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The Ultimate Guide to Budgeting

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budgeting guide

In a consumer culture where we are bombarded with opportunities to spend money, whether it’s picking up a latte on the way to work, or splurging on a favorite retailer’s online sale, it’s easy to lose track of our money.

While creating and maintaining a budget is rarely how anyone wants to spend their free time, it is foundational to managing money.

“Everyone, no matter their financial situation, should have a budget in place,” said Rachel Kampersal, a marketing communications and program associate with American Consumer Credit Counseling.

Budgeting your monthly income can help you with everything from setting financial goals to making sure that you pay your bills on time and in full.

When you don’t budget your money, you are likely to overspend, said Melinda Opperman, executive vice president of

“A lot of people feel they simply don’t have enough money and think budgeting would be a waste of time, but budgeting helps people break even or even come up with extra money for savings and goals,” she said.

Those savings goals could be long-term, such as retirement, or for upcoming expenditures such as a new kitchen appliance, a down payment on a house, or a big vacation.

Budgets don’t have to be complicated, and there are plenty of tools to help you get started. The key is to find a budgeting strategy that works for you and stick with it.

5 budgeting tools to keep handy

An important component of any budgeting system is planning and keeping track of your expenditures, whether you are entering them into an app or spreadsheet, writing them on a paper calendar, or saving your receipts in a shoebox and tallying them on the weekend.
“Be sure to write a ‘receipt’ for everything you spend, including things like vending machines,” Opperman said.

“This is an individual process, so it’s important to try multiple tools until you come up with something that works for you,” she added. “A lot of people today might benefit from specialized budgeting apps, but there are still many who might prefer to keep track of their spending in a written journal.”

One convenient way to keep track of your budget is through an app or online budgeting tool that can help you manage your earnings and spending. Here are five to consider:

1. Mint

This free app, which is owned by Intuit, provides users with a comprehensive overview of their finances. Like many budgeting tools, Mint allows you to connect to your bank account from your mobile device and manage bills, build a budget with detailed categories, track spending, and analyze cash flow.

One of Mint’s best features is that it allows users to pay their bills — including credit card and utility bills — directly from the app. This adds another level of organization to a budget, as users can see what they owe, pay it, and see how the payment has affected their cash flow, all in a few clicks. For those who like a detailed analysis of their monthly spending and saving, Mint also provides charts and graphs and additional financial information, such as the current value of your house and your credit score.


on Mint Budgeting’s secure website

2. Pocketguard

This app, which is free, is marketed as a simpler approach to budgeting, and it does a lot of the initial set-up work for you. After you provide information for PocketGuard to sync up with your bank accounts, it analyzes your transactions and divides them into “pockets” based on repeated bills and charges it finds (you can manually correct any miscategorized items). After you enter spending limits for each category, the app lets you know how much money you have left in each category — a helpful feature when you need to know whether a purchase is within your budget.


on PocketGuard Budget’s secure website

3. You Need a Budget (YNAB)

While this app is fee-based, many find it worth the price — it’s one of the most highly rated budgeting apps on the market. It asks users to set up a budget by “giving every dollar a job,” or assigning all of your income into categories that you create. YNAB encourages users to be intentional with their money and create categories for recurring and occasional large expenses. That way, when a large bill comes in for a car repair or a vacation, the money already has been allocated for it.

You can try YNAB for 34 days for free, and after that it costs about $5 per month, or $50 per year. Along with the app, the fee will give you access to helpful personal finance videos and resources, as well as an online community.


on YNAB Budget’s secure website

4. HomeBudget

When budgeting is a family affair, HomeBudget is a great app to keep track of an entire household’s spending. Through its unique Family Sync feature, each family member’s income and expense transactions can be synced from their devices into one budget.

The app also allows you to track bills and payments due and correlate categorized transactions with your bank and credit card accounts. As of the date of publishing, the app currently costs $5.99 on Amazon App Store and has a monthly fee of about $1.66. You also can download a trial version before committing.


on HomeBudget’s secure website

5. Spendee

This easy-to-use app keeps it simple. It connects with your bank accounts to automatically enter expenditures into your budget (you can enter transactions manually, too), and then it creates infographics to help you understand and keep track of your spending and income.

