingPoint personal loan details
 

Fees and penalties

  • Terms: 24 to 48 months
  • APR range: 15.49% to 35.99%
  • Loan amounts: $2,000 to $25,000
  • Time to funding: After the final approval, funds may be transferred in up to 1 to 2 business days, though often as soon as the next business day.
  • Hard pull/soft pull: LendingPoint conducts a soft pull when you first apply for a personal loan quote. After you review the loan offer(s) and select one, a hard pull will then be done to move forward with the final loan approval process.
  • Origination fee: The Varies, depending on your state of residence and credit history.
  • Prepayment fee: None
  • Late payment fee: Varies

Many lenders are strict about how many loans you can have at one time, sometimes maxing out at one per borrower. However, LendingPoint may allow you to take out two loans at once, depending on your current loan’s standing and your overall credit history. Being able to take out another personal loan can be helpful if a new financial issue comes up, such as an unexpected home repair, where you need more funds than your current loan can’t cover.

LendingPoint’s personal loans may be used for many different financial reasons. Whether you need to pay for an upcoming home renovation, you need funds to buy a car or need help paying off a medical bill your insurance won’t cover, a personal loan with LendingPoint can help. These personal loans can also be used to help consolidate your debt and refinance your credit cards.

Eligibility requirements

  • Minimum credit score: 600
  • Minimum credit history: LendingPoint looks at your overall financial potential to help determine whether you’re a good candidate for a personal loan, but it will only consider those who can show income of at least $20,000 a year.
  • Maximum debt-to-income ratio: 35%

All borrowers must be at least 18 years old and reside in one of LendingPoint’s 34 designated states or Washington, D.C. Borrowers are encouraged to show consistent employment history for at least the past 12 months and must have a bank account.

LendingPoint does not offer loans in:

  • Colorado
  • Connecticut
  • Iowa
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Nevada
  • New York
  • North Dakota
  • Rhode Island
  • South Carolina
  • Vermont
  • West Virginia
  • Wisconsin
  • Wyoming

Applying for a personal loan from LendingPoint

To begin the application process with LendingPoint, you’ll first need to provide basic background information, such as your name, date of birth, Social Security number, and annual income. This is the pre-approval process which will generate one or more loan offers in just a few minutes.

If you choose one of the offers and agree with the terms and rates, you will then need to provide any additional information and documents LendingPoint may request, including your driver’s license, bank statements (with voided check) and proof of income. Once all documents have been received and reviewed, a final loan approval can happen in a few hours, and your funds can possibly be distributed to your bank account within the next business day.

Pros and cons of a LendingPoint personal loan

Pros:

Cons:

  • No prepayment penalty. If you decide to pay off your loan before your term is up, LendingPoint will not charge you a prepayment penalty.
  • Fast approval and funding. Many borrowers are pre-approved for a personal loan within just minutes and approved for the actual loan within hours. Borrowers can possibly receive funds in their bank account the next business day.
  • Works with borrowers with fair credit. LendingPoint provides personal loans to borrowers with fair credit.
  • Bankruptcy is not grounds for automatic disqualification. Borrowers with a discharged bankruptcy of 12 months or more can still apply for a personal loan with LendingPoint. Your credit history, income and discharged bankruptcy timeframe will all be determining factors.
  • No joint or cosigner loans. Some lenders allow you to have a cosigner with a higher credit score in order to qualify for a better personal loan rate. That is not the case with LendingPoint’s personal loans, as they are based only on your individual credit history.
  • Fluctuating payment schedule. Your monthly due date may change because LendingPoint uses a 28-day payment cycle.
  • Higher interest rates. LendingPoint may work with borrowers with fair credit, but that can mean higher interest rates when compared with other lenders.
  • Origination fee. Many lenders don’t charge an origination fee for personal loans, which is why LendingPoint’s possible charge of up to 6.00% can be off-putting.

Who’s the best fit for a LendingPoint personal loan

If you have fair credit and meet the income requirements, LendingPoint could be a good option, especially if you need funds fast. The lack of a prepayment penalty is a plus, but other lenders offer lower rates, even for those with less than ideal credit.

It’s always a good idea to search and compare personal loans before making a final decision. Shop around to find the best personal loans with a rate and term ideal for your financial needs while also keeping an eye out for any fees associated with the loans, including origination fees. LendingPoint may be the best fit for you, but you should take some time to compare with others to know for sure.

Alternative personal loan options

Peerform

Peerform
APR

5.99%
To
29.99%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 5.00%

SEE OFFERS Secured

on LendingTree’s secure website

Even with a credit score of 600, you still might be able to secure a loan through Peerform. ... Read More


Peerform offers lower fixed rates ranging from 5.99% to 29.99% with loan amounts starting at $4,000 and maxing out at $25,000; terms are between 36 or 60 months. Similar to LendingPoint, there are no prepayment penalties should you want to pay off your loan in advance, but there may be an origination fee that varies from 1.00% - 5.00%. There are other fees to consider with Peerform as well — these include late fees, unsuccessful payment fees, and check processing fees, all of which can range around $15 each.

LendingClub

APR

6.95%
To
35.89%

Credit Req.

600

Minimum Credit Score

Terms

36 or 60

months

Origination Fee

1.00% - 6.00%

SEE OFFERS Secured

on LendingTree’s secure website

LendingClub is a great tool for borrowers that can offer competitive interest rates and approvals for people with credit scores as low as 600.... Read More


While LendingPoint allows borrowers to take up to $25,000, LendingClub offers loans up to $40,000 which is good for those looking to borrow more money. However, you will likely have to wait a little longer to receive the funds — LendingClub’s earliest distribution is within 7 business days. There are no prepayment penalties, but LendingClub charges an origination fee of anywhere from 1.00% - 6.00%, and you could also be charged a check processing fee or late payment fee. Credit history, the loan amount and any other outstanding debt are some of the factors used to determine the APR, which usually ranges from 6.95% to 35.89%.

OneMain Financial

APR

16.05%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Varies

SEE OFFERS Secured

on LendingTree’s secure website

Advertiser Disclosure

If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.... Read More


Loan approval and actual loan terms depend on your ability to meet our standard credit criteria (including credit history, income and debts) and the availability of collateral. Loan amounts subject to state specific minimum or maximum size restrictions. Collateral offered must meet our criteria. Active duty military, their spouse or dependents covered by the Military Lending Act may not pledge any vehicle as collateral. CA minimum loan amount is $3,000. GA minimum loan amount is $1,500 for present customers and $3,100 for others.


OneMain Financial has issued loans for more than 100 years and, similar to LendingPoint, can have money in your hands within the next business day after final approval. Loan amounts are from $1,500 to $30,000 with an APR range of 16.05% to 35.99%. Borrowers are eligible for terms of 24 to 60 months, depending on your credit and financial history and any other debts you may have. Credit score requirements vary and all personal loans have fixed rates and payments without any prepayment penalties. You may be able to get a loan offer within minutes when you apply online but will need to meet with a loan specialist in person for final approval.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Carissa Chesanek
Carissa Chesanek |

Carissa Chesanek is a writer at MagnifyMoney. You can email Carissa here

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