[{"data":1,"prerenderedAt":7473},["Reactive",2],{"/":3},{"data":4,"headers":7445,"perPage":7471,"total":7472},{"stories":5,"cv":7442,"rels":7443,"links":7444},[6,901,1687,2463,3318,4431,5176,5996,6834],{"name":7,"created_at":8,"published_at":9,"updated_at":10,"id":11,"uuid":12,"content":13,"slug":892,"full_slug":893,"sort_by_date":91,"position":894,"tag_list":895,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":897,"first_published_at":898,"release_id":91,"lang":899,"path":91,"alternates":900,"default_full_slug":91,"translated_slugs":91},"Pros and Cons of Refinancing a Car Loan","2025-04-07T18:31:12.279Z","2025-12-26T13:45:14.096Z","2025-12-26T13:45:14.126Z",651798192,"3c23eb7a-733f-4e9d-9dcc-1c3a3757ac4e",{"seo":14,"_uid":20,"body":21,"author":49,"category":888,"featured":45,"component":889,"canonicalTag":890,"_editable":891},{"_uid":15,"title":16,"plugin":17,"og_image":18,"og_title":18,"description":19,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"db825078-9852-44b7-ba28-87a0ab634c3c","Pros and Cons of Refinancing a Car - Navient Marketplace","seo_metatags","","Is refinancing your auto loan right for your situation? You can sometimes save money, but not always. Learn more about the advantages and drawbacks here.","b4f726d3-b250-4959-8ba5-96a548c8f070",[22,53,863],{"id":23,"_uid":24,"image":25,"intro":26,"author":27,"classes":28,"category":18,"featured":45,"blogTitle":46,"component":47,"imageLink":48,"blendImage":45,"authorRoute":49,"publishedDate":50,"backgroundColor":51,"_editable":52},"blog-hero","8108c18b-7090-41a8-9cf5-cb558022c719","//a.storyblok.com/f/110029/1207x803/3a15f6c2fd/pros-and-cons-of-refinancing-a-car.png","A car loan refinance can get you a lower interest rate on your existing auto loan and even reduce your monthly payments. If you qualify for refinancing, it can help you save money and get out of debt faster.","Natasha Khullar Relph",[29],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":37,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":44},"35b73934-8952-417e-a044-ff093864a938","BlogHeroStyle","#470A68","text-subtitle-2 mt-7 accent--text text--darken-2","text-h4 mt-6 font-weight-bold blog-info-section","text-size-sub-1 mt-7 accent--text text--darken-4","#75478E","600","text-h6 mt-n6 blog-post-subtitle","text-size-caption mt-4 accent--text text--darken-2","text-size-button-3 font-weight-bold","text-size-sub-1 mt-4 accent--text text--darken-4","text-size-sub-1 accent--text","text-size-sub-1 mt-n9 pt-5","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"35b73934-8952-417e-a044-ff093864a938\", \"id\": \"651798192\"}-->",false,"Pros and Cons of Refinancing a Car","BlogHero","/images/pros-and-cons-of-refinancing-a-car.png","natasha-khullar-relph","Updated: April 27, 2023 ","#F6F2F7","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"8108c18b-7090-41a8-9cf5-cb558022c719\", \"id\": \"651798192\"}-->",{"_uid":54,"bloks":55,"classes":859,"component":860,"mobileClasses":18,"containerContent":861,"_editable":862},"08891e4d-6ae3-45a4-bdf4-96de0165b6df",[56],{"_uid":57,"bloks":58,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":858},"a5066230-9526-4e22-855a-022c327c8659",[59,805],{"lg":60,"md":60,"sm":61,"_uid":62,"cols":61,"bloks":63,"alignSelf":802,"component":803,"_editable":804},"7","12","d0dc457f-10c8-40ff-a7ad-e9856d551058",[64],{"_uid":65,"color":66,"classes":67,"content":18,"richText":68,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":798,"_editable":801},"79c5b935-428a-4f01-954a-527cf1bf772e","#444444","blog-post-text blog-post-headers",{"type":69,"content":70},"doc",[71,97,104,114,121,130,137,144,211,218,226,245,252,260,267,274,281,301,309,316,323,330,338,345,352,359,367,374,382,389,396,404,411,418,534,542,549,557,564,572,593,600,607,615,636,643,651,658,687,694,723,731,758,768,777,786],{"type":72,"content":73},"paragraph",[74,82,92],{"text":75,"type":76,"marks":77},"A car loan refinance","text",[78],{"type":79,"attrs":80},"textStyle",{"color":81},"#000000",{"text":83,"type":76,"marks":84},"1",[85,89],{"type":86,"attrs":87},"styled",{"class":88},"superscript",{"type":79,"attrs":90},{"color":91},null,{"text":93,"type":76,"marks":94}," can get you a lower interest rate on your existing auto loan and even reduce your monthly payments. If you qualify for refinancing, it can help you save money and get out of debt faster — but only under the right circumstances. ",[95],{"type":79,"attrs":96},{"color":91},{"type":72,"content":98},[99],{"text":100,"type":76,"marks":101},"The fine print is that refinancing can come with hidden costs and limitations. That means it may not necessarily be the smartest move for your financial situation. Deciding whether or not to refinance is all about weighing the advantages against the potential drawbacks. With that in mind, here are some of the pros and cons of refinancing a car loan, and how to decide if it’s right for you.",[102],{"type":79,"attrs":103},{"color":81},{"type":105,"attrs":106,"content":108},"heading",{"level":107},2,[109],{"text":110,"type":76,"marks":111},"The pros of refinancing a car ",[112],{"type":79,"attrs":113},{"color":81},{"type":72,"content":115},[116],{"text":117,"type":76,"marks":118},"Auto loan refinancing comes with a long list of benefits. Here are some of the major ones to consider. ",[119],{"type":79,"attrs":120},{"color":81},{"type":105,"attrs":122,"content":124},{"level":123},3,[125],{"text":126,"type":76,"marks":127},"You can potentially lower your interest rate ",[128],{"type":79,"attrs":129},{"color":81},{"type":72,"content":131},[132],{"text":133,"type":76,"marks":134},"When you refinance, you essentially exchange your existing loan for a new loan. This new loan comes with new terms and a new interest rate. So, if you’re in a better financial position now than when you were originally approved for your loan, you might qualify for lower loan rates. ",[135],{"type":79,"attrs":136},{"color":81},{"type":72,"content":138},[139],{"text":140,"type":76,"marks":141},"Here are some markers that could indicate you’re in a better financial position: ",[142],{"type":79,"attrs":143},{"color":81},{"type":145,"content":146},"bullet_list",[147,157,166,175,202],{"type":148,"content":149},"list_item",[150],{"type":72,"content":151},[152],{"text":153,"type":76,"marks":154},"Your credit score has improved.",[155],{"type":79,"attrs":156},{"color":81},{"type":148,"content":158},[159],{"type":72,"content":160},[161],{"text":162,"type":76,"marks":163},"You got a raise. ",[164],{"type":79,"attrs":165},{"color":91},{"type":148,"content":167},[168],{"type":72,"content":169},[170],{"text":171,"type":76,"marks":172},"You got a new, higher-paying job. ",[173],{"type":79,"attrs":174},{"color":91},{"type":148,"content":176},[177],{"type":72,"content":178},[179,184,197],{"text":180,"type":76,"marks":181},"You took on a side gig to improve your ",[182],{"type":79,"attrs":183},{"color":91},{"text":185,"type":76,"marks":186},"cash flow",[187,193,195],{"type":188,"attrs":189},"link",{"href":190,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/what-is-cash-flow/","_blank","url",{"type":79,"attrs":194},{"color":91},{"type":196},"underline",{"text":198,"type":76,"marks":199},".",[200],{"type":79,"attrs":201},{"color":91},{"type":148,"content":203},[204],{"type":72,"content":205},[206],{"text":207,"type":76,"marks":208},"You paid off other debts.",[209],{"type":79,"attrs":210},{"color":91},{"type":72,"content":212},[213],{"text":214,"type":76,"marks":215},"If any of these are true, you may qualify for a lower interest rate and, therefore, a lower car payment. Even just a small decrease in your rate could save you a significant sum in interest over the life of the loan. ",[216],{"type":79,"attrs":217},{"color":81},{"type":105,"attrs":219,"content":220},{"level":123},[221],{"text":222,"type":76,"marks":223},"You can get better terms if you were taken advantage of",[224],{"type":79,"attrs":225},{"color":81},{"type":72,"content":227},[228,233,240],{"text":229,"type":76,"marks":230},"When you buy a new car (or a used car) through a dealership, all the financing is ultimately handled by credit unions, financial institutions, and certain car manufacturers. However, the process is completed ",[231],{"type":79,"attrs":232},{"color":81},{"text":234,"type":76,"marks":235},"through",[236,238],{"type":237},"italic",{"type":79,"attrs":239},{"color":91},{"text":241,"type":76,"marks":242}," the dealer. And the dealer won’t always quote you a lender’s best rates. ",[243],{"type":79,"attrs":244},{"color":91},{"type":72,"content":246},[247],{"text":248,"type":76,"marks":249},"Instead, they’ll sometimes quote you a higher rate and take the difference as profit. If you think you got a bad deal, refinancing could help you repair the damage. If you’re not sure, shop around and get prequalified with a few refinance lenders. What kind of rates could you get? If they’re significantly lower than what your dealer gave you, a refinance may be worth considering. ",[250],{"type":79,"attrs":251},{"color":81},{"type":105,"attrs":253,"content":254},{"level":123},[255],{"text":256,"type":76,"marks":257},"You can pay off your debt faster",[258],{"type":79,"attrs":259},{"color":81},{"type":72,"content":261},[262],{"text":263,"type":76,"marks":264},"When you refinance your car, you’ll have the ability to select a new loan term. Selecting a shorter term is a great way to save money on interest and get out of debt sooner. ",[265],{"type":79,"attrs":266},{"color":81},{"type":72,"content":268},[269],{"text":270,"type":76,"marks":271},"Here’s an example to illustrate:",[272],{"type":79,"attrs":273},{"color":81},{"type":72,"content":275},[276],{"text":277,"type":76,"marks":278},"Let’s say you owe $10,000 on your car with three years remaining on your loan term. Your annual percentage rate (APR) is 8.5%. If you refinance this loan at the same interest rate — but select a two-year term — your monthly payment will go up from $316.38 to $454.56. However, you’ll get out of debt a whole year sooner. And you’ll save a whopping $454.95 on total interest just by switching to a shorter loan term.",[279],{"type":79,"attrs":280},{"color":81},{"type":72,"content":282},[283,288,297],{"text":284,"type":76,"marks":285},"If you want to see how these numbers shake out for your car loan, you can use a ",[286],{"type":79,"attrs":287},{"color":81},{"text":289,"type":76,"marks":290},"refinance loan calculator",[291,294,296],{"type":188,"attrs":292},{"href":293,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.calculator.net/refinance-calculator.html",{"type":79,"attrs":295},{"color":91},{"type":196},{"text":198,"type":76,"marks":298},[299],{"type":79,"attrs":300},{"color":91},{"type":105,"attrs":302,"content":303},{"level":123},[304],{"text":305,"type":76,"marks":306},"You could lower your monthly payments ",[307],{"type":79,"attrs":308},{"color":81},{"type":72,"content":310},[311],{"text":312,"type":76,"marks":313},"If your monthly payments are so high that you’re struggling to make them, it might be worth refinancing to a longer loan term. If you miss a payment, that can have serious financial consequences. Even just one missed payment could lower your credit score and make it difficult to open new lines of credit in the future. ",[314],{"type":79,"attrs":315},{"color":81},{"type":72,"content":317},[318],{"text":319,"type":76,"marks":320},"Refinancing to a longer term spreads your loan repayment out over more months. Usually, that leaves you with a lower bill month to month. That can make it easier to pay your bills and free up room in your monthly budget for other things. ",[321],{"type":79,"attrs":322},{"color":81},{"type":72,"content":324},[325],{"text":326,"type":76,"marks":327},"There is one big downside to this. Though you’ll have lower monthly payments, you’ll be making more of them, which means you’ll end up paying more in interest over the life of your loan. You’ll have to consider whether or not it’s worth trading a higher overall loan balance for a lower monthly payment. ",[328],{"type":79,"attrs":329},{"color":81},{"type":105,"attrs":331,"content":332},{"level":123},[333],{"text":334,"type":76,"marks":335},"You can access the equity in your car ",[336],{"type":79,"attrs":337},{"color":81},{"type":72,"content":339},[340],{"text":341,"type":76,"marks":342},"If you need cash for a short-term emergency, a “cash-out refinance” can help put extra money in your hands fast. ",[343],{"type":79,"attrs":344},{"color":81},{"type":72,"content":346},[347],{"text":348,"type":76,"marks":349},"Also called “cash-back auto loan refinancing,” a cash-out refinance works similarly to a regular refinance. You simply trade your old loan for a new loan, hopefully with a better interest rate and better terms. The difference is that, with a cash-out refinance, you can also trade in any built-up equity in your car for cash. ",[350],{"type":79,"attrs":351},{"color":81},{"type":72,"content":353},[354],{"text":355,"type":76,"marks":356},"Since you’re getting cash in exchange for the equity, this amount will get added to your outstanding loan amount. You’ll need to make consistent monthly payments on this new, higher balance, which means you’ll likely pay more in interest over the life of the loan. ",[357],{"type":79,"attrs":358},{"color":81},{"type":105,"attrs":360,"content":361},{"level":107},[362],{"text":363,"type":76,"marks":364},"The cons of refinancing a car",[365],{"type":79,"attrs":366},{"color":81},{"type":72,"content":368},[369],{"text":370,"type":76,"marks":371},"Auto loan refinancing isn’t for everyone. Here are some potential disadvantages to keep in mind.",[372],{"type":79,"attrs":373},{"color":81},{"type":105,"attrs":375,"content":376},{"level":123},[377],{"text":378,"type":76,"marks":379},"It may be hard to qualify",[380],{"type":79,"attrs":381},{"color":81},{"type":72,"content":383},[384],{"text":385,"type":76,"marks":386},"Some lenders have restrictions on who is eligible to refinance. For example, you may be required to have a certain balance left on your current loan to qualify for a new loan. Additionally, some lenders won’t refinance cars that are ten years or older. Others have maximum mileage limits. ",[387],{"type":79,"attrs":388},{"color":81},{"type":72,"content":390},[391],{"text":392,"type":76,"marks":393},"If you don’t meet your new lender’s requirements, talk to your current lender about a refinance, or consider alternatives like taking out a personal loan. ",[394],{"type":79,"attrs":395},{"color":81},{"type":105,"attrs":397,"content":398},{"level":123},[399],{"text":400,"type":76,"marks":401},"Your rate might not improve ",[402],{"type":79,"attrs":403},{"color":81},{"type":72,"content":405},[406],{"text":407,"type":76,"marks":408},"A car refinance is only beneficial if it can save you a significant amount over the life of the loan. If your credit hasn’t improved much since you took out your current auto loan, you’re unlikely to qualify for sufficiently lower rates. (In some cases, you could even end up with a higher interest rate than you started with.) ",[409],{"type":79,"attrs":410},{"color":81},{"type":72,"content":412},[413],{"text":414,"type":76,"marks":415},"If you can, try to improve your credit score before you apply for a refinance. To do this, you can:",[416],{"type":79,"attrs":417},{"color":81},{"type":145,"content":419},[420,443,466,475,484,493,511],{"type":148,"content":421},[422],{"type":72,"content":423},[424,429,438],{"text":425,"type":76,"marks":426},"Open ",[427],{"type":79,"attrs":428},{"color":81},{"text":430,"type":76,"marks":431},"new lines of credit",[432,435,437],{"type":188,"attrs":433},{"href":434,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.equifax.com/personal/education/credit-cards/articles/-/learn/increase-credit-limit-vs-new-credit/",{"type":79,"attrs":436},{"color":91},{"type":196},{"text":439,"type":76,"marks":440}," or ask for higher limits on existing lines of credit.",[441],{"type":79,"attrs":442},{"color":91},{"type":148,"content":444},[445],{"type":72,"content":446},[447,452,461],{"text":448,"type":76,"marks":449},"Use no more than 30% of your limit on any credit card (this is called ",[450],{"type":79,"attrs":451},{"color":91},{"text":453,"type":76,"marks":454},"credit utilization",[455,458,460],{"type":188,"attrs":456},{"href":457,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/credit-education/score-basics/credit-utilization-rate/",{"type":79,"attrs":459},{"color":91},{"type":196},{"text":462,"type":76,"marks":463}," and is a key factor in determining creditworthiness).",[464],{"type":79,"attrs":465},{"color":91},{"type":148,"content":467},[468],{"type":72,"content":469},[470],{"text":471,"type":76,"marks":472},"Pay your bills on time.",[473],{"type":79,"attrs":474},{"color":91},{"type":148,"content":476},[477],{"type":72,"content":478},[479],{"text":480,"type":76,"marks":481},"Take on a side gig to improve your cash flow.",[482],{"type":79,"attrs":483},{"color":91},{"type":148,"content":485},[486],{"type":72,"content":487},[488],{"text":489,"type":76,"marks":490},"Check your credit report and dispute any errors.",[491],{"type":79,"attrs":492},{"color":91},{"type":148,"content":494},[495],{"type":72,"content":496},[497,506],{"text":498,"type":76,"marks":499},"Ask your creditor",[500,503,505],{"type":188,"attrs":501},{"href":502,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/article/finance/goodwill-letter",{"type":79,"attrs":504},{"color":91},{"type":196},{"text":507,"type":76,"marks":508}," to remove any late payments or settled collection accounts from your record.",[509],{"type":79,"attrs":510},{"color":91},{"type":148,"content":512},[513],{"type":72,"content":514},[515,520,529],{"text":516,"type":76,"marks":517},"Sign up for a service like ",[518],{"type":79,"attrs":519},{"color":91},{"text":521,"type":76,"marks":522},"Experian Boost",[523,526,528],{"type":188,"attrs":524},{"href":525,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/what-is-experian-boost/",{"type":79,"attrs":527},{"color":91},{"type":196},{"text":530,"type":76,"marks":531},", which will give you credit for on-time rent and utility payments.",[532],{"type":79,"attrs":533},{"color":91},{"type":105,"attrs":535,"content":536},{"level":123},[537],{"text":538,"type":76,"marks":539},"Your loan could become upside down ",[540],{"type":79,"attrs":541},{"color":81},{"type":72,"content":543},[544],{"text":545,"type":76,"marks":546},"If the value of your car falls below the outstanding balance on your loan, this is called being upside down. Ideally, if you were to sell your car, you’d use the money from the sale of the vehicle to pay off the car loan. When you’re upside down, however, the amount you receive from the sale can’t cover the loan amount, which means you may have to take on additional debt or dip into savings in order to pay the balance. This can negatively affect both your credit score and your ability to borrow more.",[547],{"type":79,"attrs":548},{"color":81},{"type":105,"attrs":550,"content":551},{"level":123},[552],{"text":553,"type":76,"marks":554},"You’ll have to pay fees ",[555],{"type":79,"attrs":556},{"color":81},{"type":72,"content":558},[559],{"text":560,"type":76,"marks":561},"Taking out a loan — whether it’s a new loan or a refinance — typically involves paying fees to the lender. These can include application fees, origination fees, or title transfer fees. Unless you have a long loan term, the savings you gain from a reduced interest rate may not be enough to offset the fees you’ll pay to refinance. You may also have to pay prepayment penalties on your current loan, which can eat into your savings, too.",[562],{"type":79,"attrs":563},{"color":81},{"type":105,"attrs":565,"content":566},{"level":107},[567],{"text":568,"type":76,"marks":569},"Can you refinance your loan more than once? ",[570],{"type":79,"attrs":571},{"color":81},{"type":72,"content":573},[574,579,588],{"text":575,"type":76,"marks":576},"Technically, there’s no limit to how many times you can refinance your car loan. Refinancing can impact your credit history, but usually in a net-positive way. When you do a traditional auto refinance, you’ll only incur a small credit penalty — usually no more than ",[577],{"type":79,"attrs":578},{"color":81},{"text":580,"type":76,"marks":581},"a few points at a time",[582,585,587],{"type":188,"attrs":583},{"href":584,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.clearviewfcu.org/Resources/Learn/Blog/Does-Refinancing-Hurt-My-Credit#:~:text=Refinancing%20will%20hurt%20your%20credit,back%20within%20a%20few%20months.",{"type":79,"attrs":586},{"color":91},{"type":196},{"text":589,"type":76,"marks":590},". And if refinancing more than once helps you get out of debt faster, it may ultimately boost your credit score in the long run.",[591],{"type":79,"attrs":592},{"color":91},{"type":72,"content":594},[595],{"text":596,"type":76,"marks":597},"There is an exception to this rule. If you undergo multiple cash-back refinances, you’ll repeatedly increase your total debt. This will have a bigger negative effect on your credit score and could make it harder to apply for new lines of credit in the future. ",[598],{"type":79,"attrs":599},{"color":81},{"type":72,"content":601},[602],{"text":603,"type":76,"marks":604},"Keep in mind that you’ll also be paying fees and/or penalties for each new refinance loan. These charges can add up and eat into your savings. ",[605],{"type":79,"attrs":606},{"color":81},{"type":105,"attrs":608,"content":609},{"level":107},[610],{"text":611,"type":76,"marks":612},"How soon can I refinance my car loan? ",[613],{"type":79,"attrs":614},{"color":81},{"type":72,"content":616},[617,622,631],{"text":618,"type":76,"marks":619},"To complete a car loan refinance, you’ll need proof of ",[620],{"type":79,"attrs":621},{"color":81},{"text":623,"type":76,"marks":624},"transfer of the vehicle title",[625,628,630],{"type":188,"attrs":626},{"href":627,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/how-to-transfer-a-car-title-5116873",{"type":79,"attrs":629},{"color":91},{"type":196},{"text":632,"type":76,"marks":633},". A title typically takes two to three months after you bought the car to transfer to your name. So, if you bought your car within the last two to three months, it may be too early. In this case, you should wait until you receive the title before applying to refinance. ",[634],{"type":79,"attrs":635},{"color":91},{"type":72,"content":637},[638],{"text":639,"type":76,"marks":640},"On top of this, some lenders may require you to have had your current loan for six months or longer before you apply.",[641],{"type":79,"attrs":642},{"color":81},{"type":105,"attrs":644,"content":645},{"level":107},[646],{"text":647,"type":76,"marks":648},"Should I refinance my car?",[649],{"type":79,"attrs":650},{"color":81},{"type":72,"content":652},[653],{"text":654,"type":76,"marks":655},"Consider refinancing your car if:",[656],{"type":79,"attrs":657},{"color":81},{"type":145,"content":659},[660,669,678],{"type":148,"content":661},[662],{"type":72,"content":663},[664],{"text":665,"type":76,"marks":666},"Your financial situation has improved since you took out the original loan, and",[667],{"type":79,"attrs":668},{"color":81},{"type":148,"content":670},[671],{"type":72,"content":672},[673],{"text":674,"type":76,"marks":675},"You know you can get a much better interest rate.",[676],{"type":79,"attrs":677},{"color":91},{"type":148,"content":679},[680],{"type":72,"content":681},[682],{"text":683,"type":76,"marks":684},"You want to lower monthly payments by extending your loan term. ",[685],{"type":79,"attrs":686},{"color":91},{"type":72,"content":688},[689],{"text":690,"type":76,"marks":691},"Refinancing may not be a good idea if: ",[692],{"type":79,"attrs":693},{"color":81},{"type":145,"content":695},[696,705,714],{"type":148,"content":697},[698],{"type":72,"content":699},[700],{"text":701,"type":76,"marks":702},"The value of your car has dropped significantly since you bought it,",[703],{"type":79,"attrs":704},{"color":81},{"type":148,"content":706},[707],{"type":72,"content":708},[709],{"text":710,"type":76,"marks":711},"Your car is more than ten years old and has over 125,000 miles on it, or",[712],{"type":79,"attrs":713},{"color":91},{"type":148,"content":715},[716],{"type":72,"content":717},[718],{"text":719,"type":76,"marks":720},"You have a bad credit score.",[721],{"type":79,"attrs":722},{"color":91},{"type":105,"attrs":724,"content":725},{"level":107},[726],{"text":727,"type":76,"marks":728},"Compare auto loans with Navient Marketplace ",[729],{"type":79,"attrs":730},{"color":81},{"type":72,"content":732},[733,738,746,753],{"text":734,"type":76,"marks":735},"Are you considering an auto loan refinance? Whether your goal is lower monthly loan payments or a lower interest rate, Navient Marketplace can help you find what you’re looking for. Just fill out a few details about you, and in less than a minute, you’ll be automatically matched with offers from top auto loan providers. Then compare, contrast, and choose the best offer for you. Ready to get started on ",[736],{"type":79,"attrs":737},{"color":81},{"text":739,"type":76,"marks":740},"Navient Marketplace",[741,744],{"type":188,"attrs":742},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://marketplace.navient.com/",{"type":79,"attrs":745},{"color":91},{"text":747,"type":76,"marks":748},"2",[749,751],{"type":86,"attrs":750},{"class":88},{"type":79,"attrs":752},{"color":91},{"text":754,"type":76,"marks":755},"? It’s fast and free, and it won’t affect your credit score.",[756],{"type":79,"attrs":757},{"color":91},{"type":72,"content":759},[760],{"text":761,"type":76,"marks":762},"Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.",[763,766],{"type":86,"attrs":764},{"class":765},"footer-text",{"type":79,"attrs":767},{"color":81},{"type":72,"content":769},[770],{"text":771,"type":76,"marks":772},"1 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for total cost of your refinanced loan.",[773,775],{"type":86,"attrs":774},{"class":765},{"type":79,"attrs":776},{"color":81},{"type":72,"content":778},[779],{"text":780,"type":76,"marks":781},"2 Navient customers are invited to consider auto loan refinance offers through our partner Fiona. Navient has not shared your information with Fiona. Auto loan refinance offers are made by participants in Fiona’s lending platform, powered by Engine by MoneyLion. Engine by MoneyLion is the technology platform powering financial services online. Checking your rate will not affect your credit score.",[782,784],{"type":86,"attrs":783},{"class":765},{"type":79,"attrs":785},{"color":81},{"type":72,"content":787},[788],{"text":789,"type":76,"marks":790},"Navient may receive compensation when you click on links associated with this Navient Marketplace. 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Loan","2025-04-07T18:31:24.527Z","2025-12-26T13:45:14.614Z","2025-12-26T13:45:14.644Z",651798201,"411720b5-8dea-4625-b668-9a8dd3efcd0d",{"seo":909,"_uid":913,"body":914,"author":49,"category":888,"featured":45,"component":889,"canonicalTag":1678,"_editable":1679},{"_uid":910,"title":911,"plugin":17,"og_image":18,"og_title":18,"description":912,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"bf8391c8-a1d6-49c0-9c54-9c13406d1d3e","How to Refinance a Car Loan - Navient Marketplace","Refinancing your car loan is a great way to lower your monthly payment or save on interest. Learn how to refinance your auto loan here.","b59dd8e6-e5cd-4dbd-a694-583fc37cfacd",[915,925,1663],{"id":23,"_uid":916,"image":917,"intro":918,"author":27,"classes":919,"category":18,"featured":45,"blogTitle":902,"component":47,"imageLink":923,"blendImage":45,"authorRoute":49,"publishedDate":50,"backgroundColor":51,"_editable":924},"1a8f0184-4f1b-45e6-bc0b-6ed04009a320","//a.storyblok.com/f/110029/1208x800/7ac765e33d/how-to-refinance-a-car-loan.png","Refinancing is one of the best ways to lower your monthly payments or save a significant sum on interest over the life of your loan. Here’s everything you need to know about how to refinance a car loan.",[920],{"_uid":921,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":37,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":922},"7a886503-dbe6-4da1-aa87-fad46d3b115b","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"7a886503-dbe6-4da1-aa87-fad46d3b115b\", \"id\": \"651798201\"}-->","/images/how-to-refinance-a-car-loan.