The app costs $1.99 per month as of the date of publishing.


on Spendee ’s secure website

How to create a budget in 5 simple steps

You do not have to have a college degree in accounting to set up a personal budget. You’ll need to collect some personal financial information first, and then figure out which budgeting strategy is best for you.

1. Determine your monthly income

This first step is short simple: Find out how much money you bring in each month. Track down your paychecks from the past few months for a more accurate picture.

If you are married or sharing expenses with a partner, you’ll need to work together to figure out your joint income.

2. Track your expenses for a month

This should include everything from big expenses, such as your mortgage or rent payment, to your “fun” money for eating out or spur-of-the-moment purchases.

“If you sit down today and start planning your spending, you will miss all sorts of small expenses and you will be frustrated when your budget doesn’t line up,” Opperman said. “But if you diligently track all of your spending for a full month, then you will know all of the monthly expenses you can expect to face, and your budget will be more realistic.”

There are many ways to track spending; choose what fits with your lifestyle. Anything from a spreadsheet to a notebook will work.

3. Decide how much you want to save each month

Savings shouldn’t be only for known expenses, such as a wedding or planned home improvement. You’ll want to consider incorporating other “emergency” expenses into your savings calculations, such as replacing appliances or costly car repairs — that way, when the expense comes, you’ll be prepared.

There are several ways to figure out how much you’d like to save. You can decide on a percentage of your income or a dollar amount that you’d like to put aside each month.

4. Work in some ‘wiggle room’

No matter how carefully you track and forecast your spending, you will never spend the same amount each month — and you need to be prepared. “You might have particular months where you always spend more, like holiday gift shopping or back-to-school expenses,” Opperman said. “You have to plan for those variances in advance.”

In these situations, you may need to make sure that your budget is flexible enough to allow for extra expenditures when needed.

5. Choose a budgeting strategy

Once you’ve compiled your income and spending data and thought through your saving goals, it’s time to choose a budget style. Keep in mind that there is no right way to budget — any method that helps you manage your spending and save money will benefit you financially.

“A budget should be personalized and tailored to fit an individual’s or family’s needs,” Kampernal said.

Here are some strategies for budgeting:

Penny tracking

While the most detailed (and the most eye-opening), this method will show you exactly how much you are spending and leave no question as to whether you are living within your means.

To start, choose an amount for each category in your monthly budget. You can determine this from your month of tracking your spending or use financial experts’ guidelines. According to Kampernal, professionals’ guidelines include:

  • Transportation: 20%
  • Investments/savings: 20%
  • Housing: 35%
  • Debt: 5%
  • Other expenses: 20%

Once you’ve allocated your income into categories, you can begin entering each expenditure on a spreadsheet or online budget tracker. For example, if you bring home $3,000 every month and allocate $75 for eating out, you’ll mark every restaurant visit expenditure in this category — even that $1.69 soda you bought at the gas station. As the month progresses, you’ll be able to see whether you are on track to overspend or are staying within your “eating out” budget.

This method forces you to be accountable for your spending and provides a real-time picture throughout the month of where you are with your budget. If the consumer above has spent $60 on eating out by the 15th of the month, for example, he knows he’ll need to rein in the restaurant spending for the next two weeks to stay on budget.

Penny tracking can be tedious and doesn’t have to be a lifelong practice, but if done consistently, it will show you where you tend to overspend and how to realistically allocate your money. It can help you pay off debt, build savings, and develop realistic spending habits that could provide a lifetime of financial benefit. And if you ever wondered where all your money went, now you’ll know.

‘Leftovers’ budgeting

This type of budgeting is a little more relaxed than penny tracking, allowing you to lump your discretionary money into one category while still providing enough accountability to keep you from overspending.