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"1a8f0184-4f1b-45e6-bc0b-6ed04009a320\", \"id\": \"651798201\"}-->",{"_uid":926,"bloks":927,"classes":859,"component":860,"mobileClasses":18,"containerContent":1661,"_editable":1662},"88c16170-c083-4e64-a1da-956adc7092f4",[928],{"_uid":929,"bloks":930,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":1660},"c83f2542-55d3-4852-be66-5fdde31f0cb0",[931,1632],{"lg":60,"md":60,"sm":61,"_uid":932,"cols":61,"bloks":933,"alignSelf":802,"component":803,"_editable":1631},"89786153-3aa6-4b22-8ac3-7ba827936ae5",[934],{"_uid":935,"color":66,"classes":67,"content":18,"richText":936,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":1627,"_editable":1630},"852fe052-f0af-4960-a9b8-7e828aab0ac8",{"type":69,"content":937},[938,955,962,970,977,985,992,999,1007,1014,1021,1028,1035,1067,1075,1082,1089,1097,1118,1125,1133,1161,1168,1175,1234,1242,1249,1270,1277,1298,1344,1351,1359,1366,1445,1452,1460,1467,1474,1482,1489,1497,1526,1534,1572,1579,1603,1611,1619],{"type":72,"content":939},[940,945,951],{"text":941,"type":76,"marks":942},"An auto loan refinance is when you replace your current car loan with a new loan that has a lower interest rate and/or a different loan term. Refinancing is one of the best ways to lower your monthly payments or save a significant sum on interest over the life of your loan",[943],{"type":79,"attrs":944},{"color":81},{"text":83,"type":76,"marks":946},[947,949],{"type":86,"attrs":948},{"class":88},{"type":79,"attrs":950},{"color":91},{"text":198,"type":76,"marks":952},[953],{"type":79,"attrs":954},{"color":91},{"type":72,"content":956},[957],{"text":958,"type":76,"marks":959},"If you’re struggling with your monthly payments, hoping to save money in interest, or even just interested in switching loan servicers, refinancing could be right for you. Here’s everything you need to know about how to refinance a car loan.",[960],{"type":79,"attrs":961},{"color":81},{"type":105,"attrs":963,"content":964},{"level":107},[965],{"text":966,"type":76,"marks":967},"Determine if a car loan refinance is right for you",[968],{"type":79,"attrs":969},{"color":81},{"type":72,"content":971},[972],{"text":973,"type":76,"marks":974},"Refinancing is ideal for two types of people: those whose financial situation has improved in recent years, and those whose personal finances leave them unable to afford loan payments. ",[975],{"type":79,"attrs":976},{"color":81},{"type":105,"attrs":978,"content":979},{"level":123},[980],{"text":981,"type":76,"marks":982},"If your financial situation has improved ",[983],{"type":79,"attrs":984},{"color":81},{"type":72,"content":986},[987],{"text":988,"type":76,"marks":989},"If your income or credit score is higher now than it was when you first took out your car loan, refinancing could help you unlock lower rates. Since loan offers are made based on a client’s credit history, your improved financial situation might make you eligible for lower interest rates than you were approved for originally. ",[990],{"type":79,"attrs":991},{"color":81},{"type":72,"content":993},[994],{"text":995,"type":76,"marks":996},"You can also use refinancing to shorten your loan term. This can help you to pay off your debt sooner. Shortening your loan term is one of the best ways to reduce the total amount of interest you pay — which could save you thousands of dollars over the life of the loan. ",[997],{"type":79,"attrs":998},{"color":81},{"type":105,"attrs":1000,"content":1001},{"level":123},[1002],{"text":1003,"type":76,"marks":1004},"If you can’t afford current loan payments ",[1005],{"type":79,"attrs":1006},{"color":81},{"type":72,"content":1008},[1009],{"text":1010,"type":76,"marks":1011},"If you’re struggling financially, refinancing can help you lower your monthly payments to an affordable level. If you refinance your car loan for a longer term, that will spread out your repayments across a longer period of time. As a result, each monthly payment will be lower.",[1012],{"type":79,"attrs":1013},{"color":81},{"type":72,"content":1015},[1016],{"text":1017,"type":76,"marks":1018},"Lower monthly payments can reduce your financial stress and make it less likely that you’ll miss a payment, which can damage your credit score. It can also free up some breathing room in your budget so you can cover other monthly expenses more easily. ",[1019],{"type":79,"attrs":1020},{"color":81},{"type":72,"content":1022},[1023],{"text":1024,"type":76,"marks":1025},"One disclaimer: when you refinance for a longer term, you will pay more in interest over the life of the loan. For example, if you take out a $20,000 loan with a 6% APR and a term of 10 years, you’ll end up paying about $222 per month. Over the span of 10 years, you would pay about $6,600 in interest. ",[1026],{"type":79,"attrs":1027},{"color":81},{"type":72,"content":1029},[1030],{"text":1031,"type":76,"marks":1032},"But if you extend that loan term from 10 to 20 years at the same APR, you would pay only $143 per month. That may sound appealing at first. However, over the life of the loan, you would pay about $14,400 in interest. ",[1033],{"type":79,"attrs":1034},{"color":81},{"type":72,"content":1036},[1037,1042,1049,1057,1062],{"text":1038,"type":76,"marks":1039},"You can see how these numbers check out for your personal financial situation by using an",[1040],{"type":79,"attrs":1041},{"color":81},{"text":1043,"type":76,"marks":1044}," ",[1045,1047],{"type":188,"attrs":1046},{"href":293,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":1048},{"color":91},{"text":1050,"type":76,"marks":1051},"auto loan refinance calculator.",[1052,1054,1056],{"type":188,"attrs":1053},{"href":293,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":1055},{"color":91},{"type":196},{"text":1043,"type":76,"marks":1058},[1059,1060],{"type":820},{"type":79,"attrs":1061},{"color":91},{"text":1063,"type":76,"marks":1064},"If you’ve decided to move forward with an auto loan refinance, here are the basic steps to follow. ",[1065],{"type":79,"attrs":1066},{"color":91},{"type":105,"attrs":1068,"content":1069},{"level":123},[1070],{"text":1071,"type":76,"marks":1072},"1. Review your current auto loan ",[1073],{"type":79,"attrs":1074},{"color":81},{"type":72,"content":1076},[1077],{"text":1078,"type":76,"marks":1079},"Your first step is to look at your current loan. How much do you have left to repay? What are the repayment terms? Most banks and credit unions require you to have a minimum loan amount before they’ll issue a new auto loan refinance. So, if your current loan balance doesn’t reach that minimum threshold, you may not be eligible for a refinance at this time. If you don’t meet one lender’s requirements, keep shopping around. There may be another lender out there who will cater to your specific situation.",[1080],{"type":79,"attrs":1081},{"color":81},{"type":72,"content":1083},[1084],{"text":1085,"type":76,"marks":1086},"Before you move forward with your refinance, you’ll also want to check whether or not your current lender charges prepayment penalties for paying off your loan early. Though they’re not common, these fees can be a nasty surprise if you refinance and find yourself with an additional bill. ",[1087],{"type":79,"attrs":1088},{"color":81},{"type":105,"attrs":1090,"content":1091},{"level":123},[1092],{"text":1093,"type":76,"marks":1094},"2. Review your vehicle details",[1095],{"type":79,"attrs":1096},{"color":81},{"type":72,"content":1098},[1099,1104,1113],{"text":1100,"type":76,"marks":1101},"Your eligibility for a refinance will depend in part on the type of car you have. Many lenders place restrictions on the mileage, age, and type of vehicles they’ll complete a refinance for. If your car is more than 10 years old or has more than 125,000 miles on it, you may have a hard time ",[1102],{"type":79,"attrs":1103},{"color":81},{"text":1105,"type":76,"marks":1106},"getting approved for a new loan",[1107,1110,1112],{"type":188,"attrs":1108},{"href":1109,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/article/loans/auto-loans/requirements-refinance-car",{"type":79,"attrs":1111},{"color":91},{"type":196},{"text":1114,"type":76,"marks":1115},". ",[1116],{"type":79,"attrs":1117},{"color":91},{"type":72,"content":1119},[1120],{"text":1121,"type":76,"marks":1122},"The condition and value of your car matter, too. If your vehicle has sustained damage and has been written off by your insurance company as a complete loss — but it’s still driving — it may be ineligible for a refinance. Additionally, some lenders won’t refinance commercial vehicles or large-engine trucks. ",[1123],{"type":79,"attrs":1124},{"color":81},{"type":105,"attrs":1126,"content":1127},{"level":123},[1128],{"text":1129,"type":76,"marks":1130},"3. Check your credit score ",[1131],{"type":79,"attrs":1132},{"color":81},{"type":72,"content":1134},[1135,1140,1147,1156],{"text":1136,"type":76,"marks":1137},"Next, check your credit score against the lender's list of requirements. This will save you time and give you a better sense of what lenders are looking for in terms of creditworthiness. You’re entitled to a free annual credit report from each of the three major credit bureaus: Equifax, Experian, and TransUnion. You can go to",[1138],{"type":79,"attrs":1139},{"color":81},{"text":1043,"type":76,"marks":1141},[1142,1145],{"type":188,"attrs":1143},{"href":1144,"uuid":91,"anchor":91,"target":91,"linktype":192},"http://annualcreditreport.com",{"type":79,"attrs":1146},{"color":91},{"text":1148,"type":76,"marks":1149},"AnnualCreditReport.com",[1150,1153,1155],{"type":188,"attrs":1151},{"href":1152,"uuid":91,"anchor":91,"target":191,"linktype":192},"http://AnnualCreditReport.com",{"type":79,"attrs":1154},{"color":91},{"type":196},{"text":1157,"type":76,"marks":1158}," to redeem your free reports.",[1159],{"type":79,"attrs":1160},{"color":91},{"type":72,"content":1162},[1163],{"text":1164,"type":76,"marks":1165},"Keep in mind that the credit scores you see on these reports may be slightly different from the scores your new lender might be looking at. TransUnion credit scoring is based on the VantageScore ® 3.0 model, while Equifax and Experian use their own models.",[1166],{"type":79,"attrs":1167},{"color":81},{"type":72,"content":1169},[1170],{"text":1171,"type":76,"marks":1172},"Here are some of the popular scoring models among refinancing lenders: ",[1173],{"type":79,"attrs":1174},{"color":81},{"type":145,"content":1176},[1177,1196,1215],{"type":148,"content":1178},[1179],{"type":72,"content":1180},[1181,1191],{"text":1182,"type":76,"marks":1183},"FICO® Score☉ 8 and 9:",[1184,1187,1188,1190],{"type":188,"attrs":1185},{"href":1186,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.myfico.com/credit-education/credit-scores/fico-score-versions",{"type":820},{"type":79,"attrs":1189},{"color":81},{"type":196},{"text":1192,"type":76,"marks":1193}," Auto lenders use these scores as a baseline, though they aren’t exclusive to this industry.",[1194],{"type":79,"attrs":1195},{"color":91},{"type":148,"content":1197},[1198],{"type":72,"content":1199},[1200,1210],{"text":1201,"type":76,"marks":1202},"FICO® Auto Scores:",[1203,1206,1207,1209],{"type":188,"attrs":1204},{"href":1205,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fico.com/en/latest-thinking/solution-sheet/fico-auto-score-10",{"type":820},{"type":79,"attrs":1208},{"color":91},{"type":196},{"text":1211,"type":76,"marks":1212}," These are industry-specific scores and are based on several criteria, including your prior history of taking out and paying off auto loans.",[1213],{"type":79,"attrs":1214},{"color":91},{"type":148,"content":1216},[1217],{"type":72,"content":1218},[1219,1229],{"text":1220,"type":76,"marks":1221},"VantageScore® 3.0 and 4.0:",[1222,1225,1226,1228],{"type":188,"attrs":1223},{"href":1224,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://vantagescore.com/lenders/why-vantagescore/our-models/",{"type":820},{"type":79,"attrs":1227},{"color":91},{"type":196},{"text":1230,"type":76,"marks":1231}," These credit scoring models are popular among auto lenders and are becoming more common in the overall lending market, as well. ",[1232],{"type":79,"attrs":1233},{"color":91},{"type":105,"attrs":1235,"content":1236},{"level":123},[1237],{"text":1238,"type":76,"marks":1239},"4. Get prequalified ",[1240],{"type":79,"attrs":1241},{"color":81},{"type":72,"content":1243},[1244],{"text":1245,"type":76,"marks":1246},"When you’re ready to refinance your car loan, consider getting prequalified online instead of filling out a full application immediately. Prequalification is a process during which a lender takes a cursory look at your credit. The lender then grants you a kind of tentative approval for a new loan that’s contingent upon the deeper credit check they’ll conduct during your final application. Getting prequalified by multiple lenders is a good way to get a sense of your available options. ",[1247],{"type":79,"attrs":1248},{"color":81},{"type":72,"content":1250},[1251,1256,1265],{"text":1252,"type":76,"marks":1253},"When you prequalify for a loan, the lender conducts a “",[1254],{"type":79,"attrs":1255},{"color":81},{"text":1257,"type":76,"marks":1258},"soft credit inquiry",[1259,1262,1264],{"type":188,"attrs":1260},{"href":1261,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.earnest.com/blog/soft-vs-hard-credit-inquiries/",{"type":79,"attrs":1263},{"color":91},{"type":196},{"text":1266,"type":76,"marks":1267},".” Soft inquiries will only show up on your credit report in certain cases and never affect your credit score. ",[1268],{"type":79,"attrs":1269},{"color":91},{"type":72,"content":1271},[1272],{"text":1273,"type":76,"marks":1274},"Once you actually apply for a loan, however, the lender will conduct a hard inquiry. This kind of credit check signals the credit bureau that you’re seriously looking into opening or extending a line of credit. Hard inquiries can negatively impact your credit score. ",[1275],{"type":79,"attrs":1276},{"color":81},{"type":72,"content":1278},[1279,1284,1293],{"text":1280,"type":76,"marks":1281},"The exception to this rule is ",[1282],{"type":79,"attrs":1283},{"color":81},{"text":1285,"type":76,"marks":1286},"rate shopping",[1287,1290,1292],{"type":188,"attrs":1288},{"href":1289,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.equifax.com/personal/help/credit-scores-inquiries/",{"type":79,"attrs":1291},{"color":91},{"type":196},{"text":1294,"type":76,"marks":1295},". When borrowers research many lenders within a short window of time, credit bureaus consider this financially responsible behavior, and they won’t penalize you. Here’s how different credit scoring models incentivize rate shopping: ",[1296],{"type":79,"attrs":1297},{"color":91},{"type":145,"content":1299},[1300,1329],{"type":148,"content":1301},[1302],{"type":72,"content":1303},[1304,1310,1315,1324],{"text":1305,"type":76,"marks":1306},"FICO: ",[1307,1308],{"type":820},{"type":79,"attrs":1309},{"color":81},{"text":1311,"type":76,"marks":1312},"Most modern FICO scoring models allow a ",[1313],{"type":79,"attrs":1314},{"color":91},{"text":1316,"type":76,"marks":1317},"45-day safe harbor period",[1318,1321,1323],{"type":188,"attrs":1319},{"href":1320,"uuid":91,"anchor":91,"target":91,"linktype":192},"https://www.myfico.com/credit-education/credit-reports/credit-checks-and-inquiries",{"type":79,"attrs":1322},{"color":91},{"type":196},{"text":1325,"type":76,"marks":1326},". During this time, FICO counts all new credit checks as one single hard inquiry. As long as you do all your rate shopping within this period, you will only see one hit to your credit report rather than several.",[1327],{"type":79,"attrs":1328},{"color":91},{"type":148,"content":1330},[1331],{"type":72,"content":1332},[1333,1339],{"text":1334,"type":76,"marks":1335},"VantageScore: ",[1336,1337],{"type":820},{"type":79,"attrs":1338},{"color":91},{"text":1340,"type":76,"marks":1341},"VantageScore treats all inquiries within the safe harbor period as one hard inquiry, the only difference being that the limit here is 14 days instead of 45. ",[1342],{"type":79,"attrs":1343},{"color":91},{"type":72,"content":1345},[1346],{"text":1347,"type":76,"marks":1348},"In sum: If you want to prevent undue damage to your credit while you’re checking out your refinance options, do all your research within a two-week period, just to be safe. ",[1349],{"type":79,"attrs":1350},{"color":81},{"type":105,"attrs":1352,"content":1353},{"level":123},[1354],{"text":1355,"type":76,"marks":1356},"5. Apply for the refinance loan ",[1357],{"type":79,"attrs":1358},{"color":81},{"type":72,"content":1360},[1361],{"text":1362,"type":76,"marks":1363},"Once you’ve picked a lender, you’ll need to submit a loan application in person or online. Usually that requires you to show the following: ",[1364],{"type":79,"attrs":1365},{"color":81},{"type":145,"content":1367},[1368,1377,1386,1395,1404,1413,1422],{"type":148,"content":1369},[1370],{"type":72,"content":1371},[1372],{"text":1373,"type":76,"marks":1374},"Some form of ID like a driver’s license or social security number",[1375],{"type":79,"attrs":1376},{"color":81},{"type":148,"content":1378},[1379],{"type":72,"content":1380},[1381],{"text":1382,"type":76,"marks":1383},"Proof of income, like W-2s or pay stubs ",[1384],{"type":79,"attrs":1385},{"color":91},{"type":148,"content":1387},[1388],{"type":72,"content":1389},[1390],{"text":1391,"type":76,"marks":1392},"Proof of insurance, like a recent monthly statement ",[1393],{"type":79,"attrs":1394},{"color":91},{"type":148,"content":1396},[1397],{"type":72,"content":1398},[1399],{"text":1400,"type":76,"marks":1401},"Proof of your residence, like a lease agreement, mortgage statement, or utility bill",[1402],{"type":79,"attrs":1403},{"color":91},{"type":148,"content":1405},[1406],{"type":72,"content":1407},[1408],{"text":1409,"type":76,"marks":1410},"Vehicle registration and vehicle identification number",[1411],{"type":79,"attrs":1412},{"color":91},{"type":148,"content":1414},[1415],{"type":72,"content":1416},[1417],{"text":1418,"type":76,"marks":1419},"Copy of your driver’s license ",[1420],{"type":79,"attrs":1421},{"color":91},{"type":148,"content":1423},[1424],{"type":72,"content":1425},[1426,1431,1440],{"text":1427,"type":76,"marks":1428},"Your ",[1429],{"type":79,"attrs":1430},{"color":91},{"text":1432,"type":76,"marks":1433},"10-day payoff statement",[1434,1437,1439],{"type":188,"attrs":1435},{"href":1436,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.earnest.com/blog/10-day-payoff-student-loans/",{"type":79,"attrs":1438},{"color":91},{"type":196},{"text":1441,"type":76,"marks":1442}," and payoff amount",[1443],{"type":79,"attrs":1444},{"color":91},{"type":72,"content":1446},[1447],{"text":1448,"type":76,"marks":1449},"Gather these documents before you apply to make the process go even more smoothly. If you’re approved for an auto refinance loan, you’ll get a legal document explaining your new car loan terms. This document will contain all the important details of your loan, including your minimum monthly payment, when your car payments are due, and how you can make those payments.",[1450],{"type":79,"attrs":1451},{"color":81},{"type":105,"attrs":1453,"content":1454},{"level":123},[1455],{"text":1456,"type":76,"marks":1457},"6. Keep making payments until your loan is paid off",[1458],{"type":79,"attrs":1459},{"color":81},{"type":72,"content":1461},[1462],{"text":1463,"type":76,"marks":1464},"What happens next depends on your financial institution. Usually, your refinance lender will pay off your original loan for you with the details you provided in your 10-day payoff statement –– but, it’s important to confirm. Ask your lender how the process will work: who the loan is disbursed to, who is paying the current car loan off, and what your responsibilities are now that you’ve been approved. ",[1465],{"type":79,"attrs":1466},{"color":81},{"type":72,"content":1468},[1469],{"text":1470,"type":76,"marks":1471},"At the very least, you’ll need to continue making payments on your existing loan until it’s paid off by your lender. If you don’t, you could be left with a residual balance on your old loan even after the new lender pays it off. Depending on the annual percentage rate, that residual loan balance could grow into a significant sum as you miss payments, and your credit score will suffer in the process.",[1472],{"type":79,"attrs":1473},{"color":81},{"type":105,"attrs":1475,"content":1476},{"level":107},[1477],{"text":1478,"type":76,"marks":1479},"Is a car loan refinance right for me?",[1480],{"type":79,"attrs":1481},{"color":81},{"type":72,"content":1483},[1484],{"text":1485,"type":76,"marks":1486},"There are many factors you’ll need to consider before deciding whether or not to refinance your car loan. ",[1487],{"type":79,"attrs":1488},{"color":81},{"type":72,"content":1490},[1491],{"text":1492,"type":76,"marks":1493},"Auto loan refinancing may be ideal for you if: ",[1494,1495],{"type":820},{"type":79,"attrs":1496},{"color":81},{"type":145,"content":1498},[1499,1508,1517],{"type":148,"content":1500},[1501],{"type":72,"content":1502},[1503],{"text":1504,"type":76,"marks":1505},"Your financial standing has improved and you can leverage your new, higher credit score to get a better interest rate. ",[1506],{"type":79,"attrs":1507},{"color":81},{"type":148,"content":1509},[1510],{"type":72,"content":1511},[1512],{"text":1513,"type":76,"marks":1514},"Average auto loan rates have gone down and you think refinancing could help you secure one of these lower rates.",[1515],{"type":79,"attrs":1516},{"color":91},{"type":148,"content":1518},[1519],{"type":72,"content":1520},[1521],{"text":1522,"type":76,"marks":1523},"You have positive equity in your car (i.e., your car’s value is worth more than the total amount remaining on your loan balance.)",[1524],{"type":79,"attrs":1525},{"color":91},{"type":72,"content":1527},[1528],{"text":1529,"type":76,"marks":1530},"Auto loan refinancing may not be ideal for you if: ",[1531,1532],{"type":820},{"type":79,"attrs":1533},{"color":81},{"type":145,"content":1535},[1536,1545,1554,1563],{"type":148,"content":1537},[1538],{"type":72,"content":1539},[1540],{"text":1541,"type":76,"marks":1542},"Your income is unpredictable.",[1543],{"type":79,"attrs":1544},{"color":81},{"type":148,"content":1546},[1547],{"type":72,"content":1548},[1549],{"text":1550,"type":76,"marks":1551},"Average auto loan rates have gone up in recent years, in which case you could end up saddled with a higher interest rate.",[1552],{"type":79,"attrs":1553},{"color":91},{"type":148,"content":1555},[1556],{"type":72,"content":1557},[1558],{"text":1559,"type":76,"marks":1560},"Your car is more than 10 years old and/or has more than 125,000 miles on it. ",[1561],{"type":79,"attrs":1562},{"color":91},{"type":148,"content":1564},[1565],{"type":72,"content":1566},[1567],{"text":1568,"type":76,"marks":1569},"There’s little time remaining on your loan, in which case refinancing fees may eat up the amount you save on interest. ",[1570],{"type":79,"attrs":1571},{"color":91},{"type":105,"attrs":1573,"content":1574},{"level":107},[1575],{"text":727,"type":76,"marks":1576},[1577],{"type":79,"attrs":1578},{"color":81},{"type":72,"content":1580},[1581,1586,1593,1598],{"text":1582,"type":76,"marks":1583},"Whether you’re looking for lower interest rates or longer terms, ",[1584],{"type":79,"attrs":1585},{"color":81},{"text":739,"type":76,"marks":1587},[1588,1590,1592],{"type":188,"attrs":1589},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":1591},{"color":91},{"type":196},{"text":1594,"type":76,"marks":1595}," can help you find an auto loan refinance provider that’s right for you. In less than a minute, you can fill in a few details about your car and your financial goals, and we’ll automatically match you with refinance lenders who fit your needs. Then, you can use our platform to browse the available options, compare offers, and choose the perfect provider for you.",[1596],{"type":79,"attrs":1597},{"color":91},{"type":1599,"marks":1600},"hard_break",[1601],{"type":79,"attrs":1602},{"color":81},{"type":72,"content":1604},[1605],{"text":761,"type":76,"marks":1606},[1607,1609],{"type":86,"attrs":1608},{"class":765},{"type":79,"attrs":1610},{"color":81},{"type":72,"content":1612},[1613],{"text":789,"type":76,"marks":1614},[1615,1617],{"type":86,"attrs":1616},{"class":765},{"type":79,"attrs":1618},{"color":81},{"type":72,"content":1620},[1621],{"text":771,"type":76,"marks":1622},[1623,1625],{"type":86,"attrs":1624},{"class":765},{"type":79,"attrs":1626},{"color":91},{"type":69,"content":1628},[1629],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"852fe052-f0af-4960-a9b8-7e828aab0ac8\", \"id\": \"651798201\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": 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Account","2025-04-07T18:31:32.550Z","2025-12-26T13:45:15.116Z","2025-12-26T13:45:15.150Z",651798206,"46456cc2-f3d5-4c99-acc3-4c3c82644c0a",{"seo":1695,"_uid":1699,"body":1700,"author":1711,"category":2453,"featured":45,"component":889,"canonicalTag":2454,"_editable":2455},{"_uid":1696,"title":1697,"plugin":17,"og_image":18,"og_title":18,"description":1698,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"6e279110-4da0-48c0-8e96-3269c04f3ee5","How to Open a High-Yield Savings Account - Navient Marketplace","How to open a high-yield savings account in seven easy steps. Learn fees, terms, pros and cons & alternatives. Get the guide from start to finish.","24614723-3c23-4d4f-990b-c49a1b45edce",[1701,1713,2438],{"id":23,"_uid":1702,"image":1703,"intro":1704,"author":1705,"classes":1706,"category":18,"featured":45,"blogTitle":1688,"component":47,"imageLink":1710,"blendImage":45,"authorRoute":1711,"publishedDate":50,"backgroundColor":51,"_editable":1712},"79f5a035-fc41-41ad-92c1-be998deab658","//a.storyblok.com/f/110029/4096x2734/570c1496ba/how-to-open-a-high-yield-savings-account.svg","Here’s what you need to know, and how to open a high-yield savings account.","Curt Kirby",[1707],{"_uid":1708,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":37,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":1709},"5d8a3dfe-c0c7-415b-8e3d-2676a4998763","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"5d8a3dfe-c0c7-415b-8e3d-2676a4998763\", \"id\": \"651798206\"}-->","/images/how-to-open-a-high-yield-savings-account.png","curt-kirby","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"79f5a035-fc41-41ad-92c1-be998deab658\", \"id\": \"651798206\"}-->",{"_uid":1714,"bloks":1715,"classes":859,"component":860,"mobileClasses":18,"containerContent":2436,"_editable":2437},"a524f7f9-d117-4e66-ad66-48bdef990dc1",[1716],{"_uid":1717,"bloks":1718,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":2435},"17e2f2ba-9fb3-4bb6-a5c2-63670f0193ce",[1719,2407],{"lg":60,"md":60,"sm":61,"_uid":1720,"cols":61,"bloks":1721,"alignSelf":802,"component":803,"_editable":2406},"fb1f586b-34d2-4553-84a6-1c536ab78608",[1722],{"_uid":1723,"color":66,"classes":67,"content":18,"richText":1724,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":2402,"_editable":2405},"bbe4297a-be79-46dd-9df2-7033f885ffea",{"type":69,"content":1725},[1726,1734,1741,1762,1771,1791,1812,1821,1830,1837,1847,1868,1877,1898,1907,1914,1923,1943,1952,1973,2002,2011,2018,2027,2047,2056,2063,2072,2079,2088,2095,2104,2196,2205,2290,2299,2308,2315,2322,2331,2338,2345,2354,2361,2380,2388],{"type":72,"content":1727},[1728],{"text":789,"type":76,"marks":1729},[1730,1732],{"type":86,"attrs":1731},{"class":765},{"type":79,"attrs":1733},{"color":81},{"type":72,"content":1735},[1736],{"text":1737,"type":76,"marks":1738},"With economists muttering about a recession and the stock market fluctuating wildly, it can be tempting to stick your savings under a mattress and wait for all to be over. But putting your money in a traditional savings account won’t actually prevent losses: because interest rates on those accounts are so low, your money won’t grow nearly enough to keep up with inflation. That means your hard-earned cash will slowly lose its value. The better way to protect your money is to put it to work. That’s where a high-yield savings account can help. ",[1739],{"type":79,"attrs":1740},{"color":81},{"type":72,"content":1742},[1743,1748,1757],{"text":1744,"type":76,"marks":1745},"Over the past few years, ",[1746],{"type":79,"attrs":1747},{"color":81},{"text":1749,"type":76,"marks":1750},"annual percentage yield",[1751,1754,1756],{"type":188,"attrs":1752},{"href":1753,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/terms/a/apy.asp",{"type":79,"attrs":1755},{"color":91},{"type":196},{"text":1758,"type":76,"marks":1759}," (APY) rates on high-yield savings accounts have consistently risen, making now a great time to take advantage. A high-yield savings account is a type of deposit account that gives you easy access to your funds — while still letting you grow your savings at rates well above the national average. Here’s what you need to know, and how to open a high-yield savings account.",[1760],{"type":79,"attrs":1761},{"color":91},{"type":105,"attrs":1763,"content":1764},{"level":107},[1765],{"text":1766,"type":76,"marks":1767},"What is a high-yield savings account? ",[1768,1769],{"type":820},{"type":79,"attrs":1770},{"color":81},{"type":72,"content":1772},[1773,1778,1787],{"text":1774,"type":76,"marks":1775},"A high-yield savings account is similar to a traditional savings account, except it pays more in interest on the money deposited. Where a traditional savings account might pay a fraction of a percentage point in interest, current interest rates for top high-yield savings accounts ",[1776],{"type":79,"attrs":1777},{"color":81},{"text":1779,"type":76,"marks":1780},"are over 4.0%",[1781,1784,1786],{"type":188,"attrs":1782},{"href":1783,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.cnbc.com/select/best-high-yield-savings-accounts/",{"type":79,"attrs":1785},{"color":91},{"type":196},{"text":1114,"type":76,"marks":1788},[1789],{"type":79,"attrs":1790},{"color":91},{"type":72,"content":1792},[1793,1798,1807],{"text":1794,"type":76,"marks":1795},"This is ",[1796],{"type":79,"attrs":1797},{"color":81},{"text":1799,"type":76,"marks":1800},"compound interest",[1801,1804,1806],{"type":188,"attrs":1802},{"href":1803,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://money.usnews.com/investing/term/compound-interest",{"type":79,"attrs":1805},{"color":91},{"type":196},{"text":1808,"type":76,"marks":1809},", which means your interest is added to your account balance, and the next interest calculation is made on the full amount. Compound interest is among the best ways to grow your money fast. In addition to having higher interest rates, high-yield accounts are also flexible, accessible, and low-risk. ",[1810],{"type":79,"attrs":1811},{"color":91},{"type":105,"attrs":1813,"content":1814},{"level":107},[1815],{"text":1816,"type":76,"marks":1817},"How to open a high-yield savings account",[1818,1819],{"type":820},{"type":79,"attrs":1820},{"color":81},{"type":105,"attrs":1822,"content":1823},{"level":123},[1824],{"text":1825,"type":76,"marks":1826},"1. Compare the APY and features of different accounts",[1827,1828],{"type":820},{"type":79,"attrs":1829},{"color":81},{"type":72,"content":1831},[1832],{"text":1833,"type":76,"marks":1834},"Your first step is to shop around and get a feel for what your options are. Here are a few of the most important things to consider when choosing a high-yield savings account. ",[1835],{"type":79,"attrs":1836},{"color":81},{"type":105,"attrs":1838,"content":1840},{"level":1839},4,[1841],{"text":1842,"type":76,"marks":1843},"APY",[1844,1845],{"type":820},{"type":79,"attrs":1846},{"color":81},{"type":72,"content":1848},[1849,1854,1863],{"text":1850,"type":76,"marks":1851},"APY, or annual percentage yield, is a measure of the money you’ll make in interest each year. The APY on a high-yield savings account typically ranges from 1.0 to 4.5%, and is currently ",[1852],{"type":79,"attrs":1853},{"color":81},{"text":1855,"type":76,"marks":1856},"capped at about 5.0%",[1857,1860,1862],{"type":188,"attrs":1858},{"href":1859,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fdic.gov/resources/bankers/national-rates/index.html#footnote",{"type":79,"attrs":1861},{"color":91},{"type":196},{"text":1864,"type":76,"marks":1865},". (Note that the best rates can be up to 20 to 25 times higher than the national average for standard savings