Leftovers budgeting requires you to first pay your essential bills. Here’s an example of a budget for someone with a monthly take-home income of $2,700 (this is after taxes and a 401(k) contribution):

  • Rent/mortgage: $850
  • Utilities (power/water/sewer): $120
  • Cell phone: $75
  • Student loans: $250
  • Vehicle (monthly payment/insurance/gas): $250
  • Groceries: $400
  • Savings: $300

Your total monthly bills are $2,245. When expenses are subtracted from your income of $2,700, that leaves $455 for eating out, clothing purchases and any other spending you choose. Any discretionary funds leftover at the end of the month can be rolled into savings.

The envelope method

With this system, consumers assigned expenses to three categories of their budget following a 50/20/30 rule: Fixed bills (50%), savings and other financial goals (20%), and flexible spending (30%). You then monitor your spending within those categories.

For someone with a $2,700 monthly take-home income, that means fixed bills should total no more than $1,350 and savings and other financial goals should be allocated $540, leaving $810 for flexible spending — including groceries, entertainment and purchases.

The idea is that “when the money runs out, spending should stop,” Kampernal said. While you don’t have to literally put cash in envelopes for each category every month (the practice this style of budget is named after), you can imagine that when you’ve spent down a category to $0, the envelope is empty until it’s replenished next month.

Staying on track with your budget

No budget system will work if you cheat or stop paying attention to your spending — even for a few days. Here is some advice from budgeting experts on how to stick to your budget.

Keep it flexible: Unexpected expenses will crop up, which likely means you’ll need to re-evaluate your budget. Or, you may find yourself spending more in one category than you anticipated, and you’ll need to reduce another category to make up for it. “Stick to the process for a few months, making adjustments until you get the budget into a comfortable place for you,” Oppenheimer said.

Pay your debts off first: Debt payment can command a lot of your budget, and the faster you pay them off, the more quickly you’ll free up room in your budget for other spending.

Focus on paying off your debts up front. As you eliminate those obligations, you’ll have an easier time with the rest of your budget.

Automate your payments: Setting up automatic bill payments through your bank’s website for as many monthly payments as you can will ensure that those bills are paid on time and keep that part of your budget on track.

Consider going cash-only: Opperman said that many clients benefit from living on a cash basis. “If people are struggling to stick to their budget, we suggest leaving the debit card at home,” she said. “This takes away the ability to afford unplanned purchases.” If you really want to buy something, you’ll be forced to think about it until you can return with your card.

An alternative strategy to limit impulse buying is to give yourself a pre-paid credit card or gift card with a small limit, Opperman said.

Be careful with credit cards: Credit card spending can sink even the most well-intentioned budget, especially if you are paying off debts.

Oppenheimer recommends making it a priority to end borrowing with credit cards, as you’ll only accumulate more debt — and throw off your budget.

“If you do use credit cards, you have to make it part of your budget that you pay off the balance in full every month — before the grace period, so you don’t add interest charges to your spending plan,” Opperman said.

Knowing how you are spending your money eliminates risk and allows you to take charge of your finances. Keep the long-term game in mind — disciplined spending now equates to more savings, and, thus, more financial freedom, in the future.

Give yourself a little freedom: If you stray from your budget, don’t give up or punish yourself, Kampernal said.

“Sometimes, life happens,” she said. “Allow yourself to make mistakes and aim to do better in the future. Budgeting is now an ‘all or nothing’ mentality.”

Give yourself a reward if you have a little space in your budget at times. Get that take-out meal or buy that small item you’ve had your eye on.

“That way, you don’t feel trapped within your budget, but know that discretionary spending is accounted for,” Kampernal said.

The most important factor in budgeting is that you do it. Take the time to organize your financial information, track your spending, and personalize a budget style to fit you or your family’s needs.

“No two budgets are equal, so make yours realistic and livable so you are more likely to follow it,” Kampernal said.

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.

Marty Minchin
Marty Minchin |

Marty Minchin is a writer at MagnifyMoney. You can email Marty here

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Fair Debt Collection Practices Act: Understanding Your Rights

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fair debt collection practice act

Falling behind on debt payments can be stressful, and the last thing anyone wants is a barrage of calls or letters from a debt collector threatening repercussions if you don’t pay up now. While companies do have the right to ask consumers to pay their bills, there are government rules in place to keep debt collectors from unduly harassing you.

Calls from unscrupulous debt collectors can be frightening and unsettling. Before engaging with anyone who contacts you claiming that you owe money, it’s important to know your rights. Often, debt collectors may be lying or breaking federal law.

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (FDCPA), a federal law that was passed in 1978, provides guidelines on the actions that debt collectors can take when they try to get consumers to make payments on their debts. It prohibits abusive, deceptive or unfair practices and puts limits on when and how third-party debt collectors can contact people who owe money.

The FDCPA covers the collection of credit card, mortgage and medical debt, as well as debts from household, personal or family purposes, including student loans and auto loans. The FDCPA does not cover business debt or debts for agricultural purposes.

In-house collection versus third-party collection

One important aspect of the FDCPA is that it only applies to third-party collections. That means that the company where the debt originated, such as a bank or credit card company, does not have to abide by FDCPA rules when collecting debt.

But original creditors typically don’t collect their own debt or sue people who owe them money because it would make them look bad, said Ira Rheingold, executive director of the National Association of Consumer Advocates. Instead, these companies hire someone else — a third-party collection agency — to do it for them.

“It’s reputational,” Rheingold said. “If you are a credit card company, do you really want your name on all these lawsuits?”

If a debt collector contacts you, they likely are working for a third party such as a debt buyer or a debt collection agency. Some of these companies buy past-due debts, often at pennies on the dollar, and then use abusive means to try to collect the debt.

5 illegal debt collector practices

What debt collectors CAN do

What debt collectors CAN’T do

Call, email or send letters and texts

Harass you or anyone else with obscene language, lies or threats of violence

Contact you and your spouse

Contact you at work or call your employer

Contact other people once to get your address, home phone number and employer name

Claim to be attorneys, federal officials or government agents

Threaten to take your property if the process would be legal

Threaten consumers with postdated checks

Call you during the day at a convenient time

Contact you at an inconvenient time or between 9 p.m. and 8 a.m.

The bottom line is that third-party collectors are allowed to contact you within the FDCPA’s guidelines if you owe money. But if their behavior breaks the law, which includes threatening to call your grandma or your neighbor about your debts, you have recourse.

How to stop debt collector calls and letters

If you get a call from a debt collector, do not engage with them. That means do not give them personal or financial information, no matter how forcefully they ask. Instead, here’s how to handle unwanted calls and letters.

1. Be brief

It’s important to make calls short, but make sure you get some important information before you hang up. Tell the debt collector you want verification of your debt in writing. “Say to them, ‘I don’t believe I owe this debt. What proof do you have?’” Rheingold said. By law, the debt collector is required to tell you:

  • The creditor’s name
  • The amount you owe
  • That you can dispute the debt
  • That you can ask for the original creditor’s name and address

The debt collector is required to send you the information within five days of the initial contact.

While it can be tempting to try to negotiate over the phone with a debt collector, Rheingold recommended proceeding with caution, and don’t fall for a debt collector’s argument that you have a moral obligation to pay your debt.

Often, debt collectors pile exorbitant fees on top of the amount you owe. “Be very careful,” Rheingold said. “Oftentimes, it’s just throwing good money after bad.”

2. Get their information

Ask the caller for their company’s name and mailing address. If you receive a letter, save the return address.

3. Send a letter

Send the debt collector a letter by certified mail telling them to stop contacting you, and keep a copy for your records. This letter will trigger FDCPA rules that require the debt collector to leave you alone.

Keep in mind, however, that a letter will not magically banish a third-party debt collector. They are still legally allowed to contact you to confirm there will be no further contact or to notify you of any actions it can legally take, including a lawsuit or reporting negative information to a credit reporting company.

— Get more information on how to handle debt collection calls here

What to do if a debt collector does something illegal

If a collector contacts you, they could be breaking the law as they try to get you to repay debts. Rheingold said one common fraud is debt collection companies buying past-due debt for extremely low prices at “debt auctions” and then trying to collect it. Often, the debt collection company only has a little information about the debtor and no information about the actual debt. If you don’t pay, however, they may try to take you to court.