accounts.)",[1866],{"type":79,"attrs":1867},{"color":91},{"type":105,"attrs":1869,"content":1870},{"level":1839},[1871],{"text":1872,"type":76,"marks":1873},"Fees",[1874,1875],{"type":820},{"type":79,"attrs":1876},{"color":81},{"type":72,"content":1878},[1879,1884,1893],{"text":1880,"type":76,"marks":1881},"You should also make note of each financial institution’s fee schedule, which you can often find on their FAQs page and in specific account disclosures. Many banks charge overdraft fees, ATM fees, and fees for closing your account within the first 180 days. You may also face penalties for making more than ",[1882],{"type":79,"attrs":1883},{"color":81},{"text":1885,"type":76,"marks":1886},"six withdrawals per month",[1887,1890,1892],{"type":188,"attrs":1888},{"href":1889,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/articles/pf/09/high-yield-savings-account.asp",{"type":79,"attrs":1891},{"color":91},{"type":196},{"text":1894,"type":76,"marks":1895},". (This is the withdrawal limit on high-yield savings accounts as mandated by federal law.) Many accounts also charge a monthly service fee or monthly maintenance fee just to keep them open. ",[1896],{"type":79,"attrs":1897},{"color":91},{"type":105,"attrs":1899,"content":1900},{"level":1839},[1901],{"text":1902,"type":76,"marks":1903},"Minimum balance requirements",[1904,1905],{"type":820},{"type":79,"attrs":1906},{"color":81},{"type":72,"content":1908},[1909],{"text":1910,"type":76,"marks":1911},"In addition to fees, some banks have minimum deposit requirements. You may need to make a minimum opening deposit to kick things off, and/or maintain a certain account balance to avoid penalties. Of course, not all banks have these kinds of requirements. If you don’t have a ton of extra cash on hand, you may want to look for a high-yield account without any minimums. ",[1912],{"type":79,"attrs":1913},{"color":81},{"type":105,"attrs":1915,"content":1916},{"level":1839},[1917],{"text":1918,"type":76,"marks":1919},"Access to funds",[1920,1921],{"type":820},{"type":79,"attrs":1922},{"color":81},{"type":72,"content":1924},[1925,1930,1934,1938],{"text":1926,"type":76,"marks":1927},"Finally, you should consider how you’d prefer to access your funds. While high-interest savings accounts rarely come with check-writing or debit card capabilities, some banks do provide an ATM card that you can use to withdraw cash. Others only allow ACH or wire transfers. ",[1928],{"type":79,"attrs":1929},{"color":81},{"type":1599,"marks":1931},[1932],{"type":79,"attrs":1933},{"color":91},{"type":1599,"marks":1935},[1936],{"type":79,"attrs":1937},{"color":91},{"text":1939,"type":76,"marks":1940},"Deposit options also vary by account. Many only allow check deposits to be made by mail, and permit only transfers or direct deposits. Other institutions, like Ally Bank and UFB Direct (a division of Axos Bank) permit mobile check deposits via an app. ",[1941],{"type":79,"attrs":1942},{"color":91},{"type":105,"attrs":1944,"content":1945},{"level":123},[1946],{"text":1947,"type":76,"marks":1948},"2. Prepare your personal information ",[1949,1950],{"type":820},{"type":79,"attrs":1951},{"color":81},{"type":72,"content":1953},[1954,1959,1968],{"text":1955,"type":76,"marks":1956},"When you’ve chosen the best high-yield savings account for your needs, the next step is to gather your ",[1957],{"type":79,"attrs":1958},{"color":81},{"text":1960,"type":76,"marks":1961},"personal information",[1962,1965,1967],{"type":188,"attrs":1963},{"href":1964,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.businessinsider.com/personal-finance/how-to-open-high-yield-savings-account-online-save-money",{"type":79,"attrs":1966},{"color":91},{"type":196},{"text":1969,"type":76,"marks":1970}," and begin the account opening process. You’ll likely need:",[1971],{"type":79,"attrs":1972},{"color":91},{"type":145,"content":1974},[1975,1984,1993],{"type":148,"content":1976},[1977],{"type":72,"content":1978},[1979],{"text":1980,"type":76,"marks":1981},"A form of identification, such as a driver's license.",[1982],{"type":79,"attrs":1983},{"color":81},{"type":148,"content":1985},[1986],{"type":72,"content":1987},[1988],{"text":1989,"type":76,"marks":1990},"Proof of your physical address. ",[1991],{"type":79,"attrs":1992},{"color":91},{"type":148,"content":1994},[1995],{"type":72,"content":1996},[1997],{"text":1998,"type":76,"marks":1999},"Your social security number or Individual Taxpayer Identification number (ITIN).",[2000],{"type":79,"attrs":2001},{"color":91},{"type":105,"attrs":2003,"content":2004},{"level":123},[2005],{"text":2006,"type":76,"marks":2007},"3. Submit your application ",[2008,2009],{"type":820},{"type":79,"attrs":2010},{"color":81},{"type":72,"content":2012},[2013],{"text":2014,"type":76,"marks":2015},"Most big national banks provide streamlined applications that take just 10 minutes to fill out. If you’re working with a brick-and-mortar bank, you may need to make an in-person appointment to complete your application. If you’re using an online lender, you can almost always complete the entire thing online. ",[2016],{"type":79,"attrs":2017},{"color":81},{"type":105,"attrs":2019,"content":2020},{"level":123},[2021],{"text":2022,"type":76,"marks":2023},"4. Make your initial deposit ",[2024,2025],{"type":820},{"type":79,"attrs":2026},{"color":81},{"type":72,"content":2028},[2029,2034,2038,2042],{"text":2030,"type":76,"marks":2031},"Once your application is submitted and your identity is confirmed, you’ll be able to add money to your account. Usually, the easiest way to do this is to link your new account to an existing account and transfer funds. ",[2032],{"type":79,"attrs":2033},{"color":81},{"type":1599,"marks":2035},[2036],{"type":79,"attrs":2037},{"color":91},{"type":1599,"marks":2039},[2040],{"type":79,"attrs":2041},{"color":91},{"text":2043,"type":76,"marks":2044},"Some financial institutions will also let you mail a check or use a credit card to make this initial deposit (though using a credit card often comes with high fees). If your account requires a minimum opening deposit, make sure your first deposit amount meets that minimum.",[2045],{"type":79,"attrs":2046},{"color":91},{"type":105,"attrs":2048,"content":2049},{"level":123},[2050],{"text":2051,"type":76,"marks":2052},"5. Set up online banking",[2053,2054],{"type":820},{"type":79,"attrs":2055},{"color":81},{"type":72,"content":2057},[2058],{"text":2059,"type":76,"marks":2060},"The next step is to set up your online savings account, whether that’s via computer or your bank’s mobile app. From your online dashboard, you’ll be able to link additional accounts, enable mobile alerts, and initiate transfers. You’ll also be able to track your account balance and view your transaction history.",[2061],{"type":79,"attrs":2062},{"color":81},{"type":105,"attrs":2064,"content":2065},{"level":123},[2066],{"text":2067,"type":76,"marks":2068},"6. Name beneficiaries ",[2069,2070],{"type":820},{"type":79,"attrs":2071},{"color":81},{"type":72,"content":2073},[2074],{"text":2075,"type":76,"marks":2076},"If you weren’t asked to do so during the application process, now is the time to designate a beneficiary. If something were to happen to you, your named beneficiary will inherit the funds from your account. You’ll generally need their legal name, social security number, and other personal information.",[2077],{"type":79,"attrs":2078},{"color":81},{"type":105,"attrs":2080,"content":2081},{"level":123},[2082],{"text":2083,"type":76,"marks":2084},"7. Make sure you understand your account limits and regulations  ",[2085,2086],{"type":820},{"type":79,"attrs":2087},{"color":81},{"type":72,"content":2089},[2090],{"text":2091,"type":76,"marks":2092},"Lastly, it’s smart to review all the requirements associated with your account. As the primary depositor, you should know how to avoid fees and how many monthly withdrawals you can make without penalty. Also check to see how you can maintain the APY you were initially offered. Some institutions require you to set up recurring transfers or direct deposits before they can offer you their highest APY. ",[2093],{"type":79,"attrs":2094},{"color":81},{"type":105,"attrs":2096,"content":2097},{"level":107},[2098],{"text":2099,"type":76,"marks":2100},"Pros of a high-yield savings account ",[2101,2102],{"type":820},{"type":79,"attrs":2103},{"color":81},{"type":145,"content":2105},[2106,2121,2136,2151,2166,2181],{"type":148,"content":2107},[2108],{"type":72,"content":2109},[2110,2116],{"text":2111,"type":76,"marks":2112},"Higher interest rates than traditional savings accounts",[2113,2114],{"type":820},{"type":79,"attrs":2115},{"color":81},{"text":2117,"type":76,"marks":2118},". In a traditional savings account, your money is safe, but it’s probably not growing. High-yield savings accounts, on the other hand, allow you to store your money safely while offering you higher rates. Generally, high-yield savings account rates are 15 to 25 times higher than what you’d get with a traditional savings account.",[2119],{"type":79,"attrs":2120},{"color":91},{"type":148,"content":2122},[2123],{"type":72,"content":2124},[2125,2131],{"text":2126,"type":76,"marks":2127},"FDIC-insured for further protection. ",[2128,2129],{"type":820},{"type":79,"attrs":2130},{"color":81},{"text":2132,"type":76,"marks":2133},"Unlike many stock-market investment vehicles, high-yield savings accounts are protected by the Federal Deposit Insurance Corporation (FDIC). FDIC insurance — sometimes labeled on account disclosures as “member FDIC”— means that you cannot lose your savings due to a fault of your bank, even if the bank goes under.",[2134],{"type":79,"attrs":2135},{"color":91},{"type":148,"content":2137},[2138],{"type":72,"content":2139},[2140,2146],{"text":2141,"type":76,"marks":2142},"More flexible than a CD account. ",[2143,2144],{"type":820},{"type":79,"attrs":2145},{"color":81},{"text":2147,"type":76,"marks":2148},"A CD (certificate of deposit) account can offer high interest rates, but it will also require you to store those funds for a set term. While your money is in a CD account, you can’t withdraw it before the term is over without incurring penalties and fees. With a high-yield savings account, you’ll be able to make withdrawals and transfers up to a certain limit without penalty.",[2149],{"type":79,"attrs":2150},{"color":91},{"type":148,"content":2152},[2153],{"type":72,"content":2154},[2155,2161],{"text":2156,"type":76,"marks":2157},"Lower-risk than the stock market. ",[2158,2159],{"type":820},{"type":79,"attrs":2160},{"color":81},{"text":2162,"type":76,"marks":2163},"Long-term, you’re likely to see a higher return on investment from the stock market than with a high-yield savings account. But that ROI may not come before some significant short-term losses. High-yield savings accounts are insulated from those risks, making them better for reaching short-term savings goals.",[2164],{"type":79,"attrs":2165},{"color":91},{"type":148,"content":2167},[2168],{"type":72,"content":2169},[2170,2176],{"text":2171,"type":76,"marks":2172},"Great for money you’re saving for a rainy day. ",[2173,2174],{"type":820},{"type":79,"attrs":2175},{"color":81},{"text":2177,"type":76,"marks":2178},"High-yield savings accounts are great for storing money you don’t need right now, but may need in the near future. A great example is an emergency fund, or funds you’re saving for a house or car.",[2179],{"type":79,"attrs":2180},{"color":91},{"type":148,"content":2182},[2183],{"type":72,"content":2184},[2185,2191],{"text":2186,"type":76,"marks":2187},"Perfect for storing a windfall. ",[2188,2189],{"type":820},{"type":79,"attrs":2190},{"color":81},{"text":2192,"type":76,"marks":2193},"Whether it’s birthday money from a relative, a wedding gift, or a tax refund, high-yield savings accounts are a perfect place to store your money until you know what to do with it. By the time you’ve figured out how to use it, there’s a chance it may have already grown.",[2194],{"type":79,"attrs":2195},{"color":91},{"type":105,"attrs":2197,"content":2198},{"level":107},[2199],{"text":2200,"type":76,"marks":2201},"Cons of a high-yield savings account",[2202,2203],{"type":820},{"type":79,"attrs":2204},{"color":81},{"type":145,"content":2206},[2207,2236,2251,2275],{"type":148,"content":2208},[2209],{"type":72,"content":2210},[2211,2217,2222,2231],{"text":2212,"type":76,"marks":2213},"Not as accessible as checking accounts",[2214,2215],{"type":820},{"type":79,"attrs":2216},{"color":81},{"text":2218,"type":76,"marks":2219},". Legally, you’re only allowed to withdraw money from your high-yield savings account ",[2220],{"type":79,"attrs":2221},{"color":91},{"text":2223,"type":76,"marks":2224},"up to 6 times per month",[2225,2228,2230],{"type":188,"attrs":2226},{"href":2227,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.cnbc.com/select/when-to-open-high-yield-savings-account/",{"type":79,"attrs":2229},{"color":91},{"type":196},{"text":2232,"type":76,"marks":2233}," without fees. For that reason, everyday spending money is better stored in a checking account, where you won’t be charged for consistent usage.",[2234],{"type":79,"attrs":2235},{"color":91},{"type":148,"content":2237},[2238],{"type":72,"content":2239},[2240,2246],{"text":2241,"type":76,"marks":2242},"More requirements than a traditional savings account",[2243,2244],{"type":820},{"type":79,"attrs":2245},{"color":81},{"text":2247,"type":76,"marks":2248},". Traditional bank accounts don’t always require you to maintain a minimum balance, but high-yield savings accounts often do. High-yield savings accounts also have withdrawal and transfer limits, which you’re less likely to find with a traditional bank account.",[2249],{"type":79,"attrs":2250},{"color":91},{"type":148,"content":2252},[2253],{"type":72,"content":2254},[2255,2261,2266],{"text":2256,"type":76,"marks":2257},"Won’t keep up with inflation.",[2258,2259],{"type":820},{"type":79,"attrs":2260},{"color":81},{"text":2262,"type":76,"marks":2263}," The interest you earn on your high-yield savings accounts will be higher than what you’d get on traditional savings accounts, but it’s still lower than the rate of inflation. For long-term ROI, ",[2264],{"type":79,"attrs":2265},{"color":91},{"text":2267,"type":76,"marks":2268},"your money is better stored elsewhere.",[2269,2272,2274],{"type":188,"attrs":2270},{"href":2271,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/article/investing/the-best-investments-right-now#mutual",{"type":79,"attrs":2273},{"color":91},{"type":196},{"type":148,"content":2276},[2277],{"type":72,"content":2278},[2279,2285],{"text":2280,"type":76,"marks":2281},"You may earn less than advertised.",[2282,2283],{"type":820},{"type":79,"attrs":2284},{"color":81},{"text":2286,"type":76,"marks":2287}," The interest rates on high-yield savings accounts aren’t locked in. So if you see an account offering a high rate, know that that rate is subject to change at the bank’s discretion. That means you may not earn as much as you thought you would going in. ",[2288],{"type":79,"attrs":2289},{"color":91},{"type":105,"attrs":2291,"content":2292},{"level":107},[2293],{"text":2294,"type":76,"marks":2295},"Alternatives to a high-yield savings account ",[2296,2297],{"type":820},{"type":79,"attrs":2298},{"color":81},{"type":105,"attrs":2300,"content":2301},{"level":123},[2302],{"text":2303,"type":76,"marks":2304},"A money market account",[2305,2306],{"type":820},{"type":79,"attrs":2307},{"color":81},{"type":72,"content":2309},[2310],{"text":2311,"type":76,"marks":2312},"A money market account is similar to high-yield savings in that it offers higher interest rates than a traditional bank account. Though money market interest rates tend to be a little lower than high-yield savings interest rates, the benefit to a money market account is that it’s more likely to offer check-writing and ATM access. ",[2313],{"type":79,"attrs":2314},{"color":81},{"type":72,"content":2316},[2317],{"text":2318,"type":76,"marks":2319},"Money market accounts are available from banks, credit unions, brokerages, and large financial institutions like Capital One or Goldman Sachs. They're also sometimes called money market deposit accounts (MMDA). The name \"money market\" comes from the fact that this type of account allows you to keep your funds liquid — meaning you can easily access them — while still earning a decent rate of return on your money.",[2320],{"type":79,"attrs":2321},{"color":81},{"type":105,"attrs":2323,"content":2324},{"level":123},[2325],{"text":2326,"type":76,"marks":2327},"A CD account",[2328,2329],{"type":820},{"type":79,"attrs":2330},{"color":81},{"type":72,"content":2332},[2333],{"text":2334,"type":76,"marks":2335},"CDs are a type of savings account insured by the FDIC that can help you earn higher interest rates. With a CD, you agree to keep your money in an account for a specific period of time, and in return the bank promises to grow that money at a fixed interest rate. If you withdraw money from your CD before it matures, you'll pay an early withdrawal penalty that could even wipe out the gains from the interest you earned.",[2336],{"type":79,"attrs":2337},{"color":81},{"type":72,"content":2339},[2340],{"text":2341,"type":76,"marks":2342},"CDs typically come in terms ranging from three months to five years, but longer terms give you better returns than shorter ones. Interest rates on CDs can vary widely depending on the term length and type of CD. You'll also see different types of CDs, including regular CDs, jumbo CDs, and IRA CDs. Each one will have different benefits and drawbacks, so be sure to do your research.",[2343],{"type":79,"attrs":2344},{"color":81},{"type":105,"attrs":2346,"content":2347},{"level":107},[2348],{"text":2349,"type":76,"marks":2350},"Explore savings accounts on Navient Marketplace",[2351,2352],{"type":820},{"type":79,"attrs":2353},{"color":81},{"type":72,"content":2355},[2356],{"text":2357,"type":76,"marks":2358},"High-yield savings accounts are a great way to get a high APY on funds that would otherwise remain stagnant. That makes them one of the best ways to reach your short-term savings goals. With this type of account, you get guaranteed interest earnings, and you won’t have to risk losing any of your hard-earned cash. ",[2359],{"type":79,"attrs":2360},{"color":81},{"type":72,"content":2362},[2363,2368,2375],{"text":2364,"type":76,"marks":2365},"If you’re ready to move your money out of your traditional bank account and start growing your savings for real, the Navient Marketplace is a great place to start. This robust online platform has everything you need to learn more about high-yield savings accounts and compare financial products in a convenient one-stop shop. Visit ",[2366],{"type":79,"attrs":2367},{"color":81},{"text":739,"type":76,"marks":2369},[2370,2372,2374],{"type":188,"attrs":2371},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":2373},{"color":91},{"type":196},{"text":2376,"type":76,"marks":2377}," today to get started.",[2378],{"type":79,"attrs":2379},{"color":91},{"type":72,"content":2381},[2382],{"text":761,"type":76,"marks":2383},[2384,2386],{"type":86,"attrs":2385},{"class":765},{"type":79,"attrs":2387},{"color":81},{"type":72,"content":2389},[2390,2397],{"text":2391,"type":76,"marks":2392},"Information in this blog, including the rates advertised, are current as of 04/27/2023 and subject to change.",[2393,2395],{"type":86,"attrs":2394},{"class":765},{"type":79,"attrs":2396},{"color":81},{"text":2398,"type":76,"marks":2399}," ",[2400],{"type":79,"attrs":2401},{"color":91},{"type":69,"content":2403},[2404],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": 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minutes.",{"type":69,"content":2419},[2420],{"type":72},[2422],{"url":2423,"_uid":2425,"icon":2426,"text":838,"color":839,"sizing":2427,"classes":850,"rounded":45,"outlined":45,"component":851,"textColor":828,"hoverBgColor":828,"mobileClasses":852,"hoverTextColor":839,"navigationType":2431,"_editable":2432},{"id":18,"url":2424,"linktype":192,"fieldtype":834,"cached_url":2424},"https://marketplace.navient.com/banking-and-savings/","23e40a75-af38-4d02-bb83-9e520ac0906e",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":91,"copyright":91,"fieldtype":837},[2428],{"_uid":2429,"width":843,"height":844,"fontSize":845,"component":846,"mobileWidth":847,"mobileHeight":844,"fontSizeMobile":848,"_editable":2430},"3ede4dd9-eed8-4211-9376-aef55b5fe2b2","\u003C!--#storyblok#{\"name\": \"buttonSizing\", \"space\": \"157494\", \"uid\": \"3ede4dd9-eed8-4211-9376-aef55b5fe2b2\", \"id\": \"651798206\"}-->",[],"\u003C!--#storyblok#{\"name\": \"CheckYourRateBtn\", \"space\": \"157494\", \"uid\": 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\"157494\", \"uid\": \"60b7aad0-4fb5-4ec4-b557-61a0608af582\", \"id\": \"651798206\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"64db4d07-4185-4db4-b8e4-7af1e0eed038\", \"id\": \"651798206\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"4c330c4e-f5a7-41f6-8f59-8e9ddfcddf76\", \"id\": \"651798206\"}-->","Savings","https://www.marketplace.navient.com/blog/how-to-open-a-high-yield-savings-account/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798206\"}-->","how-to-open-a-high-yield-savings-account","navient_marketplace/blog/how-to-open-a-high-yield-savings-account",20,[],"20088926-a3c0-4812-aa8e-a6c1af508cfa","2023-05-10T19:26:42.913Z",[],{"name":2464,"created_at":2465,"published_at":2466,"updated_at":2467,"id":2468,"uuid":2469,"content":2470,"slug":3311,"full_slug":3312,"sort_by_date":91,"position":3313,"tag_list":3314,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":3315,"first_published_at":3316,"release_id":91,"lang":899,"path":91,"alternates":3317,"default_full_slug":91,"translated_slugs":91},"The Pros and Cons of High-Yield Savings Accounts","2025-04-07T18:31:34.194Z","2025-12-26T13:45:15.365Z","2025-12-26T13:45:15.444Z",651798207,"196a7bb1-a58b-47d4-a460-07ed53de04ba",{"seo":2471,"_uid":1699,"body":2474,"author":2486,"category":2453,"featured":45,"component":889,"canonicalTag":3309,"_editable":3310},{"_uid":1696,"title":2472,"plugin":17,"og_image":18,"og_title":18,"description":2473,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"The Pros and Cons of High-Yield Savings Accounts - Navient Marketplace","High-yield savings accounts have high interest rates, but they're bad for building long-term wealth. Learn pros & cons of high-yield savings accounts here. ",[2475,2489,3294],{"id":23,"_uid":2476,"image":2477,"intro":2478,"author":2479,"classes":2480,"category":18,"featured":45,"blogTitle":2464,"component":47,"imageLink":2485,"blendImage":45,"authorRoute":2486,"publishedDate":2487,"backgroundColor":51,"_editable":2488},"02557530-adb9-49fb-9319-277497a70cb8","//a.storyblok.com/f/110029/800x534/c831baed33/pros-and-cons-of-high-yield-savings-account.png","Here’s how to take advantage of high-yield savings accounts and determine whether or not they’re right for you.","Ted Vrountas",[2481],{"_uid":2482,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":2484},"6bc0d925-925b-40e2-8cb5-ac30d0086187","text-h4 mt-6 font-weight-bold","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798207\"}-->","/images/pros-and-cons-of-high-yield-savings-account.png","ted-vrountas","Updated: May 8, 2023","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798207\"}-->",{"_uid":2490,"bloks":2491,"classes":859,"component":860,"mobileClasses":18,"containerContent":3292,"_editable":3293},"222843d6-4c0d-4ac3-aa5f-7f579c49c5fe",[2492],{"_uid":2493,"bloks":2494,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":3291},"0737a92f-e416-438d-b8db-1c0e86499923",[2495,3265],{"lg":60,"md":60,"sm":61,"_uid":2496,"cols":61,"bloks":2497,"alignSelf":802,"component":803,"_editable":3264},"c286affa-ee04-4348-8508-6e9f77932903",[2498],{"_uid":2499,"color":66,"classes":67,"content":18,"richText":2500,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":3260,"_editable":3263},"a64c4df0-154e-4c12-b867-678d292709f4",{"type":69,"content":2501},[2502,2511,2518,2525,2534,2581,2590,2597,2604,2613,2623,2671,2680,2701,2735,2744,2765,2772,2779,2788,2795,2802,2823,2831,2840,2861,2882,2891,2898,2905,2914,2959,2968,2989,2998,3102,3110,3117,3125,3146,3153,3161,3195,3202,3210,3217,3224,3243,3251],{"type":72,"content":2503},[2504],{"text":789,"type":76,"marks":2505},[2506,2508],{"type":86,"attrs":2507},{"class":765},{"type":79,"attrs":2509},{"color":2510},"rgb(0, 0, 0)",{"type":72,"content":2512},[2513],{"text":2514,"type":76,"marks":2515},"If you’re like countless Americans, you keep the money you save in a standard savings account. And why not? It does the job of storing your money well enough. It’s safe from market volatility, insured by the federal deposit insurance corporation (FDIC), and easily accessible when you need it. ",[2516],{"type":79,"attrs":2517},{"color":2510},{"type":72,"content":2519},[2520],{"text":2521,"type":76,"marks":2522},"The only problem is that you may be missing out on higher interest rates that could help your savings grow. Standard savings accounts have very low rates — usually less than one percent. With that kind of rate, you’ll likely only make a few dollars per year on your money. With a high-yield savings account, however, you could make hundreds of dollars annually just by leaving your savings untouched. Here’s how to take advantage of high-yield savings accounts and determine whether or not they’re right for you. ",[2523],{"type":79,"attrs":2524},{"color":2510},{"type":105,"attrs":2526,"content":2527},{"level":107},[2528],{"text":2529,"type":76,"marks":2530},"Key takeaways ",[2531,2532],{"type":820},{"type":79,"attrs":2533},{"color":2510},{"type":145,"content":2535},[2536,2545,2554,2563,2572],{"type":148,"content":2537},[2538],{"type":72,"content":2539},[2540],{"text":2541,"type":76,"marks":2542},"A high-yield savings account is a type of bank account that pays more in interest than a traditional savings account.",[2543],{"type":79,"attrs":2544},{"color":2510},{"type":148,"content":2546},[2547],{"type":72,"content":2548},[2549],{"text":2550,"type":76,"marks":2551},"High-yield savings accounts offer easy access to deposited funds, but you may have to pay fees or maintain a certain minimum balance to keep the account open.",[2552],{"type":79,"attrs":2553},{"color":2510},{"type":148,"content":2555},[2556],{"type":72,"content":2557},[2558],{"text":2559,"type":76,"marks":2560},"High-yield savings accounts are great for growing money you plan to spend in the next few years, but they’re not ideal for building long-term wealth. ",[2561],{"type":79,"attrs":2562},{"color":2510},{"type":148,"content":2564},[2565],{"type":72,"content":2566},[2567],{"text":2568,"type":76,"marks":2569},"When choosing a high-yield savings account, be sure to evaluate the annual percentage yield (APY), fees, account accessibility, overdraft protections, and minimum deposit and balance requirements.",[2570],{"type":79,"attrs":2571},{"color":2510},{"type":148,"content":2573},[2574],{"type":72,"content":2575},[2576],{"text":2577,"type":76,"marks":2578},"Popular alternatives to high-yield savings accounts are CD accounts and money market savings accounts.",[2579],{"type":79,"attrs":2580},{"color":2510},{"type":105,"attrs":2582,"content":2583},{"level":107},[2584],{"text":2585,"type":76,"marks":2586},"What is a high-yield savings account?",[2587,2588],{"type":820},{"type":79,"attrs":2589},{"color":2510},{"type":72,"content":2591},[2592],{"text":2593,"type":76,"marks":2594},"A high-yield savings account is a bank account that pays a higher interest rate than what you’d get with a standard savings account at a traditional bank. The rate you earn on your deposited funds will depend on a number of factors, including the bank you choose, the national economy, where you're located, and how much you deposit into the account. ",[2595],{"type":79,"attrs":2596},{"color":2510},{"type":72,"content":2598},[2599],{"text":2600,"type":76,"marks":2601},"High-yield savings accounts typically come with more restrictions than regular savings accounts, but they typically offer interest rates 10 to 15 times higher than standard savings accounts do. You can open a high-yield account at nearly any financial institution, including brick-and-mortar banks, credit unions, and online banks.",[2602],{"type":79,"attrs":2603},{"color":2510},{"type":105,"attrs":2605,"content":2606},{"level":107},[2607],{"text":2608,"type":76,"marks":2609},"Pros of a high-yield savings account",[2610,2611],{"type":820},{"type":79,"attrs":2612},{"color":2510},{"type":105,"attrs":2614,"content":2615},{"level":123},[2616],{"text":2617,"type":76,"marks":2618},"Higher APY",[2619,2620],{"type":820},{"type":79,"attrs":2621},{"color":2622},"rgb(67, 67, 67)",{"type":72,"content":2624},[2625,2630,2640,2645,2653,2658,2666],{"text":2626,"type":76,"marks":2627},"The most obvious advantage of high-yield savings accounts is their high annual percentage yields (APYs). Right now, traditional savings accounts offer a ",[2628],{"type":79,"attrs":2629},{"color":2510},{"text":2631,"type":76,"marks":2632},"national average APY of .40%. ",[2633,2636,2639],{"type":188,"attrs":2634},{"href":2635,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://smartasset.com/checking-account/average-savings-account-interest",{"type":79,"attrs":2637},{"color":2638},"rgb(17, 85, 204)",{"type":196},{"text":2641,"type":76,"marks":2642},"Today’s best high-yield savings accounts, however, boast rates ",[2643],{"type":79,"attrs":2644},{"color":2510},{"text":2646,"type":76,"marks":2647},"upwards of 4%",[2648,2650,2652],{"type":188,"attrs":2649},{"href":1783,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":2651},{"color":2638},{"type":196},{"text":2654,"type":76,"marks":2655}," for qualifying account holders. Better yet, that’s ",[2656],{"type":79,"attrs":2657},{"color":2510},{"text":1799,"type":76,"marks":2659},[2660,2663,2665],{"type":188,"attrs":2661},{"href":2662,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/how-compound-interest-works/",{"type":79,"attrs":2664},{"color":2638},{"type":196},{"text":2667,"type":76,"marks":2668},", which means you’ll earn money on both your original deposit and on the interest you make. As a result, your savings will snowball over time. ",[2669],{"type":79,"attrs":2670},{"color":2510},{"type":105,"attrs":2672,"content":2673},{"level":123},[2674],{"text":2675,"type":76,"marks":2676},"Accessible",[2677,2678],{"type":820},{"type":79,"attrs":2679},{"color":2622},{"type":72,"content":2681},[2682,2687,2696],{"text":2683,"type":76,"marks":2684},"High-yield savings accounts aren’t the only