“They use our court system to collect debts when the debt is not provable,” Rheingold said. “They don’t have the original contract or accounting of how much money is owed. They will say you owe money, and if you don’t pay it, they sometimes will sue you.” If you don’t show up in court, the debt collector may get an easy win.

If you think a debt collector is doing something illegal, here are some options:

  1. Call your state attorney general’s office. Many states have additional laws about debt collection practices that may apply to original creditors and fraudulent lawsuits, and the office can give you details about your state’s laws.
  2. File a complaint with the Consumer Financial Protection Bureau (CFPB) online or by calling 855-411-2372.
  3. Talk to an attorney who specializes in debt collection. Attorneys can investigate whether a debt collector is breaking state or federal law and whether the claim is valid, defend you in court against a fraudulent lawsuit and respond to legal summons for you. You can get representation through a nonprofit legal aid clinic (where legal services are free), pro bono clinics at courthouses or private attorneys.

Debt collection: FAQs

Personal debts typically are considered delinquent after you miss the first payment, and if you don’t make any payments for six months or respond to the original lender’s collection efforts, the lender may turn the debt over to a third-party debt collection company.

At this point, you may start receiving letters, emails and phone calls to get you to make payments on the debt. Third-party debt collectors typically will try these tactics for about 90 days, and then they may sue you or sell your debt to another collection company.

Yes. The law requires a debt collector to send you a “validation notice” within five days of making contact with you. The notice must include the name of the creditor you owe money, how much money you owe and information about steps you can take if you don’t think the debt is yours.

First, never agree that the debt is yours. The FDCPA requires debt collectors to provide validation, such as a copy of a bill showing how much you owe on the debt, when you ask.

After you get the debt collector’s mailing address, send the company a letter within 30 days stating that you don’t owe the money and asking for verification of the debt. The debt collector also is required to stop contacting you if you ask in writing.

It’s likely that the debt collector has the incorrect amount for your debt or has tacked on high fees — Rheingold said you may owe $500, but a third-party debt collector may inflate that number to $2,500 with fees. Both of these practices are illegal. Third-party debt collectors cannot misrepresent the amount you owe or collect fees or interest above what’s stated in your original contract.

After sending a letter requesting that the debt collector verify the loan amount, file a complaint with the CFBP. If the debt collector sues you, seek legal assistance and respond to all court summons.

There’s a possibility that a third-party debt collector will sue you if you don’t agree to make payments on your debt, regardless of whether you actually owe the money. If you do receive a court summons, do not ignore it, Rheingold said. Be sure to show up on your appointed date, with an attorney if you can, to make sure that the court doesn’t rubber-stamp a judgment against you.

If a debt collector is contacting you about more than one debt and you do want to make payments, you can dictate where the payment goes. It’s illegal for a third-party debt collector to apply your payment to a debt that you have said you don’t owe.

You also may want to consider a serious assessment of your financial situation, Rheingold said. “You need to have a real understanding of what you can afford and what you can’t,” he said. “Maybe that’s the time to sit down with a financial counselor.”

You’ll also want to figure out which debts to prioritize. If you need your car for work, for example, you’ll want to pay your auto loan.

Any payments you can make need to be substantial, Rheingold said. “Paying a little money here and a little there isn’t going to do you any good,” he said. Making minimum payments while accumulating more debt will not lead to financial health, and, in extreme situations, consumers may want to look at bankruptcy options.

It depends. Debt collectors can have money taken from your paycheck and your bank account with a court order. But the debt collector first must sue you. That’s why it’s vital that you respond to any legal notices from debt collectors, preferable with legal counsel.

Federal benefits such as Social Security typically cannot be garnished for repayment of debts.

A statute of limitations, which begins when you miss your first debt payment, limits the window of time that debt collectors have to sue you and win payment. When that time frame passes, an unpaid debt is considered “time-barred.”

The length of the statute of limitations is determined by the type of debt and the laws in the state where your contract originated. Be careful: If you make a payment or acknowledge your debt in writing during the statute of limitations, the time will reset.


While debt collectors may be annoying or bordering on abusive, at times they are trying to collect a legitimate debt. In most cases, you can legally make debt collectors leave you alone, but your inability to pay outstanding debt remains.