savings vehicles that offer high APYs. In fact, ",[2685],{"type":79,"attrs":2686},{"color":2510},{"text":2688,"type":76,"marks":2689},"CD accounts",[2690,2693,2695],{"type":188,"attrs":2691},{"href":2692,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://bettermoneyhabits.bankofamerica.com/en/personal-banking/what-is-a-cd-investment",{"type":79,"attrs":2694},{"color":2638},{"type":196},{"text":2697,"type":76,"marks":2698}," are likely to offer even higher APYs than high-yield savings accounts. However, CD accounts also require you to lock in your money for a set term –– meaning you won’t be able to withdraw it until the term is over without incurring a penalty. ",[2699],{"type":79,"attrs":2700},{"color":2510},{"type":72,"content":2702},[2703,2708,2717,2722,2726,2730],{"text":2704,"type":76,"marks":2705},"On the other hand, high-yield savings accounts allow you to move money at least six times per month without penalty. In the past this was a federally mandated cap. In 2020, however, the Federal Reserve passed a motion called “Regulation D,” which ",[2706],{"type":79,"attrs":2707},{"color":2510},{"text":2709,"type":76,"marks":2710},"removed this limit",[2711,2714,2716],{"type":188,"attrs":2712},{"href":2713,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.bankrate.com/banking/federal-reserve-lifts-regulation-d-withdrawal-limit/",{"type":79,"attrs":2715},{"color":2638},{"type":196},{"text":2718,"type":76,"marks":2719},". This was part to ease financial burdens during the Covid-19 pandemic, but the Fed doesn’t have plans to reinstitute the limit. Many banks now allow unlimited transfers. ",[2720],{"type":79,"attrs":2721},{"color":2510},{"type":1599,"marks":2723},[2724],{"type":79,"attrs":2725},{"color":2510},{"type":1599,"marks":2727},[2728],{"type":79,"attrs":2729},{"color":2510},{"text":2731,"type":76,"marks":2732},"So, if you think there’s a chance you might need some of the money you’re hoping to earn interest on, a high-yield savings account offers more flexibility than a CD account. ",[2733],{"type":79,"attrs":2734},{"color":2510},{"type":105,"attrs":2736,"content":2737},{"level":123},[2738],{"text":2739,"type":76,"marks":2740},"Safe ",[2741,2742],{"type":820},{"type":79,"attrs":2743},{"color":2622},{"type":72,"content":2745},[2746,2751,2760],{"text":2747,"type":76,"marks":2748},"Popular high-yield savings accounts are FDIC insured (look for “member FDIC” listed in the account terms), which means that if your bank goes out of business, the U.S. government will reimburse you for your money ",[2749],{"type":79,"attrs":2750},{"color":2510},{"text":2752,"type":76,"marks":2753},"up to a certain limit",[2754,2757,2759],{"type":188,"attrs":2755},{"href":2756,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fdic.gov/resources/deposit-insurance/",{"type":79,"attrs":2758},{"color":2638},{"type":196},{"text":2761,"type":76,"marks":2762}," per depositor. ",[2763],{"type":79,"attrs":2764},{"color":2510},{"type":72,"content":2766},[2767],{"text":2768,"type":76,"marks":2769},"High-yield accounts are also nowhere near as volatile as other popular investment vehicles like stocks. Rates on high-yield accounts are variable, which means the rate you were initially advertised may not remain the same throughout the term. Even so, you can feel secure knowing that your savings won’t won't lose value in that time, in the way they could in the stock market. ",[2770],{"type":79,"attrs":2771},{"color":2510},{"type":72,"content":2773},[2774],{"text":2775,"type":76,"marks":2776},"With a high-yield savings account, there’s essentially no risk of losing money. That’s why these accounts are so great for growing funds that you intend to spend within the short term, but don’t want to lose –– like a down payment for a house or car. ",[2777],{"type":79,"attrs":2778},{"color":2510},{"type":105,"attrs":2780,"content":2781},{"level":123},[2782],{"text":2783,"type":76,"marks":2784},"Great for building an emergency fund ",[2785,2786],{"type":820},{"type":79,"attrs":2787},{"color":2622},{"type":72,"content":2789},[2790],{"text":2791,"type":76,"marks":2792},"Instead of storing your emergency fund in a traditional savings account, why not put it in a high-yield environment where it will grow while it’s not in use? ",[2793],{"type":79,"attrs":2794},{"color":2510},{"type":72,"content":2796},[2797],{"text":2798,"type":76,"marks":2799},"Here’s a good example. Right now, the best high-yield savings accounts offer APYs around 4%. If you made an initial deposit of $5,000, then deposited $300 every month for three years in this kind of account, you would have $17,129.01 by the end of that period (provided the APY remained 4.0% for all three years). ",[2800],{"type":79,"attrs":2801},{"color":91},{"type":72,"content":2803},[2804,2809,2818],{"text":2805,"type":76,"marks":2806},"Conversely, if you adopted that same savings plan with a traditional savings account that ",[2807],{"type":79,"attrs":2808},{"color":2510},{"text":2810,"type":76,"marks":2811},"offers a 0.33% APY",[2812,2815,2817],{"type":188,"attrs":2813},{"href":2814,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.businessinsider.com/personal-finance/average-savings-account-interest-rate",{"type":79,"attrs":2816},{"color":2638},{"type":196},{"text":2819,"type":76,"marks":2820},", you’d only have $15,904.86 at the end of those three years. That’s a difference of $1,224.17. As part of an emergency fund, that $1,224 could go toward covering an expense that you would otherwise have to put on a credit card. And charging big expenses to credit cards, which are known for particularly high interest rates, can put you on the fast track to unmanageable debt. ",[2821],{"type":79,"attrs":2822},{"color":2510},{"type":105,"attrs":2824,"content":2825},{"level":107},[2826],{"text":2200,"type":76,"marks":2827},[2828,2829],{"type":820},{"type":79,"attrs":2830},{"color":2510},{"type":105,"attrs":2832,"content":2833},{"level":123},[2834],{"text":2835,"type":76,"marks":2836},"Not as accessible as a checking account",[2837,2838],{"type":820},{"type":79,"attrs":2839},{"color":2622},{"type":72,"content":2841},[2842,2847,2856],{"text":2843,"type":76,"marks":2844},"Despite ",[2845],{"type":79,"attrs":2846},{"color":2510},{"text":2848,"type":76,"marks":2849},"Regulation D",[2850,2853,2855],{"type":188,"attrs":2851},{"href":2852,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.forbes.com/advisor/banking/savings/regulation-d/#:~:text=Under%20the%20revision%20to%20Regulation,for%20unlimited%20transfers%20or%20withdrawals.",{"type":79,"attrs":2854},{"color":2638},{"type":196},{"text":2857,"type":76,"marks":2858},", some high-yield savings accounts still only allow you to withdraw funds six times per month. More than that, and you may have to pay penalties or fees. You may find banks that offer you unlimited transfers and withdrawals, while others still adhere strictly to the six-per-month withdrawal limit. ",[2859],{"type":79,"attrs":2860},{"color":2510},{"type":72,"content":2862},[2863,2868,2877],{"text":2864,"type":76,"marks":2865},"High-yield savings accounts also don’t come with debit cards or checkbooks, which means you can’t spend directly from the account. So, if you’re planning to use your high-yield savings account like a ",[2866],{"type":79,"attrs":2867},{"color":2510},{"text":2869,"type":76,"marks":2870},"high-interest checking account",[2871,2874,2876],{"type":188,"attrs":2872},{"href":2873,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.chime.com/blog/what-are-high-interest-checking-accounts/",{"type":79,"attrs":2875},{"color":2638},{"type":196},{"text":2878,"type":76,"marks":2879},", you’re going to be disappointed. ",[2880],{"type":79,"attrs":2881},{"color":2510},{"type":105,"attrs":2883,"content":2884},{"level":123},[2885],{"text":2886,"type":76,"marks":2887},"Stricter requirements to maintain  ",[2888,2889],{"type":820},{"type":79,"attrs":2890},{"color":2622},{"type":72,"content":2892},[2893],{"text":2894,"type":76,"marks":2895},"Many banks allow you to open a traditional savings account without making a minimum deposit or maintaining a minimum balance. In contrast, high-yield savings accounts usually do require minimums.",[2896],{"type":79,"attrs":2897},{"color":2510},{"type":72,"content":2899},[2900],{"text":2901,"type":76,"marks":2902},"Generally, minimum deposits can range from a few dollars to $1,000 or more, and minimum balances can range from just one dollar to several thousand. If you can’t meet these minimums, you won’t be allowed to open an account or earn interest, and you may be charged a penalty fee. That said, some modern high-yield savings accounts require zero minimums. If you open an account with the right financial institution, you may find that it’s just as easy to open and maintain a high-yield savings account as it is a traditional savings account. ",[2903],{"type":79,"attrs":2904},{"color":2510},{"type":105,"attrs":2906,"content":2907},{"level":123},[2908],{"text":2909,"type":76,"marks":2910},"Bad for wealth-building ",[2911,2912],{"type":820},{"type":79,"attrs":2913},{"color":2622},{"type":72,"content":2915},[2916,2921,2927,2932,2936,2940,2945,2954],{"text":2917,"type":76,"marks":2918},"High-yield savings accounts allow you to earn more than you would in a traditional savings account. However, the interest you earn won’t be enough to keep up with inflation. In other words, your money will grow inside the high-yield savings account, but the value of the dollar will likely decrease at an even faster rate. So, if you put a bunch of cash into a high-yield account in 2020, you’ll have more than you started with in 2025, but the actual ",[2919],{"type":79,"attrs":2920},{"color":2510},{"text":2922,"type":76,"marks":2923},"value ",[2924,2925],{"type":237},{"type":79,"attrs":2926},{"color":2510},{"text":2928,"type":76,"marks":2929},"of that money will be less due to inflation. ",[2930],{"type":79,"attrs":2931},{"color":2510},{"type":1599,"marks":2933},[2934],{"type":79,"attrs":2935},{"color":2510},{"type":1599,"marks":2937},[2938],{"type":79,"attrs":2939},{"color":2510},{"text":2941,"type":76,"marks":2942},"If your goal is long-term wealth building –– if you’re saving for retirement or your kids’ college fund, for example –– your money is more likely to help you meet your financial goals if you put it ",[2943],{"type":79,"attrs":2944},{"color":2510},{"text":2946,"type":76,"marks":2947},"in a diversified portfolio",[2948,2951,2953],{"type":188,"attrs":2949},{"href":2950,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.bankrate.com/investing/saving-vs-investing/#different",{"type":79,"attrs":2952},{"color":2638},{"type":196},{"text":2955,"type":76,"marks":2956}," instead of a high-yield savings account.",[2957],{"type":79,"attrs":2958},{"color":2510},{"type":105,"attrs":2960,"content":2961},{"level":123},[2962],{"text":2963,"type":76,"marks":2964},"APY is not guaranteed ",[2965,2966],{"type":820},{"type":79,"attrs":2967},{"color":2622},{"type":72,"content":2969},[2970,2975,2984],{"text":2971,"type":76,"marks":2972},"The APY you see advertised as you shop for a high-yield savings account may look enticing, but it’s not necessarily guaranteed. These rates are “",[2973],{"type":79,"attrs":2974},{"color":2510},{"text":2976,"type":76,"marks":2977},"variable APYs",[2978,2981,2983],{"type":188,"attrs":2979},{"href":2980,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.ally.com/stories/save/how-is-annual-percentage-yield-calculated/",{"type":79,"attrs":2982},{"color":2638},{"type":196},{"text":2985,"type":76,"marks":2986},",” which means they’re subject to change at any time. Though your savings are FDIC-insured to keep you from actually losing money, there are no federal regulations that prevent you from earning less than advertised if the bank decides to lower its rate.  ",[2987],{"type":79,"attrs":2988},{"color":2510},{"type":105,"attrs":2990,"content":2991},{"level":107},[2992],{"text":2993,"type":76,"marks":2994},"How to pick a high-yield savings account ",[2995,2996],{"type":820},{"type":79,"attrs":2997},{"color":2510},{"type":145,"content":2999},[3000,3014,3029,3057,3072,3087],{"type":148,"content":3001},[3002],{"type":72,"content":3003},[3004,3009],{"text":1842,"type":76,"marks":3005},[3006,3007],{"type":820},{"type":79,"attrs":3008},{"color":2510},{"text":3010,"type":76,"marks":3011},": The interest rate you can earn on your savings is one of the most important factors to consider when choosing a high-yield savings account. The higher the APY, the better.",[3012],{"type":79,"attrs":3013},{"color":2510},{"type":148,"content":3015},[3016],{"type":72,"content":3017},[3018,3024],{"text":3019,"type":76,"marks":3020},"Minimum balance and deposit amount",[3021,3022],{"type":820},{"type":79,"attrs":3023},{"color":2510},{"text":3025,"type":76,"marks":3026},": Some banks have minimum balance requirements you must meet to earn interest. If you don't have enough money in your account, the bank may charge you an administrative fee or close your account altogether.",[3027],{"type":79,"attrs":3028},{"color":2510},{"type":148,"content":3030},[3031],{"type":72,"content":3032},[3033,3038,3043,3052],{"text":1872,"type":76,"marks":3034},[3035,3036],{"type":820},{"type":79,"attrs":3037},{"color":2510},{"text":3039,"type":76,"marks":3040},": Look closely at any fees associated with opening and maintaining an account. Some banks charge monthly maintenance fees. Others levy penalties if you make withdrawals too early or often. Some of the ",[3041],{"type":79,"attrs":3042},{"color":2510},{"text":3044,"type":76,"marks":3045},"best high-yield savings accounts",[3046,3049,3051],{"type":188,"attrs":3047},{"href":3048,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://fortune.com/recommends/banking/best-high-yield-savings-accounts/",{"type":79,"attrs":3050},{"color":2638},{"type":196},{"text":3053,"type":76,"marks":3054}," have no fees, so try searching for “no-fee high-yield savings accounts.”",[3055],{"type":79,"attrs":3056},{"color":2510},{"type":148,"content":3058},[3059],{"type":72,"content":3060},[3061,3067],{"text":3062,"type":76,"marks":3063},"Online access:",[3064,3065],{"type":820},{"type":79,"attrs":3066},{"color":2510},{"text":3068,"type":76,"marks":3069}," Some brick-and-mortar institutions require account holders to make all transactions at a physical bank location. If this doesn’t fit your schedule, look for mobile banking options, which will let you manage your money anywhere and at any time. Many online banks offer fully online savings accounts, which can be a convenient option for many savers.",[3070],{"type":79,"attrs":3071},{"color":2510},{"type":148,"content":3073},[3074],{"type":72,"content":3075},[3076,3082],{"text":3077,"type":76,"marks":3078},"Overdraft protection",[3079,3080],{"type":820},{"type":79,"attrs":3081},{"color":2510},{"text":3083,"type":76,"marks":3084},": Look to see whether or not your bank offers overdraft protection. If it does, how much money does it allow users to borrow against their balance without charging penalties?",[3085],{"type":79,"attrs":3086},{"color":2510},{"type":148,"content":3088},[3089],{"type":72,"content":3090},[3091,3097],{"text":3092,"type":76,"marks":3093},"Accessibility",[3094,3095],{"type":820},{"type":79,"attrs":3096},{"color":2510},{"text":3098,"type":76,"marks":3099},": Consider your preferred way to add and withdraw funds. Do you prefer the set-it-and-forget-it ease of direct deposits? Will you want to withdraw cash via an ATM card? These accessibility features may not be deal-breakers if you find an account with a particularly high APY, but they could help you decide between two accounts that are otherwise similar.",[3100],{"type":79,"attrs":3101},{"color":2510},{"type":105,"attrs":3103,"content":3104},{"level":107},[3105],{"text":2294,"type":76,"marks":3106},[3107,3108],{"type":820},{"type":79,"attrs":3109},{"color":2510},{"type":72,"content":3111},[3112],{"text":3113,"type":76,"marks":3114},"High-yield savings accounts aren’t for everyone. Here are some other alternatives you can use to save money and reach your personal finance goals. ",[3115],{"type":79,"attrs":3116},{"color":2510},{"type":105,"attrs":3118,"content":3119},{"level":123},[3120],{"text":2303,"type":76,"marks":3121},[3122,3123],{"type":820},{"type":79,"attrs":3124},{"color":2622},{"type":72,"content":3126},[3127,3132,3141],{"text":3128,"type":76,"marks":3129},"Like a high-yield savings account, a ",[3130],{"type":79,"attrs":3131},{"color":2510},{"text":3133,"type":76,"marks":3134},"money market savings account (MMA)",[3135,3138,3140],{"type":188,"attrs":3136},{"href":3137,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.forbes.com/advisor/banking/what-is-a-money-market-account-and-how-does-it-work/",{"type":79,"attrs":3139},{"color":2638},{"type":196},{"text":3142,"type":76,"marks":3143}," is a deposit account that pays interest, typically at higher rates than what you would earn on traditional savings accounts. You can open an MMA at most banks and credit unions, as well as with brokerage firms such as Fidelity, Schwab, and TD Ameritrade. ",[3144],{"type":79,"attrs":3145},{"color":2510},{"type":72,"content":3147},[3148],{"text":3149,"type":76,"marks":3150},"In general, money market accounts are designed to both provide depositors with access to their funds, and to pay interest at competitive rates. The main difference between a savings account and a money market account is the availability of check-writing privileges. While both types of accounts allow you access to your cash, many money market accounts allow you to write checks or use debit cards, which can make it quicker and easier to make withdrawals.",[3151],{"type":79,"attrs":3152},{"color":2510},{"type":105,"attrs":3154,"content":3155},{"level":123},[3156],{"text":2326,"type":76,"marks":3157},[3158,3159],{"type":820},{"type":79,"attrs":3160},{"color":2622},{"type":72,"content":3162},[3163,3168,3172,3176,3181,3190],{"text":3164,"type":76,"marks":3165},"A CD account is a savings account that locks your money away for a predetermined amount of time and, in return, offers high interest rates on your funds. Most CDs have terms ranging from one month to five years. Often, rates are highest for one- to three- year CDs. Longer-term CDs are slightly riskier for lenders, who can’t be sure that national interest rates won’t plummet within that time. So, sometimes rates start to dip after the five-year term mark.",[3166],{"type":79,"attrs":3167},{"color":2510},{"type":1599,"marks":3169},[3170],{"type":79,"attrs":3171},{"color":2510},{"type":1599,"marks":3173},[3174],{"type":79,"attrs":3175},{"color":2510},{"text":3177,"type":76,"marks":3178},"While there are many types of CDs available in today's market, including ",[3179],{"type":79,"attrs":3180},{"color":2510},{"text":3182,"type":76,"marks":3183},"bump-up and step-up CDs",[3184,3187,3189],{"type":188,"attrs":3185},{"href":3186,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.bankrate.com/banking/cds/bump-up-cd/#how-to-open",{"type":79,"attrs":3188},{"color":2638},{"type":196},{"text":3191,"type":76,"marks":3192},", the traditional fixed-rate CD remains the most popular. With this type of CD, the interest rate remains steady throughout the life of the account.",[3193],{"type":79,"attrs":3194},{"color":2510},{"type":72,"content":3196},[3197],{"text":3198,"type":76,"marks":3199},"Keep in mind that if you choose to withdraw money before the end of the term, you'll be charged an early withdrawal penalty that could eat into your earnings. CDs generally offer higher APYs than high-yield savings accounts, but the tradeoff is that your funds are much less accessible.",[3200],{"type":79,"attrs":3201},{"color":2510},{"type":105,"attrs":3203,"content":3204},{"level":107},[3205],{"text":2349,"type":76,"marks":3206},[3207,3208],{"type":820},{"type":79,"attrs":3209},{"color":2510},{"type":72,"content":3211},[3212],{"text":3213,"type":76,"marks":3214},"If you’re storing your short-term savings in a traditional savings account, you could be missing out on significant earnings. High-yield savings accounts are ideal for funds that you don’t plan to spend immediately but also don’t want to risk losing — like an emergency fund or a down payment for a home. ",[3215],{"type":79,"attrs":3216},{"color":2510},{"type":72,"content":3218},[3219],{"text":3220,"type":76,"marks":3221},"In most cases, all you have to do to open a high-yield savings account is fill out a simple application, make a minimum deposit, and maintain a minimum account balance. It’s not a lot of work considering the reward: an account that pays a much higher rate of interest than your standard savings account. Of course, high-yield savings accounts are not without their downsides. Be sure to consider the pros and cons — and your personal savings goals — before you open your own.",[3222],{"type":79,"attrs":3223},{"color":2510},{"type":72,"content":3225},[3226,3231,3238],{"text":3227,"type":76,"marks":3228},"Ready to explore high-yield savings accounts? You can browse all kinds of savings accounts and other financial products on ",[3229],{"type":79,"attrs":3230},{"color":2510},{"text":739,"type":76,"marks":3232},[3233,3235,3237],{"type":188,"attrs":3234},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":3236},{"color":2638},{"type":196},{"text":3239,"type":76,"marks":3240},". Get rates, peruse eligibility requirements, and compare and contrast the accounts that best suit you. ",[3241],{"type":79,"attrs":3242},{"color":2510},{"type":72,"content":3244},[3245],{"text":761,"type":76,"marks":3246},[3247,3249],{"type":86,"attrs":3248},{"class":765},{"type":79,"attrs":3250},{"color":2510},{"type":72,"content":3252},[3253],{"text":3254,"type":76,"marks":3255},"Information in this blog, including the rates advertised, are current as of 05/08/2023 and subject to change.",[3256,3258],{"type":86,"attrs":3257},{"class":765},{"type":79,"attrs":3259},{"color":2510},{"type":69,"content":3261},[3262],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798207\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": 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\"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798207\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798207\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798207\"}-->","https://www.marketplace.navient.com/blog/pros-and-cons-of-high-yield-savings-account/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798207\"}-->","pros-and-cons-of-high-yield-savings-account","navient_marketplace/blog/pros-and-cons-of-high-yield-savings-account",30,[],"7bf27d03-2663-414d-bb97-348ad770d38d","2023-05-10T19:30:35.871Z",[],{"name":3319,"created_at":3320,"published_at":3321,"updated_at":3322,"id":3323,"uuid":3324,"content":3325,"slug":4424,"full_slug":4425,"sort_by_date":91,"position":4426,"tag_list":4427,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":4428,"first_published_at":4429,"release_id":91,"lang":899,"path":91,"alternates":4430,"default_full_slug":91,"translated_slugs":91},"Benefits and Disadvantages of Term Life Insurance","2025-04-07T18:31:36.056Z","2025-12-26T13:45:15.635Z","2025-12-26T13:45:15.676Z",651798208,"8e911b48-50ac-49a8-8b4e-6957c8d70513",{"seo":3326,"_uid":1699,"body":3329,"author":1711,"category":4421,"featured":45,"component":889,"canonicalTag":4422,"_editable":4423},{"_uid":1696,"title":3327,"plugin":17,"og_image":18,"og_title":18,"description":3328,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Benefits and Disadvantages of Term Life Insurance - Navient Marketplace","What are the benefits of term life insurance? Affordable, flexible, and tax-free. Learn the rest here, along with disadvantages and alternatives.",[3330,3339,4409],{"id":23,"_uid":2476,"image":3331,"intro":3332,"author":1705,"classes":3333,"category":18,"featured":45,"blogTitle":3319,"component":47,"imageLink":3336,"blendImage":45,"authorRoute":1711,"publishedDate":3337,"backgroundColor":51,"_editable":3338},"//a.storyblok.com/f/110029/800x471/227172a6b5/benefits-of-term-life-insurance.png","Term life insurance is both flexible and budget-friendly. Here’s how to determine whether or not it’s the right fit for you.",[3334],{"_uid":2482,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":37,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":3335},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798208\"}-->","/images/benefits-of-term-life-insurance.png","Updated: April 27, 2023","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798208\"}-->",{"_uid":2490,"bloks":3340,"classes":859,"component":860,"mobileClasses":18,"containerContent":4407,"_editable":4408},[3341],{"_uid":2493,"bloks":3342,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":4406},[3343,3973,4002,4114],{"lg":60,"md":60,"sm":61,"_uid":2496,"cols":61,"bloks":3344,"alignSelf":802,"component":803,"_editable":3972},[3345],{"_uid":2499,"color":66,"classes":67,"content":18,"richText":3346,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":3968,"_editable":3971},{"type":69,"content":3347},[3348,3356,3363,3372,3388,3395,3402,3411,3432,3440,3447,3454,3462,3469,3477,3498,3505,3513,3520,3528,3549,3557,3564,3573,3580,3588,3595,3603,3624,3632,3639,3647,3660,3668,3675,3684,3705,3718,3731,3758,3771,3780,3801,3877,3886,3906],{"type":72,"content":3349},[3350],{"text":789,"type":76,"marks":3351},[3352,3354],{"type":86,"attrs":3353},{"class":765},{"type":79,"attrs":3355},{"color":81},{"type":72,"content":3357},[3358],{"text":3359,"type":76,"marks":3360},"When you have loved ones depending on you for their livelihoods, life insurance can provide invaluable peace of mind. However, not everyone can afford the high premiums and committing contracts of traditional life insurance. Term life insurance, on the other hand, is both flexible and budget-friendly. If you’re looking for immediate, short-term coverage — either because you only need to cover your dependents for a certain number of years, or because you expect your financial situation to change — term life might be your solution. Here’s how to determine whether or not it’s the right fit for you. ",[3361],{"type":79,"attrs":3362},{"color":81},{"type":105,"attrs":3364,"content":3365},{"level":107},[3366],{"text":3367,"type":76,"marks":3368},"What is term life insurance?",[3369,3370],{"type":820},{"type":79,"attrs":3371},{"color":81},{"type":72,"content":3373},[3374,3383],{"text":3375,"type":76,"marks":3376},"Term life insurance",[3377,3380,3382],{"type":188,"attrs":3378},{"href":3379,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/article/insurance/what-is-term-life-insurance",{"type":79,"attrs":3381},{"color":81},{"type":196},{"text":3384,"type":76,"marks":3385}," is a type of coverage that helps protect against the financial hardship that can be caused by the sudden death of a breadwinner. In exchange for monthly payments, providers pay out a set amount in the event of your untimely passing.",[3386],{"type":79,"attrs":3387},{"color":91},{"type":72,"content":3389},[3390],{"text":3391,"type":76,"marks":3392},"What makes term life insurance unique is that it has an expiration date. With whole life insurance, you keep paying your premiums for your entire life, but with term life insurance, you only pay premiums up until a predetermined end date. At that point, your term coverage ends. ",[3393],{"type":79,"attrs":3394},{"color":81},{"type":72,"content":3396},[3397],{"text":3398,"type":76,"marks":3399},"Since most people only need life insurance coverage until they reach retirement age or their dependents are old enough to take care of themselves, they’ll stop paying premiums once they reach that milestone. After that, most people move on to other types of insurance, such as permanent or universal life insurance. ",[3400],{"type":79,"attrs":3401},{"color":91},{"type":105,"attrs":3403,"content":3404},{"level":107},[3405],{"text":3406,"type":76,"marks":3407},"The benefits of term life insurance ",[3408,3409],{"type":820},{"type":79,"attrs":3410},{"color":81},{"type":72,"content":3412},[3413,3418,3427],{"text":3414,"type":76,"marks":3415},"From flexible payment terms to lower premiums, term ",[3416],{"type":79,"attrs":3417},{"color":81},{"text":3419,"type":76,"marks":3420},"life insurance has plenty of perks",[3421,3424,3426],{"type":188,"attrs":3422},{"href":3423,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.newyorklife.com/articles/six-reasons-to-buy-life-insurance",{"type":79,"attrs":3425},{"color":91},{"type":196},{"text":3428,"type":76,"marks":3429},". Here are a few of the benefits to consider. ",[3430],{"type":79,"attrs":3431},{"color":91},{"type":105,"attrs":3433,"content":3434},{"level":123},[3435],{"text":3436,"type":76,"marks":3437},"More coverage options available ",[3438],{"type":79,"attrs":3439},{"color":81},{"type":72,"content":3441},[3442],{"text":3443,"type":76,"marks":3444},"Unlike a whole life policy, term coverage is temporary. This means you can take out a policy for almost any period of time you wish. Most insurance providers offer policy terms ranging from 5 to 30 years. So, a couple with young children, for example, may want to take out a policy with a 20- or 30-year term, which will cover the kids until they’re out of the house (and/or out of college). ",[3445],{"type":79,"attrs":3446},{"color":81},{"type":72,"content":3448},[3449],{"text":3450,"type":76,"marks":3451},"Conversely, a newly married person with student debt might want to take a shorter policy — maybe a 10-year term — to protect their partner in case they pass away before paying off their loans. With term life insurance, you can choose whichever term suits your needs. ",[3452],{"type":79,"attrs":3453},{"color":81},{"type":105,"attrs":3455,"content":3456},{"level":123},[3457],{"text":3458,"type":76,"marks":3459},"Flexible payment options",[3460],{"type":79,"attrs":3461},{"color":81},{"type":72,"content":3463},[3464],{"text":3465,"type":76,"marks":3466},"Some term life insurance providers offer multiple payment options. Policyholders can elect to make their premium payments monthly, quarterly, semi-annually, or even annually. This allows you to select a payment schedule that best suits your budgeting style. (Whole life insurance policies, on the other hand, typically follow a monthly schedule with set payment amounts.)",[3467],{"type":79,"attrs":3468},{"color":81},{"type":105,"attrs":3470,"content":3471},{"level":123},[3472],{"text":3473,"type":76,"marks":3474},"Generally