“If you owe the debt, you can’t get blood from a rock,” Rheingold said. “But you can still say, ‘I don’t want you to call me anymore.’”

When you get the debt collectors off your back, take a hard look at your options. Making minimum payments typically isn’t enough to reduce debt, and it could prove difficult to rein in spending while you make debt payments.

Rheingold said nonprofit credit counselors will provide free guidance for people struggling to get out of debt, including information about bankruptcy. “Sometimes you’re better off getting a fresh start so that you can renew your credit (history),” he said. “If you find yourself in that position, think about how you got there and maybe seek help.”

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.

Marty Minchin
Marty Minchin |

Marty Minchin is a writer at MagnifyMoney. You can email Marty here

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Personal Loans

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Earnest personal loan details

Fees and penalties

  • Terms: Earnest loan terms range from 36 to 60 months.
  • APR range: The APR for this loan is 5.99% to 17.24%.
  • Loan amounts: You may borrow between $5,000 and $75,000.
  • Time to funding: Earnest aims to respond to most loan applications within five to 10 business days.
  • Hard pull/soft pull: Earnest performs a hard inquiry on your credit and only shows your rates once you have submitted your loan application, though the company says it’s working on a rate check for personal loan applications. This inquiry will appear on your credit report and will slightly lower your credit score.

Not only are there no fees, if you find yourself in a difficult situation that affects your ability to repay your loan, Earnest will work with you. It offers several ways to help borrowers.

  • Late payments: Earnest extends a seven-day grace period beyond the originally scheduled payment date to all clients. The lender also allows borrowers to adjust their monthly auto-payment date.
  • Unexpected financial changes: Earnest staff are available to immediately discuss borrowers’ situations with them.
  • Death or disability: If the borrower dies or becomes permanently and completely disabled, the executor of of the borrower’s estate can petition Earnest for relief.

Eligibility requirements

  • Minimum credit score: Earnest requires a minimum credit score of 680.
  • Minimum credit history: The lender looks for those with enough savings to cover two months of expenses, spend less than they earn, do not carry large amounts of credit card debt and have a history of making payments on time.
  • Maximum debt-to-income ratio: Though Earnest’s website does not specify a certain debt-to-income ratio, the lender consistently describes its target audience as responsible borrowers who keep their credit levels relatively low.

Earnest personal loans are not available everywhere — residents of Alabama, Delaware, Kentucky, Nevada and Rhode Island are ineligible. You must be 18, a U.S. citizen, long-term permanent resident alien or conditional permanent resident alien or hold certain visas through the life of the loan. Applicants must show that they are paid in U.S. dollars and have a consistent income.

Applying for a personal loan from Earnest

Earnest’s loan application process starts online like many other lenders, but it may require you to submit more information than competitors. The process begins with the borrower selecting a loan amount, terms and reason for applying such as credit card consolidation, debt refinance, or paying for a home improvement, security deposit on a rental property, vacation or honeymoon, wedding, a move or career development. “Other” also is an option.

The borrower must then create an account, providing name, state of residence and email address.

Applicants also will be asked to provide:

  • Education and employment information: The application will ask for all of your educational background and work history. Underwriters will use the information to get a picture of your academic and career growth as well as your earning potential to assess how likely you are to pay back your Earnest loan.
  • Financial information: You must provide Earnest with read-only access to financial transactions in your bank accounts by linking them to your Earnest profile. Underwriters will look at your balance history and transactions only, not your charges, and will use secure data from your accounts and LinkedIn profile to verify your identity. Earnest doesn’t sell any personal data or ever have access to your usernames or passwords.
  • Personal information: Earnest does not operate physical branches where staff could verify an applicant’s identity in person, so applicants are asked to securely upload a government-issued photo ID such as a driver’s license. You also will be required to enter your Social Security number so that Earnest can run a hard pull on your credit.

Earnest communicates through email once you submit your loan application. You may check the status of your loan during the review process by signing in to your Earnest account and clicking on “My Loans” at the top of the page. You may receive an email asking for additional information, and the final decision will be emailed. You can find more details about your loan offer when you sign in to your Earnest account.

You have seven calendar days to accept an offer. Earnest encourages successful applicants to contact the company during this period with any questions or concerns. Earnest will transfer the money to you by the next business day after you accept the offer and provide your bank account information. The funds should appear in your account within one to two days of signing.

Pros and cons of an Earnest personal loan



  • Low rates. Earnest has some of the lowest rates on the market, with a maximum APR of 17.24%.
  • Smooth application process: Despite the lengthy application process, Earnest’s reviews praise its ease and helpful customer service.
  • Comprehensive website: Earnest is upfront about its terms, rates and loan requirements, and its website is easy to navigate and provides detailed information about Earnest personal loans.
  • Extensive application: Earnest has a more involved application process than many other lenders, and it requires documentation of your financial, personal, education, and employment information.
  • Hard pull: Personal loan applicants will not receive their rate until their loan is approved, a process which requires a hard pull on your credit.
  • Responsibility required: Even though Earnest doesn’t base its loan decisions solely on credit scores, borrowers must prove they are financially responsible. Applicants who have struggled to pay bills in the past and whose finances are disorganized likely will not be approved.

Who’s the best fit for an Earnest personal loan?

Earnest personal loans are an excellent option for people in their 20s and 30s who have a college education and are establishing their careers but need to build credit. Unlike most lenders, Earnest will make a decision about their loan application based on their potential and career trajectory rather than just their past. As long as underwriters can determine that an applicant is financially stable, financially responsible and likely to pay back the loan, the applicant likely will be approved.
Borrowers who want a good deal on a versatile loan also should consider Earnest. The lender does not charge any fees, and its APR range is lower than many other lenders. While Earnest personal loans cannot be used to repay student loans or for businesses, they can be used for everything from consolidating debt to new job expenses to relocation.

Alternative personal loan options

Before you sign up, it’s important to research other lenders who offer different terms, stipulations and rates to make sure you get the best loan for your situation. MagnifyMoney’s online tool for comparing personal loans will give you a comprehensive look at your options.

This roundup includes loans that allow you to check rates with a soft pull.

Lending Club



Credit Req.

Not Specified


36 or 60


Origination Fee

1.00% - 6.00%


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 0.... Read More

LendingClub, established in 2007, works with borrowers with credit scores as low as 600, though their minimum credit requirements are not specified on their website, which is lower than Earnest’s minimum credit score of 680 though APR rates are as high as 35.99%. Unlike Earnest however, LendingClub will conduct a Soft Pull of your credit; it will not affect your credit score and will allow you to get rates and terms before deciding to apply.




Credit Req.


Minimum Credit Score


36 or 60


Origination Fee

1.50% - 6.00%


on LendingTree’s secure website

Advertiser Disclosure

Upgrade is an online lender that offers fairly priced personal loans for a term of either 36 or 60 months.... Read More .

Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.

Like LendingClub, Upgrade is an online lender available to those with fair credit that also offers a Soft Pull. A LendingClub loan may be a quicker turnaround than Earnest — once your application is approved, the money will be transferred to your bank account within four business days.

Marcus by Goldman Sachs®

Marcus by Goldman Sachs®


Credit Req.

Not specified


36 to 72


Origination Fee

No origination fee


on LendingTree’s secure website

Advertiser Disclosure

Marcus by Goldman Sachs® offers personal loans for up to $40,000 for debt consolidation and credit consolidation. ... Read More

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans).Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions. For New York residents, rates range from 6.99% to 24.99% APR.

This relatively new line of personal loans was launched by Goldman Sachs Bank USA. The lender offers no-fee personal loans, which sets it apart from others in this list, but its APR rates are somewhat higher than Earnest’s. Marcus will conduct a Soft Pull on your credit to generate rates and offers borrowers the option to defer one payment without accruing extra interest or fees. More than 80% of borrowers last year had a credit score of at least 660, according to Goldman Sachs’ most recent annual report.

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.

Marty Minchin
Marty Minchin |

Marty Minchin is a writer at MagnifyMoney. You can email Marty here

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