cheaper",[3475],{"type":79,"attrs":3476},{"color":81},{"type":72,"content":3478},[3479,3484,3493],{"text":3480,"type":76,"marks":3481},"Because term life coverage is only issued for a specific length of time, ",[3482],{"type":79,"attrs":3483},{"color":81},{"text":3485,"type":76,"marks":3486},"it is less costly",[3487,3490,3492],{"type":188,"attrs":3488},{"href":3489,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.policygenius.com/life-insurance/term-vs-whole-life-insurance/",{"type":79,"attrs":3491},{"color":91},{"type":196},{"text":3494,"type":76,"marks":3495}," than whole life insurance. That makes it a great choice for younger families who aren’t interested in permanent life insurance. ",[3496],{"type":79,"attrs":3497},{"color":91},{"type":72,"content":3499},[3500],{"text":3501,"type":76,"marks":3502},"For example, a 35-year-old nonsmoker in good health, can get a 20-year term policy with $500,000 in coverage for around $30 per month. The same candidate would likely pay more than $500 per month for a whole life insurance policy with the same coverage.",[3503],{"type":79,"attrs":3504},{"color":81},{"type":105,"attrs":3506,"content":3507},{"level":123},[3508],{"text":3509,"type":76,"marks":3510},"Certain plans are renewable",[3511],{"type":79,"attrs":3512},{"color":81},{"type":72,"content":3514},[3515],{"text":3516,"type":76,"marks":3517},"Some companies allow policyholders to renew their term life policy at the end of the term. This gives you the flexibility to end the contract or continue as you wish — all without the fuss of reapplying. Renewal may come with a slight premium increase, especially if you’ve gone up an age bracket since you took out your last policy. However, because you have an existing relationship with your insurance company, you likely won’t need to take a new medical exam.",[3518],{"type":79,"attrs":3519},{"color":81},{"type":105,"attrs":3521,"content":3522},{"level":123},[3523],{"text":3524,"type":76,"marks":3525},"Tax-free death benefit",[3526],{"type":79,"attrs":3527},{"color":81},{"type":72,"content":3529},[3530,3535,3544],{"text":3531,"type":76,"marks":3532},"If you pass away before your term length is up, the insurance company will send your beneficiary a lump sum payout called a “death benefit” or “disbursement.” Term life insurance ",[3533],{"type":79,"attrs":3534},{"color":81},{"text":3536,"type":76,"marks":3537},"disbursements are tax-free",[3538,3541,3543],{"type":188,"attrs":3539},{"href":3540,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.irs.gov/help/ita/are-the-life-insurance-proceeds-i-received-taxable",{"type":79,"attrs":3542},{"color":91},{"type":196},{"text":3545,"type":76,"marks":3546},", so your beneficiary will receive the total amount without any withholdings. This is in contrast to certain whole life plans, which can accrue value over time. In this case, any interest you made on that value will be taxed before the disbursements reach the beneficiary.",[3547],{"type":79,"attrs":3548},{"color":91},{"type":105,"attrs":3550,"content":3551},{"level":123},[3552],{"text":3553,"type":76,"marks":3554},"Easy to cancel",[3555],{"type":79,"attrs":3556},{"color":81},{"type":72,"content":3558},[3559],{"text":3560,"type":76,"marks":3561},"Most term life insurance policies allow you to cancel at any time without having to pay cancellation fees or any other penalties. So, if your financial situation changes mid-way through your term, you can easily back out of your agreement or pivot to a new plan that better suits your needs.",[3562],{"type":79,"attrs":3563},{"color":81},{"type":105,"attrs":3565,"content":3566},{"level":107},[3567],{"text":3568,"type":76,"marks":3569},"The disadvantages of term life insurance ",[3570,3571],{"type":820},{"type":79,"attrs":3572},{"color":81},{"type":72,"content":3574},[3575],{"text":3576,"type":76,"marks":3577},"While it can have a ton of benefits, term life insurance may not be the best choice for everyone. Here are a few potential drawbacks to consider before you take out a policy. ",[3578],{"type":79,"attrs":3579},{"color":81},{"type":105,"attrs":3581,"content":3582},{"level":123},[3583],{"text":3584,"type":76,"marks":3585},"When you renew, your premiums are based on your current health.",[3586],{"type":79,"attrs":3587},{"color":81},{"type":72,"content":3589},[3590],{"text":3591,"type":76,"marks":3592},"Unlike whole life insurance — which locks you into a predetermined rate for your entire life — your term life policy will be based upon your health at the start of each term. So, even if you choose to renew your term life insurance, your new policy won’t necessarily be an exact continuation of your old policy. If you develop health issues during a term or between terms, you could see a significant rate hike if you take out a new one.",[3593],{"type":79,"attrs":3594},{"color":81},{"type":105,"attrs":3596,"content":3597},{"level":123},[3598],{"text":3599,"type":76,"marks":3600},"Term life insurance doesn’t have a cash value component, so there’s no investment aspect. You also can’t take out loans against it.",[3601],{"type":79,"attrs":3602},{"color":81},{"type":72,"content":3604},[3605,3610,3619],{"text":3606,"type":76,"marks":3607},"With many types of whole life insurance, your policy will build value as you pay into it. That means you can treat a whole life policy as an investment. You can make money on it via interest, and you can ",[3608],{"type":79,"attrs":3609},{"color":81},{"text":3611,"type":76,"marks":3612},"access those funds",[3613,3616,3618],{"type":188,"attrs":3614},{"href":3615,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/withdraw",{"type":79,"attrs":3617},{"color":91},{"type":196},{"text":3620,"type":76,"marks":3621}," while you’re still alive. In a term life agreement, however, your policy will not build cash value. You can’t make interest on the money you pay into it, and the amount of coverage won’t grow over time.   ",[3622],{"type":79,"attrs":3623},{"color":91},{"type":105,"attrs":3625,"content":3626},{"level":123},[3627],{"text":3628,"type":76,"marks":3629},"You can’t surrender your policy for cash value if you no longer want it.",[3630],{"type":79,"attrs":3631},{"color":81},{"type":72,"content":3633},[3634],{"text":3635,"type":76,"marks":3636},"If you cancel a whole life insurance plan prematurely, you may be able to receive a percentage of the funds that have accrued during the active policy period. However, term life insurance policies don’t have a cash value component to them. So, if you cancel your agreement, you won’t receive any cash back. ",[3637],{"type":79,"attrs":3638},{"color":81},{"type":105,"attrs":3640,"content":3641},{"level":123},[3642],{"text":3643,"type":76,"marks":3644},"Term life doesn’t cover pre-existing conditions.",[3645],{"type":79,"attrs":3646},{"color":81},{"type":72,"content":3648},[3649,3654],{"text":3650,"type":76,"marks":3651},"If you have pre-existing medical conditions, you may not qualify for term coverage. To find out, you can check the insurance provider’s list of exclusions before you apply. If you have a pre-existing condition, you may want to look for a “guaranteed-issue” policy, but be prepared to pay much higher premiums. ",[3652],{"type":79,"attrs":3653},{"color":81},{"text":3655,"type":76,"marks":3656},"  ",[3657,3658],{"type":820},{"type":79,"attrs":3659},{"color":91},{"type":105,"attrs":3661,"content":3662},{"level":123},[3663],{"text":3664,"type":76,"marks":3665},"If you die outside of the term, you won’t receive a death benefit.",[3666],{"type":79,"attrs":3667},{"color":81},{"type":72,"content":3669},[3670],{"text":3671,"type":76,"marks":3672},"Term life policies have specific, rigid term lengths. If your death occurs outside these parameters, you will not receive a death benefit. If you reach the end of the term, it is important to renew your policy quickly to avoid any lapse in coverage.",[3673],{"type":79,"attrs":3674},{"color":81},{"type":105,"attrs":3676,"content":3677},{"level":107},[3678],{"text":3679,"type":76,"marks":3680},"Types of term life insurance",[3681,3682],{"type":820},{"type":79,"attrs":3683},{"color":81},{"type":72,"content":3685},[3686,3691,3700],{"text":3687,"type":76,"marks":3688},"Before you shop around with different life insurance companies, first educate yourself on the ",[3689],{"type":79,"attrs":3690},{"color":81},{"text":3692,"type":76,"marks":3693},"different kinds of policies",[3694,3697,3699],{"type":188,"attrs":3695},{"href":3696,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/how-term-life-works",{"type":79,"attrs":3698},{"color":91},{"type":196},{"text":3701,"type":76,"marks":3702}," available. Different policies carry different term lengths and payment structures. Here’s how to figure out which life insurance option is best for you.",[3703],{"type":79,"attrs":3704},{"color":91},{"type":72,"content":3706},[3707,3713],{"text":3708,"type":76,"marks":3709},"Level premium",[3710,3711],{"type":820},{"type":79,"attrs":3712},{"color":81},{"text":3714,"type":76,"marks":3715},": Also referred to as “level term,” this is one of the more common types of term life insurance. With this kind of coverage, your premium will remain the same for the duration of the policy. That can make these types of policies easier to work into your regular budget, since your rate won’t change over time. ",[3716],{"type":79,"attrs":3717},{"color":91},{"type":72,"content":3719},[3720,3726],{"text":3721,"type":76,"marks":3722},"Yearly renewable term",[3723,3724],{"type":820},{"type":79,"attrs":3725},{"color":81},{"text":3727,"type":76,"marks":3728},": A yearly or annual renewable-term policy covers you for a year at a time. This type of life insurance coverage gives you the option to renew your policy every 12 months without a medical exam. However, each renewal comes with a premium increase. Yearly renewable term policies can look tempting because they start out with lower premiums than level term policies do. However, they often end up more expensive in the long run because of the annual premium increases. ",[3729],{"type":79,"attrs":3730},{"color":91},{"type":72,"content":3732},[3733,3739,3744,3753],{"text":3734,"type":76,"marks":3735},"Return of premium",[3736,3737],{"type":820},{"type":79,"attrs":3738},{"color":81},{"text":3740,"type":76,"marks":3741},": With this type of term policy, you will receive a payout of all or a portion of your premiums if you live to the end of the policy term. However, you can expect premiums to be much higher (two to four times higher) than they would be with a level term policy. Additionally, if you ",[3742],{"type":79,"attrs":3743},{"color":91},{"text":3745,"type":76,"marks":3746},"allow the policy to lapse",[3747,3750,3752],{"type":188,"attrs":3748},{"href":3749,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.policygenius.com/life-insurance/what-is-a-life-insurance-policy-lapse/",{"type":79,"attrs":3751},{"color":91},{"type":196},{"text":3754,"type":76,"marks":3755},", you may only receive back a portion of the premiums, if anything at all.",[3756],{"type":79,"attrs":3757},{"color":91},{"type":72,"content":3759},[3760,3766],{"text":3761,"type":76,"marks":3762},"Guaranteed issue",[3763,3764],{"type":820},{"type":79,"attrs":3765},{"color":81},{"text":3767,"type":76,"marks":3768},": As the name indicates, you cannot be turned down for this type of life insurance. You won’t have to take a medical exam, and the insurance provider typically asks very few — if any — health questions. Because this type of policy is available to riskier candidates, it typically comes with higher premiums and provides less coverage than other policy types. Additionally, most brokers won’t pay the full death benefit unless the insured lives for two or three years after the policy is created. So, if a policyholder passes away suddenly within those first years  — even from natural causes — their beneficiaries may not get the funds they need. ",[3769],{"type":79,"attrs":3770},{"color":91},{"type":105,"attrs":3772,"content":3773},{"level":107},[3774],{"text":3775,"type":76,"marks":3776},"How much does term life insurance cost?",[3777,3778],{"type":820},{"type":79,"attrs":3779},{"color":81},{"type":72,"content":3781},[3782,3787,3796],{"text":3783,"type":76,"marks":3784},"Term life insurance is usually less expensive than whole life insurance. Because term life insurance only lasts for a specific number of years, it isn’t uncommon to see term life premiums ",[3785],{"type":79,"attrs":3786},{"color":81},{"text":3788,"type":76,"marks":3789},"five to fifteen times lower",[3790,3793,3795],{"type":188,"attrs":3791},{"href":3792,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/term-life-vs-whole-life-5075430",{"type":79,"attrs":3794},{"color":91},{"type":196},{"text":3797,"type":76,"marks":3798}," than whole life policies with the same coverage amount. However, there’s still some variability within term policies. To find a good price, you need to understand what factors determine the cost. These include:",[3799],{"type":79,"attrs":3800},{"color":91},{"type":145,"content":3802},[3803,3818,3833,3862],{"type":148,"content":3804},[3805],{"type":72,"content":3806},[3807,3813],{"text":3808,"type":76,"marks":3809},"Your health",[3810,3811],{"type":820},{"type":79,"attrs":3812},{"color":81},{"text":3814,"type":76,"marks":3815},": Your health is one of the biggest factors insurance providers use to determine your premiums. Because healthier people are at lower risk of dying, insurance providers tend to offer them lower premiums. To evaluate your health, insurance agents will ask you about your medical history and health habits and may request a medical exam. Family history — especially related to cancer, diabetes, alcohol dependence, or heart disease — may also impact the way issuers determine your personal health risk. ",[3816],{"type":79,"attrs":3817},{"color":91},{"type":148,"content":3819},[3820],{"type":72,"content":3821},[3822,3828],{"text":3823,"type":76,"marks":3824},"Your age",[3825,3826],{"type":820},{"type":79,"attrs":3827},{"color":91},{"text":3829,"type":76,"marks":3830},": Age also affects the underwriting for your loan policy. The older you are, the more likely it is that an insurer will have to pay out on your policy, so insurance providers almost always charge older policyholders higher premiums. This is why it can be advantageous to take out a policy when you’re still young. ",[3831],{"type":79,"attrs":3832},{"color":91},{"type":148,"content":3834},[3835],{"type":72,"content":3836},[3837,3843,3848,3857],{"text":3838,"type":76,"marks":3839},"Your coverage amount",[3840,3841],{"type":820},{"type":79,"attrs":3842},{"color":91},{"text":3844,"type":76,"marks":3845},": Your coverage amount — i.e., the payout you’ll receive in the event of death — will also determine how high your premiums are. ",[3846],{"type":79,"attrs":3847},{"color":91},{"text":3849,"type":76,"marks":3850},"Average coverage amounts",[3851,3854,3856],{"type":188,"attrs":3852},{"href":3853,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/rates",{"type":79,"attrs":3855},{"color":91},{"type":196},{"text":3858,"type":76,"marks":3859}," range from $250,000 to $1,000,000. The higher your coverage amount, the higher your premium payments will be.  ",[3860],{"type":79,"attrs":3861},{"color":91},{"type":148,"content":3863},[3864],{"type":72,"content":3865},[3866,3872],{"text":3867,"type":76,"marks":3868},"Your term length: ",[3869,3870],{"type":820},{"type":79,"attrs":3871},{"color":91},{"text":3873,"type":76,"marks":3874},"Typical term life insurance policies range from 10 to 30 years. If you select a policy with a longer term length, you’ll be paying into the plan for longer. Because of this, your individual premiums will be lower.",[3875],{"type":79,"attrs":3876},{"color":91},{"type":105,"attrs":3878,"content":3879},{"level":107},[3880],{"text":3881,"type":76,"marks":3882},"How much life insurance coverage do I need? ",[3883,3884],{"type":820},{"type":79,"attrs":3885},{"color":81},{"type":72,"content":3887},[3888,3893,3901],{"text":3889,"type":76,"marks":3890},"Determining ",[3891],{"type":79,"attrs":3892},{"color":81},{"text":3894,"type":76,"marks":3895},"how much life insurance",[3896,3898,3900],{"type":188,"attrs":3897},{"href":3696,"uuid":91,"anchor":91,"target":91,"linktype":192},{"type":79,"attrs":3899},{"color":91},{"type":196},{"text":3902,"type":76,"marks":3903}," you need depends on your personal situation and timeline. There are a few methods you can use to figure out what you need:",[3904],{"type":79,"attrs":3905},{"color":91},{"type":145,"content":3907},[3908,3923,3938,3953],{"type":148,"content":3909},[3910],{"type":72,"content":3911},[3912,3918],{"text":3913,"type":76,"marks":3914},"Multiply your salary by 10: ",[3915,3916],{"type":820},{"type":79,"attrs":3917},{"color":81},{"text":3919,"type":76,"marks":3920},"This is one of the simplest ways to determine a good life insurance threshold. However, if you have children, this method may not account for added expenses such as college tuition.",[3921],{"type":79,"attrs":3922},{"color":91},{"type":148,"content":3924},[3925],{"type":72,"content":3926},[3927,3933],{"text":3928,"type":76,"marks":3929},"Multiply your salary by 10, then add college costs: ",[3930,3931],{"type":820},{"type":79,"attrs":3932},{"color":91},{"text":3934,"type":76,"marks":3935},"Adding $100,000 to $150,000 per child for college expenses (on top of the salary multiplier) can give your kids some extra financial cushion and help them afford a college education.",[3936],{"type":79,"attrs":3937},{"color":91},{"type":148,"content":3939},[3940],{"type":72,"content":3941},[3942,3948],{"text":3943,"type":76,"marks":3944},"Use the DIME formula: ",[3945,3946],{"type":820},{"type":79,"attrs":3947},{"color":91},{"text":3949,"type":76,"marks":3950},"The debt, income, mortgage, and education (DIME) method accounts for additional financial obligations. With this method, you first determine the amount you expect to pay annually toward your mortgage, debt payments, and any tuition. Then, add these on top of your salary multiplier to calculate your total coverage. ",[3951],{"type":79,"attrs":3952},{"color":91},{"type":148,"content":3954},[3955],{"type":72,"content":3956},[3957,3963],{"text":3958,"type":76,"marks":3959},"Calculate your lifetime earning potential:",[3960,3961],{"type":820},{"type":79,"attrs":3962},{"color":91},{"text":3964,"type":76,"marks":3965}," This method considers what you’re making now, as well as what you expect to make down the road. This calculation changes based on age, but you can get a rough illustration in the table below:",[3966],{"type":79,"attrs":3967},{"color":91},{"type":69,"content":3969},[3970],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": \"651798208\"}-->",{"lg":806,"md":18,"sm":806,"_uid":3974,"cols":806,"bloks":3975,"alignSelf":802,"component":803,"_editable":4001},"5277645c-7102-4a2e-9059-77ece298cfd1",[3976],{"id":810,"_uid":3977,"fixed":797,"title":3978,"classes":821,"maxWidth":18,"subtitle":3984,"component":825,"titleClasses":826,"mobileClasses":827,"backgroundColor":828,"subtitleClasses":829,"checkYourRateBtn":3987,"_editable":4000},"56f93595-4560-4a1d-addd-e6b8575e2ad3",{"type":69,"content":3979},[3980],{"type":72,"content":3981},[3982],{"text":3983,"type":76},"Search and compare to get a low rate and save.",{"type":69,"content":3985},[3986],{"type":72},[3988],{"url":3989,"_uid":3991,"icon":3992,"text":3993,"color":839,"sizing":3994,"classes":850,"rounded":45,"outlined":45,"component":851,"textColor":828,"hoverBgColor":828,"mobileClasses":852,"hoverTextColor":839,"navigationType":3998,"_editable":3999},{"id":18,"url":3990,"linktype":192,"fieldtype":834,"cached_url":3990},"https://www.leaplife.com/partner/navientlifeinsurance/life-insurance/","b85a45b7-57da-4e6f-b680-ef9da79ce85d",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":91,"copyright":91,"fieldtype":837},"Check It Out",[3995],{"_uid":3996,"width":843,"height":844,"fontSize":845,"component":846,"mobileWidth":847,"mobileHeight":844,"fontSizeMobile":848,"_editable":3997},"1431aed2-aef3-4868-8695-d3db1b068b18","\u003C!--#storyblok#{\"name\": \"buttonSizing\", \"space\": \"157494\", \"uid\": \"1431aed2-aef3-4868-8695-d3db1b068b18\", \"id\": \"651798208\"}-->",[],"\u003C!--#storyblok#{\"name\": \"CheckYourRateBtn\", \"space\": \"157494\", \"uid\": \"b85a45b7-57da-4e6f-b680-ef9da79ce85d\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"BlogCTA\", \"space\": \"157494\", \"uid\": \"56f93595-4560-4a1d-addd-e6b8575e2ad3\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"5277645c-7102-4a2e-9059-77ece298cfd1\", \"id\": \"651798208\"}-->",{"lg":60,"md":60,"sm":61,"_uid":4003,"cols":61,"bloks":4004,"classes":4112,"alignSelf":4096,"component":803,"_editable":4113},"e229c45d-68a1-4dee-8aad-9b0bc6074feb",[4005],{"_uid":4006,"table":4007,"component":4094,"tableWidth":4095,"rowCellAlign":4096,"footerContent":4097,"includeFooter":797,"footerRichText":4098,"headerCellAlign":4096,"_editable":4111},"a325b247-a33b-48e8-bd2f-9fea86e97f63",{"tbody":4008,"thead":4083,"fieldtype":4093},[4009,4023,4035,4047,4059,4071],{"_uid":4010,"body":4011,"component":4021,"_editable":4022},"e33c689f-1e2e-4a30-9570-2121fb0dbfc7",[4012,4017],{"_uid":4013,"value":4014,"component":4015,"_editable":4016},"4ff79c24-b433-425a-aaf7-3e624f8f52a2","18-40","_table_col","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"4ff79c24-b433-425a-aaf7-3e624f8f52a2\", \"id\": \"651798208\"}-->",{"_uid":4018,"value":4019,"component":4015,"_editable":4020},"7c1df32d-9954-4ce8-bb64-dcf17cf88eb4","30 times income","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"7c1df32d-9954-4ce8-bb64-dcf17cf88eb4\", \"id\": \"651798208\"}-->","_table_row","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"e33c689f-1e2e-4a30-9570-2121fb0dbfc7\", \"id\": \"651798208\"}-->",{"_uid":4024,"body":4025,"component":4021,"_editable":4034},"c4e3ad99-f201-4837-bd27-f5575bd95f42",[4026,4030],{"_uid":4027,"value":4028,"component":4015,"_editable":4029},"6b315c1e-1d5c-47d8-81a0-e0225c600eaa","41-50","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"6b315c1e-1d5c-47d8-81a0-e0225c600eaa\", \"id\": \"651798208\"}-->",{"_uid":4031,"value":4032,"component":4015,"_editable":4033},"aee77fdd-d97d-46f9-98ab-770dd6d791a7","20 times income","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"aee77fdd-d97d-46f9-98ab-770dd6d791a7\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"c4e3ad99-f201-4837-bd27-f5575bd95f42\", \"id\": \"651798208\"}-->",{"_uid":4036,"body":4037,"component":4021,"_editable":4046},"fe9ab8b8-f7e8-41f8-b8c0-f162263d86e3",[4038,4042],{"_uid":4039,"value":4040,"component":4015,"_editable":4041},"5fd1142f-3be2-4528-97aa-d3e5f7b2a8aa","51-60","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"5fd1142f-3be2-4528-97aa-d3e5f7b2a8aa\", \"id\": \"651798208\"}-->",{"_uid":4043,"value":4044,"component":4015,"_editable":4045},"eef4d04c-b14f-4da9-9761-d1b73d333847","15 times income","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"eef4d04c-b14f-4da9-9761-d1b73d333847\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"fe9ab8b8-f7e8-41f8-b8c0-f162263d86e3\", \"id\": \"651798208\"}-->",{"_uid":4048,"body":4049,"component":4021,"_editable":4058},"4dc8e557-36d7-4f79-b09b-cee72ff9ace5",[4050,4054],{"_uid":4051,"value":4052,"component":4015,"_editable":4053},"1ae8583e-7dc9-437f-bba2-991a4d995361","61-65","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"1ae8583e-7dc9-437f-bba2-991a4d995361\", \"id\": \"651798208\"}-->",{"_uid":4055,"value":4056,"component":4015,"_editable":4057},"f4ad43ea-4d42-4a87-9374-720dc461cf64","10 times income","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"f4ad43ea-4d42-4a87-9374-720dc461cf64\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"4dc8e557-36d7-4f79-b09b-cee72ff9ace5\", \"id\": \"651798208\"}-->",{"_uid":4060,"body":4061,"component":4021,"_editable":4070},"1f6555dd-c46d-41f6-9242-5f1b489b6b8d",[4062,4066],{"_uid":4063,"value":4064,"component":4015,"_editable":4065},"c6fd72cd-d891-4a1a-9626-527635a8b68e","66-70","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"c6fd72cd-d891-4a1a-9626-527635a8b68e\", \"id\": \"651798208\"}-->",{"_uid":4067,"value":4068,"component":4015,"_editable":4069},"18357d7e-e5f4-4ce8-920a-82b05f0f25f9","1 times net worth","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"18357d7e-e5f4-4ce8-920a-82b05f0f25f9\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"1f6555dd-c46d-41f6-9242-5f1b489b6b8d\", \"id\": \"651798208\"}-->",{"_uid":4072,"body":4073,"component":4021,"_editable":4082},"b73f70fa-529c-4572-bd36-aa7eaa81c02b",[4074,4078],{"_uid":4075,"value":4076,"component":4015,"_editable":4077},"3e30046c-9315-4cf7-95b8-5593b427b2ab","71-75","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"3e30046c-9315-4cf7-95b8-5593b427b2ab\", \"id\": \"651798208\"}-->",{"_uid":4079,"value":4080,"component":4015,"_editable":4081},"cfd17eef-16b9-4e34-bac2-d9159f5dce05","0.5 times net worth","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"cfd17eef-16b9-4e34-bac2-d9159f5dce05\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"b73f70fa-529c-4572-bd36-aa7eaa81c02b\", \"id\": \"651798208\"}-->",[4084,4089],{"_uid":4085,"value":4086,"component":4087,"_editable":4088},"47e96c34-437b-41cf-af5e-f15013974fdc","Age","_table_head","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"47e96c34-437b-41cf-af5e-f15013974fdc\", \"id\": \"651798208\"}-->",{"_uid":4090,"value":4091,"component":4087,"_editable":4092},"77f6841e-e966-47e8-9a99-ed0d6226872f","Maximum Life Insurance","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"77f6841e-e966-47e8-9a99-ed0d6226872f\", \"id\": \"651798208\"}-->","table","TableComponent","350px","center","Source: Guardian",{"type":69,"content":4099},[4100],{"type":72,"content":4101},[4102,4104],{"text":4103,"type":76},"Source: ",{"text":4105,"type":76,"marks":4106},"Guardian",[4107],{"type":188,"attrs":4108},{"href":4109,"uuid":91,"anchor":91,"custom":4110,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/how-term-life-works#How%20much","[object Object]","\u003C!--#storyblok#{\"name\": \"TableComponent\", \"space\": \"157494\", \"uid\": \"a325b247-a33b-48e8-bd2f-9fea86e97f63\", \"id\": \"651798208\"}-->","center-content","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"e229c45d-68a1-4dee-8aad-9b0bc6074feb\", \"id\": \"651798208\"}-->",{"lg":60,"md":60,"sm":61,"_uid":4115,"cols":61,"bloks":4116,"alignSelf":802,"component":803,"_editable":4405},"2bd54e19-1519-4581-a3cd-36b567949c3a",[4117],{"_uid":4118,"color":66,"classes":67,"content":18,"richText":4119,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":4401,"_editable":4404},"1c7bce69-59db-42fa-bf55-3b2916c6425c",{"type":69,"content":4120},[4121,4130,4137,4218,4227,4234,4242,4276,4284,4305,4313,4334,4342,4349,4358,4365,4384,4392],{"type":105,"attrs":4122,"content":4123},{"level":107},[4124],{"text":4125,"type":76,"marks":4126},"How getting term life insurance works",[4127,4128],{"type":820},{"type":79,"attrs":4129},{"color":81},{"type":72,"content":4131},[4132],{"text":4133,"type":76,"marks":4134},"Essentially, a term life insurance policy is a contract between the policyholder and the insurance company. The specific term (typically 10 to 30 years) dictates how long that contract will last. Here’s how to go about finding a policy:",[4135],{"type":79,"attrs":4136},{"color":81},{"type":4138,"attrs":4139,"content":4142},"ordered_list",{"order":4140},{"order":4141},1,[4143,4158,4173,4188,4203],{"type":148,"content":4144},[4145],{"type":72,"content":4146},[4147,4153],{"text":4148,"type":76,"marks":4149},"Start shopping around:",[4150,4151],{"type":820},{"type":79,"attrs":4152},{"color":81},{"text":4154,"type":76,"marks":4155}," Shop around between multiple providers to see what kinds of life insurance rates they can offer you. Some may require you to fill out a form or questionnaire before they can give you a life insurance quote.",[4156],{"type":79,"attrs":4157},{"color":91},{"type":148,"content":4159},[4160],{"type":72,"content":4161},[4162,4168],{"text":4163,"type":76,"marks":4164},"Compare life insurance quotes: ",[4165,4166],{"type":820},{"type":79,"attrs":4167},{"color":91},{"text":4169,"type":76,"marks":4170},"When you’ve checked with a handful of providers, you can then compare quotes and choose the company that will give you the best deal.",[4171],{"type":79,"attrs":4172},{"color":91},{"type":148,"content":4174},[4175],{"type":72,"content":4176},[4177,4183],{"text":4178,"type":76,"marks":4179},"Fill out an application:",[4180,4181],{"type":820},{"type":79,"attrs":4182},{"color":91},{"text":4184,"type":76,"marks":4185}," When you’ve made your final choice, you’ll then fill out a formal application. During this process, the insurance company will find out more about you. Insurance agents may request medical records or schedule a medical exam to assess your health. They may also want to know more about your occupation and hobbies. Someone who works as a lumberjack will certainly carry more occupational risk than someone who works as an accountant, for example. Likewise, if your hobbies include dangerous sports like riding motorcycles or scuba diving, you may see higher rates.",[4186],{"type":79,"attrs":4187},{"color":91},{"type":148,"content":4189},[4190],{"type":72,"content":4191},[4192,4198],{"text":4193,"type":76,"marks":4194},"Choose your policy details: ",[4195,4196],{"type":820},{"type":79,"attrs":4197},{"color":91},{"text":4199,"type":76,"marks":4200},"Now you’ll choose your term length and amount of coverage. These numbers will depend on your age, income, and specific needs.",[4201],{"type":79,"attrs":4202},{"color":91},{"type":148,"content":4204},[4205],{"type":72,"content":4206},[4207,4213],{"text":4208,"type":76,"marks":4209},"Name your beneficiaries: ",[4210,4211],{"type":820},{"type":79,"attrs":4212},{"color":91},{"text":4214,"type":76,"marks":4215},"Beneficiaries are the individuals who will receive the payout if you pass away before the end of the term window. Usually these are the same people you list as dependents on your taxes, but they don’t have to be. You can either choose a single person — such as a spouse, sibling, or child — or you can choose to divide the death benefit between several beneficiaries. ",[4216],{"type":79,"attrs":4217},{"color":91},{"type":105,"attrs":4219,"content":4220},{"level":107},[4221],{"text":4222,"type":76,"marks":4223},"Other types of life insurance",[4224,4225],{"type":820},{"type":79,"attrs":4226},{"color":81},{"type":72,"content":4228},[4229],{"text":4230,"type":76,"marks":4231},"There are many different types of life insurance. Here are a few of the alternatives to term life insurance:",[4232],{"type":79,"attrs":4233},{"color":81},{"type":105,"attrs":4235,"content":4236},{"level":123},[4237],{"text":4238,"type":76,"marks":4239},"Whole life ",[4240],{"type":79,"attrs":4241},{"color":81},{"type":72,"content":4243},[4244,4249,4258,4263,4267,4271],{"text":4245,"type":76,"marks":4246},"A ",[4247],{"type":79,"attrs":4248},{"color":81},{"text":4250,"type":76,"marks":4251},"whole life insurance",[4252,4255,4257],{"type":188,"attrs":4253},{"href":4254,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/whole-life/how-it-works",{"type":79,"attrs":4256},{"color":91},{"type":196},{"text":4259,"type":76,"marks":4260}," policy carries lifetime coverage as long as you make your payments. Although the payment amounts remain the same for life, they are typically more expensive than term life insurance premiums — even on a policy that provides the same amount of coverage. ",[4261],{"type":79,"attrs":4262},{"color":91},{"type":1599,"marks":4264},[4265],{"type":79,"attrs":4266},{"color":91},{"type":1599,"marks":4268},[4269],{"type":79,"attrs":4270},{"color":91},{"text":4272,"type":76,"marks":4273},"Unlike term life, whole life policies can accumulate cash over time, and you can borrow the funds as needed. However, if those funds go unrepaid, the policy’s value and death benefit will decrease accordingly. ",[4274],{"type":79,"attrs":4275},{"color":91},{"type":105,"attrs":4277,"content":4278},{"level":123},[4279],{"text":4280,"type":76,"marks":4281},"Universal life",[4282],{"type":79,"attrs":4283},{"color":81},{"type":72,"content":4285},[4286,4291,4300],{"text":4287,"type":76,"marks":4288},"Universal life insurance is similar to whole life insurance in that they both provide lifetime protection while building cash value. However, a universal life policy ",[4289],{"type":79,"attrs":4290},{"color":81},{"text":4292,"type":76,"marks":4293},"is more flexible",[4294,4297,4299],{"type":188,"attrs":4295},{"href":4296,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.guardianlife.com/life-insurance/universal-life",{"type":79,"attrs":4298},{"color":91},{"type":196},{"text":4301,"type":76,"marks":4302}," in that you have the option to raise or lower your premium as needed. This can make it less expensive than whole life insurance. However, if you make lower payments for too long, this can negatively impact the policy’s death benefit and cash growth potential.  ",[4303],{"type":79,"attrs":4304},{"color":91},{"type":105,"attrs":4306,"content":4307},{"level":123},[4308],{"text":4309,"type":76,"marks":4310},"Variable life",[4311],{"type":79,"attrs":4312},{"color":81},{"type":72,"content":4314},[4315,4320,4329],{"text":4316,"type":76,"marks":4317},"Variable life insurance is another type of permanent life insurance: as long as you pay your premiums, you’re covered for your entire life. However, ",[4318],{"type":79,"attrs":4319},{"color":81},{"text":4321,"type":76,"marks":4322},"variable life policies",[4323,4326,4328],{"type":188,"attrs":4324},{"href":4325,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.valuepenguin.com/life-insurance/variable-life-insurance",{"type":79,"attrs":4327},{"color":91},{"type":196},{"text":4330,"type":76,"marks":4331}," are unique in that they give you the option to reinvest any accumulated cash value. You may choose to reinvest the money into stocks, bonds, or an index. Because the cash is invested, variable life policies can be riskier and may carry higher fees than other types of life insurance. ",[4332],{"type":79,"attrs":4333},{"color":91},{"type":105,"attrs":4335,"content":4336},{"level":123},[4337],{"text":4338,"type":76,"marks":4339},"Indexed universal life",[4340],{"type":79,"attrs":4341},{"color":81},{"type":72,"content":4343},[4344],{"text":4345,"type":76,"marks":4346},"Indexed universal life insurance is a permanent life insurance policy that pays interest based on the fluctuation of the stock market. Unlike variable life insurance, you can’t invest your cash value into stocks or bonds. Instead, you’re tied to a specific stock market index. That means your funds will be subject to the volatility of the stock market as a whole. (However, there is usually a floor or cap to minimize the impact of large swings.) ",[4347],{"type":79,"attrs":4348},{"color":81},{"type":105,"attrs":4350,"content":4351},{"level":107},[4352],{"text":4353,"type":76,"marks":4354},"Explore term life insurance on Navient Marketplace",[4355,4356],{"type":820},{"type":79,"attrs":4357},{"color":81},{"type":72,"content":4359},[4360],{"text":4361,"type":76,"marks":4362},"If you’re the sole or primary breadwinner in your family, term life insurance can be an affordable way to protect your dependents against financial destitution. With term coverage, you can elect to be covered for a specific period of time and cancel your policy any time you wish. This makes it one of the most flexible options for life insurance on the market.",[4363],{"type":79,"attrs":4364},{"color":81},{"type":72,"content":4366},[4367,4372,4379],{"text":4368,"type":76,"marks":4369},"If you’re ready to shop for term policies — or just get a feel for what life insurance products are available to you — head over to ",[4370],{"type":79,"attrs":4371},{"color":91},{"text":739,"type":76,"marks":4373},[4374,4376,4378],{"type":188,"attrs":4375},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":4377},{"color":91},{"type":196},{"text":4380,"type":76,"marks":4381},". This comprehensive platform makes it easy to compare different providers. Click through, browse your options, and find the one that meets your life insurance needs. ",[4382],{"type":79,"attrs":4383},{"color":91},{"type":72,"content":4385},[4386],{"text":761,"type":76,"marks":4387},[4388,4390],{"type":86,"attrs":4389},{"class":765},{"type":79,"attrs":4391},{"color":81},{"type":72,"content":4393},[4394],{"text":4395,"type":76,"marks":4396},"Information in this blog, including the rates advertised, are current as of 04/27/2023 and subject to change. ",[4397,4399],{"type":86,"attrs":4398},{"class":765},{"type":79,"attrs":4400},{"color":81},{"type":69,"content":4402},[4403],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"1c7bce69-59db-42fa-bf55-3b2916c6425c\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"2bd54e19-1519-4581-a3cd-36b567949c3a\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"Row\", \"space\": \"157494\", \"uid\": \"0737a92f-e416-438d-b8db-1c0e86499923\", \"id\": \"651798208\"}-->",[],"\u003C!--#storyblok#{\"name\": \"Container\", \"space\": \"157494\", \"uid\": \"222843d6-4c0d-4ac3-aa5f-7f579c49c5fe\", \"id\": \"651798208\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":3295,"cols":18,"height":18,"classes":865,"columns":4410,"justify":18,"maxWidth":882,"component":883,"colClasses":884,"rowClasses":18,"mobileClasses":885,"backgroundColor":18,"backgroundImage":4419,"containerClasses":18,"useBackgroundImage":45,"_editable":4420},[4411],{"_uid":3298,"component":869,"backToTopBtn":4412,"_editable":4418},[4413],{"url":4414,"_uid":3302,"icon":4415,"text":876,"color":32,"event":18,"sizing":4416,"classes":878,"rounded":45,"outlined":45,"component":879,"textColor":828,"hoverBgColor":828,"mobileClasses":18,"hoverTextColor":839,"navigationType":18,"_editable":4417},{"id":18,"url":18,"linktype":873,"fieldtype":834,"cached_url":18},{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798208\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798208\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798208\"}-->","Insurance","https://www.marketplace.navient.com/blog/benefits-of-term-life-insurance/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798208\"}-->","benefits-of-term-life-insurance","navient_marketplace/blog/benefits-of-term-life-insurance",40,[],"3be6acdb-2e95-491d-9b06-ec5d63099498","2023-05-10T18:29:46.407Z",[],{"name":4432,"created_at":4433,"published_at":4434,"updated_at":4435,"id":4436,"uuid":4437,"content":4438,"slug":5169,"full_slug":5170,"sort_by_date":91,"position":5171,"tag_list":5172,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":5173,"first_published_at":5174,"release_id":91,"lang":899,"path":91,"alternates":5175,"default_full_slug":91,"translated_slugs":91},"What is a High-Yield Savings Account?","2025-04-07T18:31:38.064Z","2025-12-26T13:45:15.878Z","2025-12-26T13:45:15.950Z",651798210,"8f51e816-5b87-4a68-9eb1-a804ecebb9d9",{"seo":4439,"_uid":1699,"body":4442,"author":49,"category":2453,"featured":45,"component":889,"canonicalTag":5167,"_editable":5168},{"_uid":1696,"title":4440,"plugin":17,"og_image":18,"og_title":18,"description":4441,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What is a High-Yield Savings Account? - Navient Marketplace","What is a high-yield savings account? It's a savings account that offers a higher APY than traditional savings accounts. Is it right for you? Find out here.",[4443,4451,5155],{"id":23,"_uid":2476,"image":4444,"intro":4445,"author":27,"classes":4446,"category":18,"featured":45,"blogTitle":4432,"component":47,"imageLink":4449,"blendImage":45,"authorRoute":49,"publishedDate":2487,"backgroundColor":51,"_editable":4450},"//a.storyblok.com/f/110029/3500x2188/7450d34be0/what-is-a-high-yield-savings-account.svg","A high-yield savings account is one of the best tools for reaching your short-term financial goals.",[4447],{"_uid":2482,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":4448},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798210\"}-->","/images/what-is-a-high-yield-savings-account.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798210\"}-->",{"_uid":2490,"bloks":4452,"classes":859,"component":860,"mobileClasses":18,"containerContent":5153,"_editable":5154},[4453],{"_uid":2493,"bloks":4454,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":5152},[4455,5126],{"lg":60,"md":60,"sm":61,"_uid":2496,"cols":61,"bloks":4456,"alignSelf":802,"component":803,"_editable":5125},[4457],{"_uid":2499,"color":66,"classes":67,"content":18,"richText":4458,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":5121,"_editable":5124},{"type":69,"content":4459},[4460,4468,4489,4517,4526,4547,4556,4633,4642,4704,4713,4720,4728,4735,4742,4798,4805,4813,4847,4854,4861,4869,4876,4884,4891,4938,4946,4953,4960,4967,4975,4982,5017,5025,5032,5040,5047,5055,5062,5069,5077,5084,5103,5112],{"type":72,"content":4461},[4462],{"text":789,"type":76,"marks":4463},[4464,4466],{"type":86,"attrs":4465},{"class":765},{"type":79,"attrs":4467},{"color":81},{"type":72,"content":4469},[4470,4475,4484],{"text":4471,"type":76,"marks":4472},"If your finances are feeling the hit from the COVID-19 pandemic — and subsequent recession — you’re not alone. Most folks would say that if there was an easy option to grow their savings, they’d take it in a heartbeat. Yet, ",[4473],{"type":79,"attrs":4474},{"color":81},{"text":4476,"type":76,"marks":4477},"research from Insider Intelligence",[4478,4481,4483],{"type":188,"attrs":4479},{"href":4480,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.insiderintelligence.com/content/savers-larger-banks-higher-yielding-accounts",{"type":79,"attrs":4482},{"color":91},{"type":196},{"text":4485,"type":76,"marks":4486}," shows that more than half of Americans are missing out on additional earnings by not utilizing high-yield accounts. ",[4487],{"type":79,"attrs":4488},{"color":91},{"type":72,"content":4490},[4491,4496,4505,4510,4512],{"text":4492,"type":76,"marks":4493},"Thanks to recent Federal Reserve interest rate increases, the average annual percentage yield (APY) on high-yield savings accounts has gone up — from 0.5% in early 2022 to more than 3% at the end of 2022. But not everyone’s taking advantage. According to a ",[4494],{"type":79,"attrs":4495},{"color":81},{"text":4497,"type":76,"marks":4498},"2021 survey from the Federal Deposit Insurance Corporation (FDIC)",[4499,4502,4504],{"type":188,"attrs":4500},{"href":4501,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fdic.gov/analysis/household-survey/index.html",{"type":79,"attrs":4503},{"color":91},{"type":196},{"text":4506,"type":76,"marks":4507},", nearly 6 million households didn’t have a savings account at all. And NextAdvisor’s research shows that only 21% of Americans report taking advantage of high-interest savings accounts — something many ",[4508],{"type":79,"attrs":4509},{"color":91},{"text":4511,"type":76},"personal finance experts believe",{"text":4513,"type":76,"marks":4514}," is a missed opportunity. Here’s why. ",[4515],{"type":79,"attrs":4516},{"color":91},{"type":105,"attrs":4518,"content":4519},{"level":107},[4520],{"text":4521,"type":76,"marks":4522},"What are high-yield savings accounts? ",[4523,4524],{"type":820},{"type":79,"attrs":4525},{"color":81},{"type":72,"content":4527},[4528,4533,4542],{"text":4529,"type":76,"marks":4530},"A high-yield savings account is one of the best tools for reaching your short-term financial goals. Essentially, it's a type of savings account that pays interest on the funds you deposit. The amount of interest you earn depends on the bank and your deposit balance, but high-yield savings accounts tend to pay ",[4531],{"type":79,"attrs":4532},{"color":81},{"text":4534,"type":76,"marks":4535},"15 to 25 times",[4536,4539,4541],{"type":188,"attrs":4537},{"href":4538,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fdic.gov/resources/bankers/national-rates/",{"type":79,"attrs":4540},{"color":91},{"type":196},{"text":4543,"type":76,"marks":4544}," more interest than traditional savings accounts. What’s more, high-yield savings accounts tend to be more reliable than investing your money in the stock market, for example, and more flexible than putting it away in a CD (Certificate of Deposit) account. If your goal is maximizing your returns in a low-risk environment where you can easily access your money at any time, a high-yield savings account may be for you. ",[4545],{"type":79,"attrs":4546},{"color":91},{"type":105,"attrs":4548,"content":4549},{"level":107},[4550],{"text":4551,"type":76,"marks":4552},"Benefits of a high-yield savings account ",[4553,4554],{"type":820},{"type":79,"attrs":4555},{"color":81},{"type":145,"content":4557},[4558,4573,4588,4603,4618],{"type":148,"content":4559},[4560],{"type":72,"content":4561},[4562,4568],{"text":4563,"type":76,"marks":4564},"High-yield savings accounts have higher interest rates than traditional savings accounts.",[4565,4566],{"type":820},{"type":79,"attrs":4567},{"color":81},{"text":4569,"type":76,"marks":4570}," When it comes to your savings, the higher the interest rate, the better. Most high-yield savings accounts boast interest rates up to 25 times higher than traditional accounts. And even an increase in a single percentage point can translate to a significant sum over the course of a year.",[4571],{"type":79,"attrs":4572},{"color":91},{"type":148,"content":4574},[4575],{"type":72,"content":4576},[4577,4583],{"text":4578,"type":76,"marks":4579},"High-yield savings accounts are flexible",[4580,4581],{"type":820},{"type":79,"attrs":4582},{"color":81},{"text":4584,"type":76,"marks":4585},". Unlike other accounts that offer high rates of return, a high-yield savings account doesn’t require you to lock your money in for a set term. For example, a CD account will offer similar interest rates, but will charge an early withdrawal fee if you take money out before the end of the term. A high-yield savings account is different in that there are no penalties if you make a withdrawal. (You may, however, be limited in the number of withdrawals and deposits that you can make over a set period of time.)",[4586],{"type":79,"attrs":4587},{"color":91},{"type":148,"content":4589},[4590],{"type":72,"content":4591},[4592,4598],{"text":4593,"type":76,"marks":4594},"High-yield savings accounts are better for meeting short-term savings goals.",[4595,4596],{"type":820},{"type":79,"attrs":4597},{"color":81},{"text":4599,"type":76,"marks":4600}," If you’re trying to make a big purchase within the next five or so years — like putting a down payment on a car or house — high-yield savings accounts represent a lower-risk alternative to other investment options, like stocks, which can lose value in that time.",[4601],{"type":79,"attrs":4602},{"color":91},{"type":148,"content":4604},[4605],{"type":72,"content":4606},[4607,4613],{"text":4608,"type":76,"marks":4609},"High-yield savings accounts are perfect for an emergency fund.",[4610,4611],{"type":820},{"type":79,"attrs":4612},{"color":81},{"text":4614,"type":76,"marks":4615}," A high-yield savings account is an ideal place to store funds that you don't need immediately, like an emergency fund. You'll earn interest on your money and be able to withdraw it at any time.",[4616],{"type":79,"attrs":4617},{"color":91},{"type":148,"content":4619},[4620],{"type":72,"content":4621},[4622,4628],{"text":4623,"type":76,"marks":4624},"High-yield savings accounts are great for storing a windfall",[4625,4626],{"type":820},{"type":79,"attrs":4627},{"color":81},{"text":4629,"type":76,"marks":4630},". When you get a tax return or a stimulus check, it can be tempting to spend it, even if you don’t have a pressing need. If there’s no expense that requires your immediate attention, why not put it in a high-yield savings account? When you do finally have a reason to spend it, there’s a chance it may have grown even bigger. ",[4631],{"type":79,"attrs":4632},{"color":91},{"type":105,"attrs":4634,"content":4635},{"level":107},[4636],{"text":4637,"type":76,"marks":4638},"Drawbacks of a high-yield savings account",[4639,4640],{"type":820},{"type":79,"attrs":4641},{"color":81},{"type":145,"content":4643},[4644,4659,4674,4689],{"type":148,"content":4645},[4646],{"type":72,"content":4647},[4648,4654],{"text":4649,"type":76,"marks":4650},"High-yield savings accounts are not ideal for everyday banking",[4651,4652],{"type":820},{"type":79,"attrs":4653},{"color":81},{"text":4655,"type":76,"marks":4656},". Federal law allows you to withdraw money from a high-yield savings account up to six times in a single month without paying fees. To avoid paying fees, your everyday cash is best stored in a checking account, while money you won’t need immediately, like an emergency fund, is better kept in a high-yield savings account.",[4657],{"type":79,"attrs":4658},{"color":91},{"type":148,"content":4660},[4661],{"type":72,"content":4662},[4663,4669],{"text":4664,"type":76,"marks":4665},"High-yield savings generally have stricter requirements than standard savings accounts",[4666,4667],{"type":820},{"type":79,"attrs":4668},{"color":81},{"text":4670,"type":76,"marks":4671},". Along with transfer and withdrawal limits, higher initial deposits and minimum balances are just a few examples of policies you aren’t likely to face with a traditional savings account.",[4672],{"type":79,"attrs":4673},{"color":91},{"type":148,"content":4675},[4676],{"type":72,"content":4677},[4678,4684],{"text":4679,"type":76,"marks":4680},"High-yield savings accounts are not the best for long-term goals.",[4681,4682],{"type":820},{"type":79,"attrs":4683},{"color":81},{"text":4685,"type":76,"marks":4686}," Though you’ll earn more interest than you will with a traditional savings account, interest earned in a high-yield savings account likely won’t even be enough to keep up with inflation. If you’re saving for retirement, for example, there are better investment vehicles out there.",[4687],{"type":79,"attrs":4688},{"color":91},{"type":148,"content":4690},[4691],{"type":72,"content":4692},[4693,4699],{"text":4694,"type":76,"marks":4695},"High-yield savings accounts are fluctuating.",[4696,4697],{"type":820},{"type":79,"attrs":4698},{"color":81},{"text":4700,"type":76,"marks":4701}," Interest rates aren't guaranteed. While your money is safe in a high-yield savings account, the bank can change your interest rate at any point. There are no federal regulations that protect you from a lower interest rate if rates go down, so you could earn less than advertised.",[4702],{"type":79,"attrs":4703},{"color":91},{"type":105,"attrs":4705,"content":4706},{"level":107},[4707],{"text":4708,"type":76,"marks":4709},"How does a high-yield savings account work? ",[4710,4711],{"type":820},{"type":79,"attrs":4712},{"color":81},{"type":72,"content":4714},[4715],{"text":4716,"type":76,"marks":4717},"Many financial services institutions offer high-yield savings accounts, including traditional banks, some credit unions, and online banks. For the most part, these accounts work just like traditional savings accounts: you can make direct deposits, withdraw cash, and manage your accounts through the bank’s website or mobile app. Where high-yield savings accounts differ is in the interest rates, which tend to be higher than those on regular savings accounts. High-yield savings accounts also have more restrictions on how often you can withdraw your money.  ",[4718],{"type":79,"attrs":4719},{"color":81},{"type":105,"attrs":4721,"content":4722},{"level":123},[4723],{"text":4724,"type":76,"marks":4725},"Opening a high-yield savings account",[4726],{"type":79,"attrs":4727},{"color":81},{"type":72,"content":4729},[4730],{"text":4731,"type":76,"marks":4732},"If your existing bank offers high-yield savings accounts, applying for one is simply a matter of logging into your online banking portal. The application process typically takes ten to fifteen minutes.",[4733],{"type":79,"attrs":4734},{"color":81},{"type":72,"content":4736},[4737],{"text":4738,"type":76,"marks":4739},"If you’re opening a high-yield savings account with a new bank, the application may take more time. You can either walk into a brick-and-mortar bank or apply for the account online. You’ll likely be asked to provide personal information and documents, including your:",[4740],{"type":79,"attrs":4741},{"color":81},{"type":145,"content":4743},[4744,4753,4762,4771,4780,4789],{"type":148,"content":4745},[4746],{"type":72,"content":4747},[4748],{"text":4749,"type":76,"marks":4750},"Legal name",[4751],{"type":79,"attrs":4752},{"color":81},{"type":148,"content":4754},[4755],{"type":72,"content":4756},[4757],{"text":4758,"type":76,"marks":4759},"Official identification document, such as a driver’s license",[4760],{"type":79,"attrs":4761},{"color":91},{"type":148,"content":4763},[4764],{"type":72,"content":4765},[4766],{"text":4767,"type":76,"marks":4768},"Social Security Number",[4769],{"type":79,"attrs":4770},{"color":91},{"type":148,"content":4772},[4773],{"type":72,"content":4774},[4775],{"text":4776,"type":76,"marks":4777},"Date of birth",[4778],{"type":79,"attrs":4779},{"color":91},{"type":148,"content":4781},[4782],{"type":72,"content":4783},[4784],{"text":4785,"type":76,"marks":4786},"Address",[4787],{"type":79,"attrs":4788},{"color":91},{"type":148,"content":4790},[4791],{"type":72,"content":4792},[4793],{"text":4794,"type":76,"marks":4795},"Primary bank account information",[4796],{"type":79,"attrs":4797},{"color":91},{"type":72,"content":4799},[4800],{"text":4801,"type":76,"marks":4802},"You may also be asked to make an opening deposit once your account is active.",[4803],{"type":79,"attrs":4804},{"color":81},{"type":105,"attrs":4806,"content":4807},{"level":123},[4808],{"text":4809,"type":76,"marks":4810},"Withdrawals and transfers",[4811],{"type":79,"attrs":4812},{"color":81},{"type":72,"content":4814},[4815,4820,4828,4833,4842],{"text":4816,"type":76,"marks":4817},"Some financial institutions require a minimum deposit of $100 or more to open a high-yield savings account. Once that’s done, you can withdraw cash or make electronic or wire transfers, but only up to six times per month. This is due to a federal law known as ",[4818],{"type":79,"attrs":4819},{"color":81},{"text":2848,"type":76,"marks":4821},[4822,4825,4827],{"type":188,"attrs":4823},{"href":4824,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.federalreserve.gov/boarddocs/supmanual/cch/int_depos.pdf",{"type":79,"attrs":4826},{"color":91},{"type":196},{"text":4829,"type":76,"marks":4830},". Regulation D was ",[4831],{"type":79,"attrs":4832},{"color":91},{"text":4834,"type":76,"marks":4835},"lifted during the Covid-19 pandemic",[4836,4839,4841],{"type":188,"attrs":4837},{"href":4838,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/this-government-regulation-restricts-how-often-you-can-move-money-out-of-your-savings-account-4589978",{"type":79,"attrs":4840},{"color":91},{"type":196},{"text":4843,"type":76,"marks":4844},", but some banks still adhere to the six-withdrawal limit. If you withdraw too often, the bank or credit union can convert your account into a checking account. ",[4845],{"type":79,"attrs":4846},{"color":91},{"type":105,"attrs":4848,"content":4849},{"level":123},[4850],{"text":1842,"type":76,"marks":4851},[4852],{"type":79,"attrs":4853},{"color":81},{"type":72,"content":4855},[4856],{"text":4857,"type":76,"marks":4858},"Annual Percentage Yield (APY) is the interest you earn on your money. Unlike with traditional bank accounts or online savings accounts, rates on high-yield accounts tend to exceed the national average. They also use a type of interest called compound interest. That means that any interest you make will be tacked onto the amount of money you initially deposited. You’ll then make future interest on that full amount. Compound interest is one of the best ways to grow your money fast. ",[4859],{"type":79,"attrs":4860},{"color":81},{"type":105,"attrs":4862,"content":4863},{"level":107},[4864],{"text":2993,"type":76,"marks":4865},[4866,4867],{"type":820},{"type":79,"attrs":4868},{"color":81},{"type":72,"content":4870},[4871],{"text":4872,"type":76,"marks":4873},"To find the best high-yield savings accounts, you’ll need to understand the nitty gritty of how they work. Here’s what to watch for. ",[4874],{"type":79,"attrs":4875},{"color":81},{"type":105,"attrs":4877,"content":4878},{"level":123},[4879],{"text":4880,"type":76,"marks":4881},"Interest rate",[4882],{"type":79,"attrs":4883},{"color":81},{"type":72,"content":4885},[4886],{"text":4887,"type":76,"marks":4888},"The higher the APY, the more money you earn on your savings. This is the most important factor in opening a high-yield account, so be sure to ask all the right questions. Here are a few of the big ones:",[4889],{"type":79,"attrs":4890},{"color":81},{"type":145,"content":4892},[4893,4902,4911,4920,4929],{"type":148,"content":4894},[4895],{"type":72,"content":4896},[4897],{"text":4898,"type":76,"marks":4899},"Have you shopped around with other financial institutions to make sure you’re getting the highest rate?",[4900],{"type":79,"attrs":4901},{"color":81},{"type":148,"content":4903},[4904],{"type":72,"content":4905},[4906],{"text":4907,"type":76,"marks":4908},"If you’re eyeing a high APY, have you read the fine print? Is it just a promotional rate that will expire? ",[4909],{"type":79,"attrs":4910},{"color":91},{"type":148,"content":4912},[4913],{"type":72,"content":4914},[4915],{"text":4916,"type":76,"marks":4917},"Will you need to maintain a certain minimum balance to earn those higher rates? ",[4918],{"type":79,"attrs":4919},{"color":91},{"type":148,"content":4921},[4922],{"type":72,"content":4923},[4924],{"text":4925,"type":76,"marks":4926},"What will your annual interest earnings actually be? ",[4927],{"type":79,"attrs":4928},{"color":91},{"type":148,"content":4930},[4931],{"type":72,"content":4932},[4933],{"text":4934,"type":76,"marks":4935},"How frequently is your interest compounded? ",[4936],{"type":79,"attrs":4937},{"color":91},{"type":105,"attrs":4939,"content":4940},{"level":123},[4941],{"text":4942,"type":76,"marks":4943},"Minimum balance requirements and initial deposit",[4944],{"type":79,"attrs":4945},{"color":81},{"type":72,"content":4947},[4948],{"text":4949,"type":76,"marks":4950},"Different banks have different opening deposit requirements. Many also require you to maintain a minimum sum within the account to keep it open. Make sure this is an amount you feel comfortable with, since going below the minimum threshold can trigger fees or lower your interest rate. ",[4951],{"type":79,"attrs":4952},{"color":81},{"type":105,"attrs":4954,"content":4955},{"level":123},[4956],{"text":1872,"type":76,"marks":4957},[4958],{"type":79,"attrs":4959},{"color":81},{"type":72,"content":4961},[4962],{"text":4963,"type":76,"marks":4964},"Another big consideration with high-yield accounts is fees. After all, what’s the point of earning more on your savings if you’re going to pay it all out in monthly fees? Look for high-yield savings accounts that don’t charge monthly maintenance fees. You’ll also want to look out for any monthly service fees the bank or credit union might charge for going below the minimum balance, exceeding the six-withdrawals limit, or going into overdraft.",[4965],{"type":79,"attrs":4966},{"color":81},{"type":105,"attrs":4968,"content":4969},{"level":123},[4970],{"text":4971,"type":76,"marks":4972},"Provider",[4973],{"type":79,"attrs":4974},{"color":81},{"type":72,"content":4976},[4977],{"text":4978,"type":76,"marks":4979},"A number of big national banks such as Marcus by Goldman Sachs, CapitalOne, and American Express all offer high-yield savings accounts. If you already bank with one of these providers, you might consider opening your new account with them. This can streamline your online banking and make it easier to see all your accounts in one place. ",[4980],{"type":79,"attrs":4981},{"color":81},{"type":72,"content":4983},[4984,4989,4998,5003,5012],{"text":4985,"type":76,"marks":4986},"If you’re unhappy with your current bank or think you can find a better interest rate elsewhere, however, it may be better to find a new provider. Make sure any financial institution you consider is a member of the ",[4987],{"type":79,"attrs":4988},{"color":81},{"text":4990,"type":76,"marks":4991},"FDIC",[4992,4995,4997],{"type":188,"attrs":4993},{"href":4994,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.fdic.gov",{"type":79,"attrs":4996},{"color":91},{"type":196},{"text":4999,"type":76,"marks":5000}," and/or ",[5001],{"type":79,"attrs":5002},{"color":91},{"text":5004,"type":76,"marks":5005},"National Credit Union Association",[5006,5009,5011],{"type":188,"attrs":5007},{"href":5008,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://ncua.gov",{"type":79,"attrs":5010},{"color":91},{"type":196},{"text":5013,"type":76,"marks":5014}," (NCUA), both of which protect you against bank failures. (Look for “Member FDIC” or “member NCUA” on their website to make sure.)",[5015],{"type":79,"attrs":5016},{"color":91},{"type":105,"attrs":5018,"content":5019},{"level":107},[5020],{"text":2294,"type":76,"marks":5021},[5022,5023],{"type":820},{"type":79,"attrs":5024},{"color":81},{"type":72,"content":5026},[5027],{"text":5028,"type":76,"marks":5029},"High-yield savings accounts aren’t for everyone. Here are some alternatives worth considering. ",[5030],{"type":79,"attrs":5031},{"color":81},{"type":105,"attrs":5033,"content":5034},{"level":123},[5035],{"text":2303,"type":76,"marks":5036},[5037,5038],{"type":820},{"type":79,"attrs":5039},{"color":81},{"type":72,"content":5041},[5042],{"text":5043,"type":76,"marks":5044},"Money market accounts are similar to high-yield savings accounts in that they’re FDIC-insured and their interest rates often exceed regular savings account rates. You can deposit cash and make ATM withdrawals. One big difference is that many money market accounts also provide a debit card and allow you to write checks, which can make them a better choice for those who prefer to pay their bills manually. (Disclaimer: you’ll only be able to write up to six checks per month, as mandated by Regulation D.)",[5045],{"type":79,"attrs":5046},{"color":81},{"type":105,"attrs":5048,"content":5049},{"level":123},[5050],{"text":2326,"type":76,"marks":5051},[5052,5053],{"type":820},{"type":79,"attrs":5054},{"color":81},{"type":72,"content":5056},[5057],{"text":5058,"type":76,"marks":5059},"A CD is another useful tool for short-term financial planning. It’s a type of investment account that locks up your money for a specific period of time — often three to five years — at which point you can withdraw it along with any interest earned. In the interim, however, you’re not allowed to touch your savings. High-yield savings accounts don’t have these restrictions: they operate much like regular deposit accounts, allowing you to make deposits and withdrawals as needed while also offering higher rates than traditional savings accounts.",[5060],{"type":79,"attrs":5061},{"color":81},{"type":72,"content":5063},[5064],{"text":5065,"type":76,"marks":5066},"Though you won’t be able to access your money in a CD account for the length of the term, you’re likely to earn more in interest over that term than you would have with a high-yield savings account. Rates are also fixed with a CD account, not fluctuating like a high-yield savings account, so it’s a more predictable return on investment. ",[5067],{"type":79,"attrs":5068},{"color":81},{"type":105,"attrs":5070,"content":5071},{"level":107},[5072],{"text":2349,"type":76,"marks":5073},[5074,5075],{"type":820},{"type":79,"attrs":5076},{"color":81},{"type":72,"content":5078},[5079],{"text":5080,"type":76,"marks":5081},"High-yield savings accounts are one of the best tools for protecting and growing your savings without sacrificing access to your money. Because they offer higher interest rates than you might find on a traditional savings account, they’re a great way to close the final gaps to reach your short-term financial goals. ",[5082],{"type":79,"attrs":5083},{"color":81},{"type":72,"content":5085},[5086,5091,5098],{"text":5087,"type":76,"marks":5088},"You can open a high-interest savings account with any number of financial institutions, but each offers different rates, fees, and minimum balance requirements. To rate-shop efficiently, consider using ",[5089],{"type":79,"attrs":5090},{"color":81},{"text":739,"type":76,"marks":5092},[5093,5095,5097],{"type":188,"attrs":5094},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":5096},{"color":91},{"type":196},{"text":5099,"type":76,"marks":5100},", a powerful online platform that lets you browse some of the best banks in the business. Use it to shop around, compare rates, and find the best high-yield savings account for you.",[5101],{"type":79,"attrs":5102},{"color":91},{"type":72,"content":5104},[5105],{"text":5106,"type":76,"marks":5107},"Disclaimer:",[5108,5110],{"type":86,"attrs":5109},{"class":765},{"type":79,"attrs":5111},{"color":81},{"type":72,"content":5113},[5114],{"text":5115,"type":76,"marks":5116},"This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.",[5117,5119],{"type":86,"attrs":5118},{"class":765},{"type":79,"attrs":5120},{"color":81},{"type":69,"content":5122},[5123],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798210\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": 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\"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798210\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798210\"}-->","https://www.marketplace.navient.com/blog/what-is-a-high-yield-savings-account/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798210\"}-->","what-is-a-high-yield-savings-account","navient_marketplace/blog/what-is-a-high-yield-savings-account",50,[],"ecae4182-877b-4eed-8f0a-4b9bbb364523","2023-05-10T19:41:16.399Z",[],{"name":5177,"created_at":5178,"published_at":5179,"updated_at":5180,"id":5181,"uuid":5182,"content":5183,"slug":5989,"full_slug":5990,"sort_by_date":91,"position":5991,"tag_list":5992,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":5993,"first_published_at":5994,"release_id":91,"lang":899,"path":91,"alternates":5995,"default_full_slug":91,"translated_slugs":91},"How to Choose a High-Yield Savings Account","2025-04-07T18:31:39.819Z","2025-12-26T13:45:16.223Z","2025-12-26T13:45:16.251Z",651798211,"25d050c8-73dd-4a39-8be2-433306a8034e",{"seo":5184,"_uid":5188,"body":5189,"author":49,"category":2453,"featured":45,"component":889,"canonicalTag":5987,"_editable":5988},{"_uid":5185,"title":5186,"plugin":17,"og_image":18,"og_title":18,"description":5187,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"e337439f-627f-4ffe-b1ea-513d4b49b751","How to Choose a High-Yield Savings Account - Navient Marketplace","Learn how to choose a high-yield savings account based on your personal finance goals. Interest rates, fees, terms, and more. Here's what you need to know.","48933c4c-21f0-4a99-aa8a-03c5aa2d28b7",[5190,5199,5972],{"id":23,"_uid":5191,"image":5192,"intro":5187,"author":27,"classes":5193,"category":18,"featured":45,"blogTitle":5177,"component":47,"imageLink":5197,"blendImage":45,"authorRoute":49,"publishedDate":2487,"backgroundColor":51,"_editable":5198},"2584db58-da39-4e41-a1b0-84b2af09dc0e","//a.storyblok.com/f/110029/1481x988/3f616f5c93/how-to-choose-a-high-yield-savings-account.png",[5194],{"_uid":5195,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":5196},"561851a9-113f-460a-bae9-bd4be68e7081","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"561851a9-113f-460a-bae9-bd4be68e7081\", \"id\": \"651798211\"}-->","/images/how-to-choose-a-high-yield-savings-account.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"2584db58-da39-4e41-a1b0-84b2af09dc0e\", \"id\": \"651798211\"}-->",{"_uid":5200,"bloks":5201,"classes":859,"component":860,"mobileClasses":18,"containerContent":5970,"_editable":5971},"34209976-7014-4aec-99f2-5b2659036146",[5202],{"_uid":5203,"bloks":5204,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":5969},"d6fe7f6f-f279-4516-9325-cf22cd63338a",[5205,5943],{"lg":60,"md":60,"sm":61,"_uid":5206,"cols":61,"bloks":5207,"alignSelf":802,"component":803,"_editable":5942},"33b17b9d-2cea-4cd9-a840-7d806cacba08",[5208],{"_uid":5209,"color":66,"classes":67,"content":18,"richText":5210,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":5938,"_editable":5941},"1c2fecf4-3e7d-45a3-8cd3-ec01aee640ed",{"type":69,"content":5211},[5212,5220,5227,5235,5282,5290,5323,5330,5337,5345,5352,5361,5368,5377,5397,5404,5413,5420,5433,5453,5474,5483,5490,5499,5506,5515,5536,5545,5566,5573,5582,5589,5650,5657,5747,5756,5763,5772,5806,5815,5822,5831,5838,5846,5866,5874,5894,5902,5921,5929],{"type":72,"content":5213},[5214],{"text":789,"type":76,"marks":5215},[5216,5218],{"type":86,"attrs":5217},{"class":765},{"type":79,"attrs":5219},{"color":2510},{"type":72,"content":5221},[5222],{"text":5223,"type":76,"marks":5224},"If you’ve spent any time browsing high-yield savings accounts online, you know that many offer similar annual percentage yields (APY). The difference in rates between top banks is usually a fraction of a percent. So, when rates are fairly similar, how do you choose a high-yield savings account? What else should you look for?",[5225],{"type":79,"attrs":5226},{"color":2510},{"type":105,"attrs":5228,"content":5229},{"level":107},[5230],{"text":2529,"type":76,"marks":5231},[5232,5233],{"type":820},{"type":79,"attrs":5234},{"color":2510},{"type":145,"content":5236},[5237,5246,5255,5264,5273],{"type":148,"content":5238},[5239],{"type":72,"content":5240},[5241],{"text":5242,"type":76,"marks":5243},"A high-yield savings account is an interest-bearing bank account that offers a higher APY than traditional savings accounts. ",[5244],{"type":79,"attrs":5245},{"color":2510},{"type":148,"content":5247},[5248],{"type":72,"content":5249},[5250],{"text":5251,"type":76,"marks":5252},"You can open a high-yield savings account at most financial institutions, either in-person or online.",[5253],{"type":79,"attrs":5254},{"color":2510},{"type":148,"content":5256},[5257],{"type":72,"content":5258},[5259],{"text":5260,"type":76,"marks":5261},"When choosing an account servicer, it’s important to evaluate fees, penalties, FDIC insurance, minimum balance requirements, minimum opening deposit requirements, withdrawal limits, and overall accessibility. ",[5262],{"type":79,"attrs":5263},{"color":2510},{"type":148,"content":5265},[5266],{"type":72,"content":5267},[5268],{"text":5269,"type":76,"marks":5270},"The pros of high-yield savings accounts are that they’re high-interest, secured against financial loss, and relatively accessible.",[5271],{"type":79,"attrs":5272},{"color":2510},{"type":148,"content":5274},[5275],{"type":72,"content":5276},[5277],{"text":5278,"type":76,"marks":5279},"The cons of high-yield savings accounts are that their APYs are not fixed, they’re not ideal for building long-term wealth or for everyday banking, and they have stricter requirements than traditional savings accounts. ",[5280],{"type":79,"attrs":5281},{"color":2510},{"type":105,"attrs":5283,"content":5284},{"level":107},[5285],{"text":2585,"type":76,"marks":5286},[5287,5288],{"type":820},{"type":79,"attrs":5289},{"color":2510},{"type":72,"content":5291},[5292,5297,5306,5311,5319],{"text":5293,"type":76,"marks":5294},"A high-yield savings account is a savings account that allows you to earn compound interest on the funds you deposit. Some traditional savings accounts do this, but their rates aren’t nearly as high. The national average APY for traditional savings accounts ",[5295],{"type":79,"attrs":5296},{"color":2510},{"text":5298,"type":76,"marks":5299},"is 0.39%",[5300,5303,5305],{"type":188,"attrs":5301},{"href":5302,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/best/banking/high-yield-online-savings-accounts#",{"type":79,"attrs":5304},{"color":2638},{"type":196},{"text":5307,"type":76,"marks":5308},". High-yield savings accounts, on the other hand, offer ",[5309],{"type":79,"attrs":5310},{"color":2510},{"text":5312,"type":76,"marks":5313},"upwards of 4.0% APY",[5314,5316,5318],{"type":188,"attrs":5315},{"href":1783,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":5317},{"color":2638},{"type":196},{"text":198,"type":76,"marks":5320},[5321],{"type":79,"attrs":5322},{"color":2510},{"type":72,"content":5324},[5325],{"text":5326,"type":76,"marks":5327},"So how does that affect your savings? Let’s say you open a high-yield online savings account with a 4.0% APY. In this example, you deposit $20,000, then make regular monthly deposits of $200. After five years, you could have $5,568.86 in total interest earned. Between that and your regular deposits, you’d end up with $37,568.86 in savings, provided that the interest rate stayed the same throughout those five years.",[5328],{"type":79,"attrs":5329},{"color":2510},{"type":72,"content":5331},[5332],{"text":5333,"type":76,"marks":5334},"Now, if you had put those same deposit amounts into a traditional bank account, your savings would look very different. After five years at a 0.33% APY, you would have $32,429 in total savings, and only $429 would be interest earned. That means you’d miss out on $5,136 in total interest earnings simply because you stored your money in a different account type. ",[5335],{"type":79,"attrs":5336},{"color":2510},{"type":72,"content":5338},[5339],{"text":5340,"type":76,"marks":5341},"*Hypothetical scenario, results may vary.",[5342,5343],{"type":237},{"type":79,"attrs":5344},{"color":2510},{"type":72,"content":5346},[5347],{"text":5348,"type":76,"marks":5349},"While high-yield savings accounts offer some pretty strong benefits, they’re not without disadvantages. Generally, they’re a little more restrictive than traditional savings accounts. High-yield accounts may require monthly fees, minimum balances, or a minimum deposit to open them. Some may also put a limit on your monthly transfers or withdrawals. ",[5350],{"type":79,"attrs":5351},{"color":2510},{"type":105,"attrs":5353,"content":5354},{"level":107},[5355],{"text":5356,"type":76,"marks":5357},"How to choose a high-yield savings account ",[5358,5359],{"type":820},{"type":79,"attrs":5360},{"color":2510},{"type":72,"content":5362},[5363],{"text":5364,"type":76,"marks":5365},"Picking a high-yield savings account isn’t just about APY. You’ll want to check for other features, too, like easy access to your money and a guarantee that your cash will be kept safe. Here’s what you should look for if you’re shopping around for a high-yield savings account.",[5366],{"type":79,"attrs":5367},{"color":2510},{"type":105,"attrs":5369,"content":5370},{"level":123},[5371],{"text":5372,"type":76,"marks":5373},"1. FDIC insurance",[5374,5375],{"type":820},{"type":79,"attrs":5376},{"color":2622},{"type":72,"content":5378},[5379,5384,5392],{"text":5380,"type":76,"marks":5381},"FDIC stands for “Federal Deposit Insurance Corporation.” This is the organization that insures your money against loss in case of bank failure. Most top high-yield accounts are ",[5382],{"type":79,"attrs":5383},{"color":2510},{"text":5385,"type":76,"marks":5386},"FDIC-insured up to $250,000",[5387,5389,5391],{"type":188,"attrs":5388},{"href":2756,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":5390},{"color":2638},{"type":196},{"text":5393,"type":76,"marks":5394}," per depositor. This means that if the bank fails, you’re eligible to recoup up to $250,000 of any lost savings. You can tell a financial institution is insured by looking for the “Member FDIC” badge on the bank’s website. ",[5395],{"type":79,"attrs":5396},{"color":2510},{"type":72,"content":5398},[5399],{"text":5400,"type":76,"marks":5401},"Note that many credit unions are also insured. Look for the National Credit Union Administration (NCUA) badge on the institution's website to make sure.",[5402],{"type":79,"attrs":5403},{"color":2510},{"type":105,"attrs":5405,"content":5406},{"level":123},[5407],{"text":5408,"type":76,"marks":5409},"2. Required initial deposit",[5410,5411],{"type":820},{"type":79,"attrs":5412},{"color":2622},{"type":72,"content":5414},[5415],{"text":5416,"type":76,"marks":5417},"Some high-yield savings accounts require an initial minimum deposit. This will be the amount of money you need to deposit in order to open the account. It could be as low as $25 or up to $1,000 or more. You might assume that higher-APY banks require higher minimum deposits, but this isn’t always the case. Many high-yield savings accounts with APYs of 3.0% or higher don’t require any minimum deposit to earn interest.",[5418],{"type":79,"attrs":5419},{"color":2510},{"type":105,"attrs":5421,"content":5422},{"level":123},[5423,5429],{"text":5424,"type":76,"marks":5425},"3. APY",[5426,5427],{"type":820},{"type":79,"attrs":5428},{"color":2622},{"text":2398,"type":76,"marks":5430},[5431],{"type":79,"attrs":5432},{"color":2622},{"type":72,"content":5434},[5435,5440,5448],{"text":5436,"type":76,"marks":5437},"The “",[5438],{"type":79,"attrs":5439},{"color":2510},{"text":1749,"type":76,"marks":5441},[5442,5445,5447],{"type":188,"attrs":5443},{"href":5444,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.nerdwallet.com/article/banking/what-is-apy",{"type":79,"attrs":5446},{"color":2638},{"type":196},{"text":5449,"type":76,"marks":5450},"” refers to the percentage of your savings that you’ll earn back in interest each year. APY factors in the account’s interest rate as well as other relevant factors, like fees and compounding frequency, to give you a clear idea of how much you’ll actually earn.",[5451],{"type":79,"attrs":5452},{"color":2510},{"type":72,"content":5454},[5455,5460,5469],{"text":5456,"type":76,"marks":5457},"APY is a better metric for evaluating high-yield accounts than interest rates alone. That’s because Interest can compound daily, monthly, or weekly. When you see a bank advertising a 4.0% interest rate, for example, you won’t know how much you stand to earn unless you know ",[5458],{"type":79,"attrs":5459},{"color":2510},{"text":5461,"type":76,"marks":5462},"how often it compounds",[5463,5466,5468],{"type":188,"attrs":5464},{"href":5465,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.moneyrates.com/savings/interest-compounded-daily-vs-monthly.htm",{"type":79,"attrs":5467},{"color":2638},{"type":196},{"text":5470,"type":76,"marks":5471},". But if you see a bank advertising a 4.0% APY, you can be confident that, no matter how often interest compounds, by the end of the year, you will have earned 4% interest on your money. ",[5472],{"type":79,"attrs":5473},{"color":2510},{"type":105,"attrs":5475,"content":5476},{"level":123},[5477],{"text":5478,"type":76,"marks":5479},"4. Minimum balance",[5480,5481],{"type":820},{"type":79,"attrs":5482},{"color":2622},{"type":72,"content":5484},[5485],{"text":5486,"type":76,"marks":5487},"Some banks not only ask for a minimum deposit, but also require you to maintain a minimum balance. This is the amount of savings that you’ll need to keep in your account at all times. Failure to maintain the required minimum balance could result in a penalty or fee, a pause on interest earnings, or even the closure of your account.",[5488],{"type":79,"attrs":5489},{"color":2510},{"type":105,"attrs":5491,"content":5492},{"level":123},[5493],{"text":5494,"type":76,"marks":5495},"5. Fees and penalties",[5496,5497],{"type":820},{"type":79,"attrs":5498},{"color":2622},{"type":72,"content":5500},[5501],{"text":5502,"type":76,"marks":5503},"You may have to pay fees to open or maintain a high-interest savings account. Many banks charge monthly service fees to keep your account running. You may also have to pay a penalty if your account dips below a certain balance or if you exceed your bank’s withdrawal or transfer limits. Also keep an eye out for overdraft fees.  ",[5504],{"type":79,"attrs":5505},{"color":2510},{"type":105,"attrs":5507,"content":5508},{"level":123},[5509],{"text":5510,"type":76,"marks":5511},"6. Withdrawal limits ",[5512,5513],{"type":820},{"type":79,"attrs":5514},{"color":2622},{"type":72,"content":5516},[5517,5522,5531],{"text":5518,"type":76,"marks":5519},"Before the COVID-19 pandemic, you were limited to withdrawing and transferring your money up to six times every month. Since then, the federal reserve has ",[5520],{"type":79,"attrs":5521},{"color":2510},{"text":5523,"type":76,"marks":5524},"removed such limits",[5525,5528,5530],{"type":188,"attrs":5526},{"href":5527,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.forbes.com/advisor/banking/savings/regulation-d/",{"type":79,"attrs":5529},{"color":2638},{"type":196},{"text":5532,"type":76,"marks":5533},", and many banks now offer unlimited transfers and withdrawals per month. If a bank does have a monthly limit, you’re likely to incur a penalty if you exceed it. Before you open an account, one of the most important things to determine is how often you’ll be able to withdraw.",[5534],{"type":79,"attrs":5535},{"color":2510},{"type":105,"attrs":5537,"content":5538},{"level":123},[5539],{"text":5540,"type":76,"marks":5541},"7. Accessibility",[5542,5543],{"type":820},{"type":79,"attrs":5544},{"color":2622},{"type":72,"content":5546},[5547,5552,5561],{"text":5548,"type":76,"marks":5549},"One of the biggest benefits of a high-yield savings account is that your funds are relatively accessible. Unlike with a ",[5550],{"type":79,"attrs":5551},{"color":2510},{"text":5553,"type":76,"marks":5554},"certificate of deposit (CD account)",[5555,5558,5560],{"type":188,"attrs":5556},{"href":5557,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/terms/c/certificateofdeposit.asp",{"type":79,"attrs":5559},{"color":2638},{"type":196},{"text":5562,"type":76,"marks":5563},", you don’t have to lock your money in for a set term or into a particular asset. And unlike with the stock market, you don’t have to worry about losing a chunk of your savings if the market takes a sudden downturn. ",[5564],{"type":79,"attrs":5565},{"color":2510},{"type":72,"content":5567},[5568],{"text":5569,"type":76,"marks":5570},"That said, accessibility does vary from account to account. Some banks offer online banking portals or mobile apps, while others may require you to go to a brick-and-mortar institution to make transfers and withdrawals. With many accounts, you’ll be able to set up ACH wire transfers and direct deposits, while some will let you withdraw cash with an ATM card. ",[5571],{"type":79,"attrs":5572},{"color":2510},{"type":105,"attrs":5574,"content":5575},{"level":107},[5576],{"text":5577,"type":76,"marks":5578},"Pros and cons of a high-yield savings account",[5579,5580],{"type":820},{"type":79,"attrs":5581},{"color":2510},{"type":72,"content":5583},[5584],{"text":5585,"type":76,"marks":5586},"High-yield savings accounts come with some big advantages that the average deposit account can’t offer. Here are a few of the most important: ",[5587],{"type":79,"attrs":5588},{"color":2510},{"type":145,"content":5590},[5591,5606,5621,5635],{"type":148,"content":5592},[5593],{"type":72,"content":5594},[5595,5601],{"text":5596,"type":76,"marks":5597},"Easy to open:",[5598,5599],{"type":820},{"type":79,"attrs":5600},{"color":2510},{"text":5602,"type":76,"marks":5603}," High-yield savings accounts are relatively straightforward to set up. As with opening any new account, you’ll need your social security number, some identification, proof of a physical address, and cash or a check ready to make that first deposit. You can open a high-yield savings account online or in person with a number of big national banks, including Marcus by Goldman Sachs, CIT Bank, Synchrony Bank, and Axos Bank.",[5604],{"type":79,"attrs":5605},{"color":2510},{"type":148,"content":5607},[5608],{"type":72,"content":5609},[5610,5616],{"text":5611,"type":76,"marks":5612},"Higher APY:",[5613,5614],{"type":820},{"type":79,"attrs":5615},{"color":2510},{"text":5617,"type":76,"marks":5618}," The average savings account doesn’t offer anywhere near the APY that a high-yield account does. Right now, top banks are offering high-yield savings accounts with APYs more than ten times the national average for traditional savings accounts.",[5619],{"type":79,"attrs":5620},{"color":2510},{"type":148,"content":5622},[5623],{"type":72,"content":5624},[5625,5630],{"text":2675,"type":76,"marks":5626},[5627,5628],{"type":820},{"type":79,"attrs":5629},{"color":2510},{"text":5631,"type":76,"marks":5632},": Though you’re likely to earn more over time by investing your money in a retirement account or even a CD, these accounts also make your funds harder to access. With a CD account, for example, you will pay penalties on early withdrawals. Many high-yield savings accounts, on the other hand, allow unlimited withdrawals and transfers. This makes them an ideal place to store money you may need in the short term but also want to earn high interest on.",[5633],{"type":79,"attrs":5634},{"color":2510},{"type":148,"content":5636},[5637],{"type":72,"content":5638},[5639,5645],{"text":5640,"type":76,"marks":5641},"Safe",[5642,5643],{"type":820},{"type":79,"attrs":5644},{"color":2510},{"text":5646,"type":76,"marks":5647},": Compared to the stock market, high-yield savings accounts are a much safer place to store your money. Most accounts are FDIC-insured for up to $250,000 per customer, which means that if you deposit less than this, it’s virtually impossible for you to lose money up to the insured amounts. This is in contrast to the stock market, where it’s possible to lose a large portion of your investment if the market takes a sudden downturn. ",[5648],{"type":79,"attrs":5649},{"color":2510},{"type":72,"content":5651},[5652],{"text":5653,"type":76,"marks":5654},"Though high-yield savings accounts come with some great benefits, they’re not without disadvantages. Here’s what you should know before you open a new account of your own: ",[5655],{"type":79,"attrs":5656},{"color":2510},{"type":145,"content":5658},[5659,5688,5703,5732],{"type":148,"content":5660},[5661],{"type":72,"content":5662},[5663,5669,5674,5683],{"text":5664,"type":76,"marks":5665},"Bad for everyday banking: ",[5666,5667],{"type":820},{"type":79,"attrs":5668},{"color":2510},{"text":5670,"type":76,"marks":5671},"High-yield savings accounts are a great place to grow short-term savings, but they’re not ideal for storing money you hope to use on a regular basis. These accounts don’t come with credit cards, debit cards, or check-writing privileges. Some still charge penalties for withdrawing or transferring money more than six times per month. If you’re looking for a place to store your spending money, consider a ",[5672],{"type":79,"attrs":5673},{"color":91},{"text":5675,"type":76,"marks":5676},"high-yield checking account",[5677,5680,5682],{"type":188,"attrs":5678},{"href":5679,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/what-is-high-yield-checking-account/",{"type":79,"attrs":5681},{"color":2638},{"type":196},{"text":5684,"type":76,"marks":5685}," instead.",[5686],{"type":79,"attrs":5687},{"color":2510},{"type":148,"content":5689},[5690],{"type":72,"content":5691},[5692,5698],{"text":5693,"type":76,"marks":5694},"Strict requirements",[5695,5696],{"type":820},{"type":79,"attrs":5697},{"color":2510},{"text":5699,"type":76,"marks":5700},": You’ll likely have to jump through more hoops to open and maintain a high-yield savings account than you would with a traditional savings account. These include minimum balance requirements, minimum deposit requirements, and monthly maintenance fees.",[5701],{"type":79,"attrs":5702},{"color":2510},{"type":148,"content":5704},[5705],{"type":72,"content":5706},[5707,5713,5718,5727],{"text":5708,"type":76,"marks":5709},"Bad for building long-term wealth",[5710,5711],{"type":820},{"type":79,"attrs":5712},{"color":2510},{"text":5714,"type":76,"marks":5715},": Even though high-yield savings accounts offer higher interest rates than traditional savings accounts, they’re not high enough to keep up with inflation. If your goal is building long-term wealth, ",[5716],{"type":79,"attrs":5717},{"color":2510},{"text":5719,"type":76,"marks":5720},"you’re better off investing",[5721,5724,5726],{"type":188,"attrs":5722},{"href":5723,"uuid":91,"anchor":91,"target":91,"linktype":192},"https://www.wellsfargo.com/goals-investing/saving-vs-investing/",{"type":79,"attrs":5725},{"color":2638},{"type":196},{"text":5728,"type":76,"marks":5729},". Consider bonds, or another high-growth investment vehicle.",[5730],{"type":79,"attrs":5731},{"color":2510},{"type":148,"content":5733},[5734],{"type":72,"content":5735},[5736,5742],{"text":5737,"type":76,"marks":5738},"APY is not guaranteed: ",[5739,5740],{"type":820},{"type":79,"attrs":5741},{"color":2510},{"text":5743,"type":76,"marks":5744},"Currently, the best high-yield savings accounts offer APYs of around 4.0%, but that rate is not fixed. So, while a bank may tout high rates now, those rates could drop at any time. That means the depositors could make significantly less than advertised. ",[5745],{"type":79,"attrs":5746},{"color":2510},{"type":105,"attrs":5748,"content":5749},{"level":107},[5750],{"text":5751,"type":76,"marks":5752},"Is a high-yield savings account worth it?",[5753,5754],{"type":820},{"type":79,"attrs":5755},{"color":2510},{"type":72,"content":5757},[5758],{"text":5759,"type":76,"marks":5760},"High-yield savings accounts can be worth having in a few specific situations. If you’re doing any of the following, a high-yield savings account could be right for you. ",[5761],{"type":79,"attrs":5762},{"color":2510},{"type":105,"attrs":5764,"content":5765},{"level":123},[5766],{"text":5767,"type":76,"marks":5768},"Growing an emergency fund ",[5769,5770],{"type":820},{"type":79,"attrs":5771},{"color":2622},{"type":72,"content":5773},[5774,5779,5788,5793,5797,5801],{"text":5775,"type":76,"marks":5776},"Experts recommend keeping three to six months’ worth of expenses in an emergency fund. This is a pool of savings you can tap into in case you lose a job or find yourself saddled with a large unexpected expense. ",[5777],{"type":79,"attrs":5778},{"color":2510},{"text":5780,"type":76,"marks":5781},"A good emergency fund",[5782,5785,5787],{"type":188,"attrs":5783},{"href":5784,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.earnest.com/blog/how-much-should-you-save-in-your-emergency-fund/",{"type":79,"attrs":5786},{"color":2638},{"type":196},{"text":5789,"type":76,"marks":5790}," should give you enough financial cushion that you’ll never have to charge an ambulance bill to your American Express card. ",[5791],{"type":79,"attrs":5792},{"color":2510},{"type":1599,"marks":5794},[5795],{"type":79,"attrs":5796},{"color":2510},{"type":1599,"marks":5798},[5799],{"type":79,"attrs":5800},{"color":2510},{"text":5802,"type":76,"marks":5803},"But while important, growing a fund this large can take time. And it can take even longer if you’re earning a meager 0.33% interest, the national average among traditional savings account rates. So, if you’re trying to build an emergency fund — or grow an existing fund when more — a high-yield savings account can be a great solution.  ",[5804],{"type":79,"attrs":5805},{"color":2510},{"type":105,"attrs":5807,"content":5808},{"level":123},[5809],{"text":5810,"type":76,"marks":5811},"Funding an important short-term expense ",[5812,5813],{"type":820},{"type":79,"attrs":5814},{"color":2622},{"type":72,"content":5816},[5817],{"text":5818,"type":76,"marks":5819},"If you’re saving up for a big purchase, like a down payment on a house or car, a high-yield savings account could be right for you. Your money will be safe from market fluctuations and FDIC-insured, which means you won’t risk losing it over the short term. Then, when it’s time to make that purchase, your money will be accessible. ",[5820],{"type":79,"attrs":5821},{"color":2510},{"type":105,"attrs":5823,"content":5824},{"level":107},[5825],{"text":5826,"type":76,"marks":5827},"High-yield savings account alternatives ",[5828,5829],{"type":820},{"type":79,"attrs":5830},{"color":2510},{"type":72,"content":5832},[5833],{"text":5834,"type":76,"marks":5835},"If a high-yield savings account doesn’t seem right for your financial goals, that’s ok. Some alternatives offer similar advantages.",[5836],{"type":79,"attrs":5837},{"color":2510},{"type":105,"attrs":5839,"content":5840},{"level":123},[5841],{"text":2303,"type":76,"marks":5842},[5843,5844],{"type":820},{"type":79,"attrs":5845},{"color":2622},{"type":72,"content":5847},[5848,5852,5861],{"text":4245,"type":76,"marks":5849},[5850],{"type":79,"attrs":5851},{"color":2510},{"text":5853,"type":76,"marks":5854},"money market account",[5855,5858,5860],{"type":188,"attrs":5856},{"href":5857,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investopedia.com/terms/m/moneymarketaccount.asp",{"type":79,"attrs":5859},{"color":2638},{"type":196},{"text":5862,"type":76,"marks":5863}," (MMA) is another one of the best savings accounts for storing up cash for a short-term goal. Like a high-yield savings account, an MMA is a type of interest-bearing account that offers higher-than-average APY. These accounts may come with restrictions similar to what you’d find on a high-yield savings account. However, they differ in one major way: Money market accounts offer greater access to your funds. MMAs often come with ATM cards, debit cards, and/or check-writing privileges. This gives you more control over how and when you use your money.  ",[5864],{"type":79,"attrs":5865},{"color":2510},{"type":105,"attrs":5867,"content":5868},{"level":123},[5869],{"text":2326,"type":76,"marks":5870},[5871,5872],{"type":820},{"type":79,"attrs":5873},{"color":2622},{"type":72,"content":5875},[5876,5881,5889],{"text":5877,"type":76,"marks":5878},"Like a high-yield savings account, a CD is an interest-bearing account that offers a high APY. In fact, ",[5879],{"type":79,"attrs":5880},{"color":2510},{"text":2688,"type":76,"marks":5882},[5883,5886,5888],{"type":188,"attrs":5884},{"href":5885,"uuid":91,"anchor":91,"target":191,"linktype":192},"https://www.investor.gov/introduction-investing/investing-basics/investment-products/certificates-deposit-cds",{"type":79,"attrs":5887},{"color":2638},{"type":196},{"text":5890,"type":76,"marks":5891}," may offer higher APYs than even high-yield savings accounts. (Some of the best rates for CDs right now are around 5.0%.) And unlike with high-yield savings accounts, that rate is fixed; it cannot drop over time. The downside, though, is that CDs come with more restrictions. You have to lock your money into the account for a set term –– generally anywhere from a few months to five or so years. If you want to withdraw early, you’ll have to pay a penalty. ",[5892],{"type":79,"attrs":5893},{"color":2510},{"type":105,"attrs":5895,"content":5896},{"level":107},[5897],{"text":2349,"type":76,"marks":5898},[5899,5900],{"type":820},{"type":79,"attrs":5901},{"color":2510},{"type":72,"content":5903},[5904,5909,5916],{"text":5905,"type":76,"marks":5906},"You can open a high-yield savings account at most financial institutions, including credit unions, brick-and-mortar banks, and some online banks. If you’re in the market for a high-yield savings account, consider ",[5907],{"type":79,"attrs":5908},{"color":2510},{"text":739,"type":76,"marks":5910},[5911,5913,5915],{"type":188,"attrs":5912},{"href":743,"uuid":91,"anchor":91,"target":191,"linktype":192},{"type":79,"attrs":5914},{"color":2638},{"type":196},{"text":5917,"type":76,"marks":5918}," your number one ally. Navient Marketplace is a one-stop shop for all your personal finance needs. Browse banks, compare APYs, check eligibility standards, and find an account that meets your savings goals. ",[5919],{"type":79,"attrs":5920},{"color":2510},{"type":72,"content":5922},[5923],{"text":761,"type":76,"marks":5924},[5925,5927],{"type":86,"attrs":5926},{"class":765},{"type":79,"attrs":5928},{"color":2510},{"type":72,"content":5930},[5931],{"text":5932,"type":76,"marks":5933},"Information in this blog, including the rates advertised, are current as of 05/08/2023 and subject to change. ",[5934,5936],{"type":86,"attrs":5935},{"class":765},{"type":79,"attrs":5937},{"color":2510},{"type":69,"content":5939},[5940],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"1c2fecf4-3e7d-45a3-8cd3-ec01aee640ed\", \"id\": \"651798211\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"33b17b9d-2cea-4cd9-a840-7d806cacba08\", \"id\": 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\"157494\", \"uid\": \"ee7721b4-2ee6-45a6-a3e9-0189b477a4e9\", \"id\": \"651798211\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"b5c0a1b7-ad78-405d-adfa-2f37992ecb8b\", \"id\": \"651798211\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"7cb4c235-3d87-48ce-becf-43b4862e0ce0\", \"id\": \"651798211\"}-->","https://www.marketplace.navient.com/blog/how-to-choose-a-high-yield-savings-account/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"48933c4c-21f0-4a99-aa8a-03c5aa2d28b7\", \"id\": \"651798211\"}-->","how-to-choose-a-high-yield-savings-account","navient_marketplace/blog/how-to-choose-a-high-yield-savings-account",60,[],"f9397c8a-6e4f-450b-af30-b706f21bf984","2023-05-10T19:10:59.222Z",[],{"name":5997,"created_at":5998,"published_at":5999,"updated_at":6000,"id":6001,"uuid":6002,"content":6003,"slug":6826,"full_slug":6827,"sort_by_date":91,"position":6828,"tag_list":6829,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":6830,"first_published_at":6831,"release_id":91,"lang":899,"path":6832,"alternates":6833,"default_full_slug":91,"translated_slugs":91},"What is a Personal Loan?","2025-04-07T18:31:41.681Z","2026-04-01T17:17:08.300Z","2026-04-01T17:17:08.323Z",651798212,"05da79f1-7a78-4daf-a4e0-91946ace1eb1",{"seo":6004,"_uid":1699,"body":6007,"author":1711,"category":6823,"featured":45,"component":889,"canonicalTag":6824,"_editable":6825},{"_uid":1696,"title":6005,"plugin":17,"og_image":18,"og_title":18,"description":6006,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What is a Personal Loan? - Navient Marketplace","What is a personal loan? Get the complete guide here: Definitions, loan types, how personal loans work, plus fees, terms, APRs, alternatives, and more. ",[6008,6017,6811],{"id":23,"_uid":2476,"image":6009,"intro":6010,"author":1705,"classes":6011,"category":18,"featured":45,"blogTitle":5997,"component":47,"imageLink":6014,"blendImage":45,"authorRoute":1711,"publishedDate":6015,"backgroundColor":51,"_editable":6016},"//a.storyblok.com/f/110029/800x533/1fb9f8db2b/what-is-a-personal-loan.png","If your short-term goals require immediate funds, a personal loan can be a reliable option. Here's what you need to know.",[6012],{"_uid":2482,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":6013},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798212\"}-->","/images/what-is-a-personal-loan.png","Updated: February 16, 2023","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798212\"}-->",{"_uid":2490,"bloks":6018,"classes":859,"component":860,"mobileClasses":18,"containerContent":6809,"_editable":6810},[6019],{"_uid":2493,"bloks":6020,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":6808},[6021,6779],{"lg":60,"md":60,"sm":61,"_uid":2496,"cols":61,"bloks":6022,"alignSelf":802,"component":803,"_editable":6778},[6023],{"_uid":2499,"color":66,"classes":67,"content":18,"richText":6024,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":6774,"_editable":6777},{"type":69,"content":6025},[6026,6030,6037,6049,6062,6066,6073,6086,6093,6097,6110,6117,6121,6128,6132,6194,6198,6205,6209,6213,6276,6283,6287,6293,6306,6367,6371,6378,6382,6386,6393,6397,6401,6414,6418,6422,6429,6433,6437,6444,6448,6452,6459,6463,6467,6471,6478,6482,6489,6493,6502,6528,6536,6562,6569,6573,6577,6585,6602,6609,6626,6633,6637,6644,6661,6668,6676,6683,6687,6694,6711,6718,6735,6742,6746,6757,6768],{"type":72,"content":6027},[6028],{"text":6029,"type":76},"Considering a personal loan? Whether it’s for a costly home improvement, a wedding, or even paying off an auto loan, it may help put your plans into action without requiring you to dip into your savings account. If your short-term goals require immediate funds, a personal loan can be a reliable and manageable option. Here’s what you need to know.",{"type":105,"attrs":6031,"content":6032},{"level":107},[6033],{"text":6034,"type":76,"marks":6035},"What is a personal loan?",[6036],{"type":820},{"type":72,"content":6038},[6039,6040,6047],{"text":4245,"type":76},{"text":6041,"type":76,"marks":6042},"personal loan",[6043],{"type":188,"attrs":6044},{"href":6045,"uuid":91,"anchor":91,"custom":6046,"target":191,"linktype":192},"https://www.forbes.com/advisor/personal-loans/what-is-a-personal-loan/",{},{"text":6048,"type":76}," is a sum of money offered by a financial institution that can be used for a variety of purposes. It works like this: The borrower is provided with a one-time lump sum of cash, and then the loan is paid back to the lender in monthly payments over a specific time period, also known as a loan term.",{"type":72,"content":6050},[6051,6053,6060],{"text":6052,"type":76},"The borrower's credit score and ",{"text":6054,"type":76,"marks":6055},"credit history",[6056],{"type":188,"attrs":6057},{"href":6058,"uuid":91,"anchor":91,"custom":6059,"target":191,"linktype":192},"https://www.bankrate.com/loans/personal-loans/what-is-a-personal-loan/",{},{"text":6061,"type":76}," determine the annual percentage rate on the loan. Annual percentage rate (APR) is the money that is owed on top of the principal amount of the loan being borrowed. Borrowers with high credit scores will typically have more favorable monthly payments because of lower interest rates. ",{"type":72,"content":6063},[6064],{"text":6065,"type":76},"A personal loan is different from other types of loans. Personal loans do not require a specific purpose to be utilized. For instance, a mortgage loan and auto loan must be used on a home and a car respectively.",{"type":105,"attrs":6067,"content":6068},{"level":107},[6069],{"text":6070,"type":76,"marks":6071},"Types of personal loans",[6072],{"type":820},{"type":72,"content":6074},[6075,6077,6084],{"text":6076,"type":76},"There are ",{"text":6078,"type":76,"marks":6079},"several types of personal loans",[6080],{"type":188,"attrs":6081},{"href":6082,"uuid":91,"anchor":91,"custom":6083,"target":191,"linktype":192},"https://wallethub.com/edu/pl/what-is-a-personal-loan/61076",{},{"text":6085,"type":76},". The two most common are unsecured personal loans and secured personal loans.",{"type":105,"attrs":6087,"content":6088},{"level":123},[6089],{"text":6090,"type":76,"marks":6091},"Unsecured personal loans",[6092],{"type":820},{"type":72,"content":6094},[6095],{"text":6096,"type":76},"A personal loan can be unsecured. This means that the borrower does not have to offer collateral, such as a house or car for loan approval.",{"type":72,"content":6098},[6099,6101,6108],{"text":6100,"type":76},"Unsecured personal loans typically benefit borrowers with ",{"text":6102,"type":76,"marks":6103},"excellent credit",[6104],{"type":188,"attrs":6105},{"href":6106,"uuid":91,"anchor":91,"custom":6107,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/personal-loans-what-to-know-before-you-apply/",{},{"text":6109,"type":76},". Since the creditworthiness of the borrower determines the interest rate on the loan, individuals with high credit scores will be rewarded with lower rates.",{"type":105,"attrs":6111,"content":6112},{"level":123},[6113],{"text":6114,"type":76,"marks":6115},"Secured personal loans",[6116],{"type":820},{"type":72,"content":6118},[6119],{"text":6120,"type":76},"Secured personal loans require an individual to offer an asset as collateral on the loan. This option may be beneficial to individuals with lower credit scores who, without collateral, would likely face higher interest rates. The borrower may offer their car (known as a title loan) as collateral for the loan. However, if the loan payments are not made by the borrower, the asset can be seized by the financial institution.",{"type":105,"attrs":6122,"content":6123},{"level":107},[6124],{"text":6125,"type":76,"marks":6126},"What can a personal loan be used for?",[6127],{"type":820},{"type":72,"content":6129},[6130],{"text":6131,"type":76},"Personal loans are unique because they can be used for almost any purpose. There are several reasons someone may want to take out a personal loan. Some examples include:",{"type":145,"content":6133},[6134,6144,6154,6164,6174,6184],{"type":148,"content":6135},[6136],{"type":72,"content":6137},[6138,6142],{"text":6139,"type":76,"marks":6140},"Debt Consolidation",[6141],{"type":820},{"text":6143,"type":76},": You may have lingering debt with high interest rates, such as old credit cards. A personal loan could help you pay these off faster while adopting a lower interest rate.",{"type":148,"content":6145},[6146],{"type":72,"content":6147},[6148,6152],{"text":6149,"type":76,"marks":6150},"Medical bills",[6151],{"type":820},{"text":6153,"type":76},": A personal loan may give you the lump sum of money needed to wipe out your debt from a medical procedure.",{"type":148,"content":6155},[6156],{"type":72,"content":6157},[6158,6162],{"text":6159,"type":76,"marks":6160},"Home Improvements:",[6161],{"type":820},{"text":6163,"type":76}," Remodeling your kitchen or replacing your roof can be very expensive. A personal loan can be a great alternative to depleting your savings. ",{"type":148,"content":6165},[6166],{"type":72,"content":6167},[6168,6172],{"text":6169,"type":76,"marks":6170},"Purchasing a car: ",[6171],{"type":820},{"text":6173,"type":76},"Most likely, an auto loan will give you a better rate than a personal loan. However, if the personal loan does not require a down payment, this may be more equitable for you.",{"type":148,"content":6175},[6176],{"type":72,"content":6177},[6178,6182],{"text":6179,"type":76,"marks":6180},"Moving Costs",[6181],{"type":820},{"text":6183,"type":76},": Moving fees can add up quickly, especially for long-distance relocation. A personal loan will get you money fast to cover these expenses during a stressful time. ",{"type":148,"content":6185},[6186],{"type":72,"content":6187},[6188,6192],{"text":6189,"type":76,"marks":6190},"Refinance existing debt",[6191],{"type":820},{"text":6193,"type":76},": If you can get a better interest rate from a personal loan, you can use the loan to pay down existing high-interest debt.",{"type":72,"content":6195},[6196],{"text":6197,"type":76},"There are some situations where a personal loan cannot be used. Several examples include student loans, business expenses, and making a down payment on a house. There are other loan options dedicated to these situations.",{"type":105,"attrs":6199,"content":6200},{"level":107},[6201],{"text":6202,"type":76,"marks":6203},"How do personal loans work?",[6204],{"type":820},{"type":72,"content":6206},[6207],{"text":6208,"type":76},"A personal loan is an agreed-upon lump sum from a financial institution or online lender distributed to a borrower. During the application process, lenders work with a credit union to check the credit report of the borrower. An annual percentage rate is applied to the principal amount depending on the bureau's credit score findings. The borrower then pays back this loan amount in monthly payments over the agreed-upon loan term.",{"type":72,"content":6210},[6211],{"text":6212,"type":76},"There are a few steps before the money goes straight into your bank account. Let’s outline them:",{"type":4138,"attrs":6214,"content":6216},{"order":6215},{"order":4141},[6217,6227,6237,6256,6266],{"type":148,"content":6218},[6219],{"type":72,"content":6220},[6221,6225],{"text":6222,"type":76,"marks":6223},"Individual submits loan application.",[6224],{"type":820},{"text":6226,"type":76}," At this point, the financial institution pulls a credit report to assess the financial well-being of the applicant.",{"type":148,"content":6228},[6229],{"type":72,"content":6230},[6231,6235],{"text":6232,"type":76,"marks":6233},"Bank approves loan.",[6234],{"type":820},{"text":6236,"type":76}," If the lender finds the creditworthiness of the applicant adequate, a loan agreement will be sent to the borrower. At this point the application process is complete.",{"type":148,"content":6238},[6239],{"type":72,"content":6240},[6241,6245,6247,6254],{"text":6242,"type":76,"marks":6243},"Interest rate is applied.",[6244],{"type":820},{"text":6246,"type":76}," Whether a ",{"text":6248,"type":76,"marks":6249},"fixed interest rate or a variable rate",[6250],{"type":188,"attrs":6251},{"href":6252,"uuid":91,"anchor":91,"custom":6253,"target":191,"linktype":192},"https://www.valuepenguin.com/loans/fixed-vs-variable-interest-rates",{},{"text":6255,"type":76},", a percentage will be applied to the principal amount borrowed. Funds should be disbursed to the borrower within a few business days.",{"type":148,"content":6257},[6258],{"type":72,"content":6259},[6260,6264],{"text":6261,"type":76,"marks":6262},"Monthly payments are made.",[6263],{"type":820},{"text":6265,"type":76}," Monthly payments consist of the principal plus interest amount. These are paid over a period of time known as the loan term.",{"type":148,"content":6267},[6268],{"type":72,"content":6269},[6270,6274],{"text":6271,"type":76,"marks":6272},"Credit score is impacted.",[6273],{"type":820},{"text":6275,"type":76}," Lenders will report to credit bureaus on the timeliness of a borrower's repayment. If monthly payments are met each month, a borrower’s credit score will improve. If they fall delinquent, their score will subsequently suffer. In the case of a secured personal loan, failure to repay the loan within its term can lead to forfeiture of the initial collateral that was leveraged. ",{"type":105,"attrs":6277,"content":6278},{"level":107},[6279],{"text":6280,"type":76,"marks":6281},"How to pick the best personal loan",[6282],{"type":820},{"type":72,"content":6284},[6285],{"text":6286,"type":76},"All loans are not created equal. There are a few things an applicant should consider when choosing a personal loan: fees, repayment terms, annual percentage rate (APR), borrowing limits, and collateral requirements. Let’s take a closer look at each of these.",{"type":105,"attrs":6288,"content":6289},{"level":123},[6290],{"text":1872,"type":76,"marks":6291},[6292],{"type":820},{"type":72,"content":6294},[6295,6297,6304],{"text":6296,"type":76},"Personal loans may carry ",{"text":6298,"type":76,"marks":6299},"other fees",[6300],{"type":188,"attrs":6301},{"href":6302,"uuid":91,"anchor":91,"custom":6303,"target":191,"linktype":192},"https://www.mybanktracker.com/personal-loans/faq/personal-loan-fees-273285 ",{},{"text":6305,"type":76}," depending on the financial institution lending the funds. A few common fees include: ",{"type":145,"content":6307},[6308,6327,6337,6347,6357],{"type":148,"content":6309},[6310],{"type":72,"content":6311},[6312,6316,6318,6325],{"text":6313,"type":76,"marks":6314},"Application fee: ",[6315],{"type":820},{"text":6317,"type":76},"This is usually a ",{"text":6319,"type":76,"marks":6320},"small flat fee",[6321],{"type":188,"attrs":6322},{"href":6323,"uuid":91,"anchor":91,"custom":6324,"target":191,"linktype":192},"https://www.mybanktracker.com/personal-loans/faq/personal-loan-fees-273285",{},{"text":6326,"type":76}," ($25-50) due at the beginning of the loan process, when the application is submitted.",{"type":148,"content":6328},[6329],{"type":72,"content":6330},[6331,6335],{"text":6332,"type":76,"marks":6333},"Origination fee: ",[6334],{"type":820},{"text":6336,"type":76},"This fee is leveraged by a lender as a way to reduce risk. It’s usually based on the principal amount borrowed. Typically, these are about 1-6% of the loan amount.",{"type":148,"content":6338},[6339],{"type":72,"content":6340},[6341,6345],{"text":6342,"type":76,"marks":6343},"Prepayment penalty:",[6344],{"type":820},{"text":6346,"type":76}," These fees are paid by the borrower if they pay off their loan before the end of their loan term. Because the interest rate is based on the length of the loan term, some banks use this as a way to recoup lost funds. This fee is usually around 2% of the original loan amount.",{"type":148,"content":6348},[6349],{"type":72,"content":6350},[6351,6355],{"text":6352,"type":76,"marks":6353},"Insufficient Funds:",[6354],{"type":820},{"text":6356,"type":76}," Similar to overdrafting your checking account, if there are insufficient funds when collecting a monthly payment, you will incur a fee. This scenario typically carries a $25-50 flat fee.",{"type":148,"content":6358},[6359],{"type":72,"content":6360},[6361,6365],{"text":6362,"type":76,"marks":6363},"Late payment:",[6364],{"type":820},{"text":6366,"type":76}," Of course, if payments are late or missed you can expect to pay a penalty. These can be a set fee or a percentage of your monthly payment. ",{"type":72,"content":6368},[6369],{"text":6370,"type":76},"Not all lenders charge fees, however. It is important to understand what fees are associated with each lender prior to applying for your personal loan. Many financial institutions offer “no-fee” lending and help you avoid some of the fees mentioned above. Most, however, still include some fees related to insufficient funds or late payments.",{"type":105,"attrs":6372,"content":6373},{"level":123},[6374],{"text":6375,"type":76,"marks":6376},"Repayment terms",[6377],{"type":820},{"type":72,"content":6379},[6380],{"text":6381,"type":76},"Repayment terms refer to the amount of time between when money is borrowed and when it is expected to be paid back in full. Repayment terms range from lender to lender. Loans that carry shorter terms typically carry a higher monthly payment. But in the end, with a shorter term, you’ll pay less in interest than if the loan is spread over a longer term.",{"type":72,"content":6383},[6384],{"text":6385,"type":76},"On the other hand, though longer repayment terms translate to more paid in interest over the life of the loan, they also translate to lower monthly payments. Borrowers must determine what is right for them: a long term and a lower monthly payment vs a short term and less interest paid over the life of the loan.",{"type":105,"attrs":6387,"content":6388},{"level":123},[6389],{"text":6390,"type":76,"marks":6391},"APR",[6392],{"type":820},{"type":72,"content":6394},[6395],{"text":6396,"type":76},"Annual percentage rate (APR) is the yearly expense which a borrower pays on the loan amount borrowed. APR is calculated by determining how much the loan will cost you every year based on the interest rate and finance charges.",{"type":72,"content":6398},[6399],{"text":6400,"type":76},"Interest rate and APR are different. Interest rates represent the cost you’ll pay each year to borrow money. APR measures the cost to borrow money, but also takes into account additional fees that may be associated. Since APR includes your interest rate and other fees connected to your loan, your APR will reflect a higher number than your interest rate, and it’s a more accurate reflection of what you’ll pay on top of principal. ",{"type":72,"content":6402},[6403,6405,6412],{"text":6404,"type":76},"The average personal loan interest rate is ",{"text":6406,"type":76,"marks":6407},"around 11%",[6408],{"type":188,"attrs":6409},{"href":6410,"uuid":91,"anchor":91,"custom":6411,"target":191,"linktype":192},"https://www.bankrate.com/loans/personal-loans/average-personal-loan-rates/",{},{"text":6413,"type":76},". Individuals with good credit scores will receive lower rates, while those with bad credit can see rates much higher. ",{"type":72,"content":6415},[6416],{"text":6417,"type":76},"A borrower's APR will differ between financial institutions and online lenders. Factors such as credit score, amount of money borrowed, and length of term also impact APR.",{"type":72,"content":6419},[6420],{"text":6421,"type":76},"There are ways to lower your APR, such as improving your credit score, choosing a shorter term length, or negotiating with your lender.",{"type":105,"attrs":6423,"content":6424},{"level":123},[6425],{"text":6426,"type":76,"marks":6427},"Borrowing limits",[6428],{"type":820},{"type":72,"content":6430},[6431],{"text":6432,"type":76},"There is typically a maximum amount of money that someone can borrow from a lender. This is known as the borrowing limit. Several factors can determine an individual’s borrowing limit. A few include credit history, debt-to-income ratio, and loan type.",{"type":72,"content":6434},[6435],{"text":6436,"type":76},"In order to decide the best borrowing limit for you, you must determine what amount is feasible to pay back within the life of the loan. One thing to consider is your existing debt-to-income ratio. If you already have significant credit card debt or medical bills, can you afford another monthly payment?",{"type":105,"attrs":6438,"content":6439},{"level":123},[6440],{"text":6441,"type":76,"marks":6442},"Collateral requirements",[6443],{"type":820},{"type":72,"content":6445},[6446],{"text":6447,"type":76},"Typically, personal loans are unsecured. This means that they don't require collateral on the loan being borrowed. Instead, the borrower's credit score, income level, and overall financial well-being are analyzed.",{"type":72,"content":6449},[6450],{"text":6451,"type":76},"When you’re taking out a secured personal loan, collateral will be required. In this case, a lender will require an asset to offset the risk of the loan, such as savings account funds or a car. Before the borrower accepts the terms of the loan, they must determine if the collateral amount is a reasonable requirement for the loan amount, and if they can stand to lose it should they not be able to repay it in full.",{"type":105,"attrs":6453,"content":6454},{"level":107},[6455],{"text":6456,"type":76,"marks":6457},"Applying for a personal loan",[6458],{"type":820},{"type":72,"content":6460},[6461],{"text":6462,"type":76},"There are many ways to apply for a personal loan. In recent years, the internet has become the most efficient way to start the research process. You can quickly view terms and conditions from an array of lenders to determine who will work best for you. This is also an easy way to compare multiple loan offers.",{"type":72,"content":6464},[6465],{"text":6466,"type":76},"There are a few things you can do to prepare yourself for taking out a personal loan. To start, you should have an idea of your credit score. Obviously, the better your credit, the more likely you are to get a good annual percentage rate. You can also use a personal loan calculator to see what your monthly payment will look like based on the loan amount and loan term.",{"type":72,"content":6468},[6469],{"text":6470,"type":76},"Credit score and debt-to-income ratio are a few ways to know if you are in a good place financially to take on a personal loan.",{"type":105,"attrs":6472,"content":6473},{"level":107},[6474],{"text":6475,"type":76,"marks":6476},"Personal loan alternatives",[6477],{"type":820},{"type":72,"content":6479},[6480],{"text":6481,"type":76},"There are several alternatives to a personal loan. Depending on your situation, there may be a better option to suit your needs. Let’s take a look at a few.",{"type":105,"attrs":6483,"content":6484},{"level":123},[6485],{"text":6486,"type":76,"marks":6487},"Credit card",[6488],{"type":820},{"type":72,"content":6490},[6491],{"text":6492,"type":76},"A credit card is a line of credit that is offered by a financial institution to make purchases and is for everyday use. They typically carry a max spend limit based on the creditworthiness of the holder. Repayment for purchases on the credit card are made monthly.",{"type":72,"content":6494},[6495],{"text":6496,"type":76,"marks":6497},"Benefits of a credit card include:",[6498,6499],{"type":820},{"type":86,"attrs":6500},{"class":6501},"no-margin-bottom",{"type":145,"content":6503},[6504,6513,6522],{"type":148,"content":6505},[6506],{"type":72,"content":6507},[6508],{"text":6509,"type":76,"marks":6510},"immediate access to funds",[6511],{"type":86,"attrs":6512},{"class":6501},{"type":148,"content":6514},[6515],{"type":72,"content":6516},[6517],{"text":6518,"type":76,"marks":6519},"convenience",[6520],{"type":86,"attrs":6521},{"class":6501},{"type":148,"content":6523},[6524],{"type":72,"content":6525},[6526],{"text":6527,"type":76},"potential to earn rewards",{"type":72,"content":6529},[6530],{"text":6531,"type":76,"marks":6532},"Cons include:",[6533,6534],{"type":820},{"type":86,"attrs":6535},{"class":6501},{"type":145,"content":6537},[6538,6547,6556],{"type":148,"content":6539},[6540],{"type":72,"content":6541},[6542],{"text":6543,"type":76,"marks":6544},"high interest rates",[6545],{"type":86,"attrs":6546},{"class":6501},{"type":148,"content":6548},[6549],{"type":72,"content":6550},[6551],{"text":6552,"type":76,"marks":6553},"complex terms",[6554],{"type":86,"attrs":6555},{"class":6501},{"type":148,"content":6557},[6558],{"type":72,"content":6559},[6560],{"text":6561,"type":76},"annual fees",{"type":105,"attrs":6563,"content":6564},{"level":123},[6565],{"text":6566,"type":76,"marks":6567},"Personal line of credit",[6568],{"type":820},{"type":72,"content":6570},[6571],{"text":6572,"type":76},"A personal line of credit (PLOC) is similar to a credit card in that an individual receives a spend limit. Payments are then made monthly on what is spent. Unlike a credit card, however, funds can be withdrawn from the PLOC.",{"type":72,"content":6574},[6575],{"text":6576,"type":76},"A PLOC is also a term loan, meaning it has an expiration date. For instance, a lender may offer you access to funds for a period of two years.",{"type":72,"content":6578},[6579],{"text":6580,"type":76,"marks":6581},"Pros include:",[6582,6583],{"type":820},{"type":86,"attrs":6584},{"class":6501},{"type":145,"content":6586},[6587,6596],{"type":148,"content":6588},[6589],{"type":72,"content":6590},[6591],{"text":6592,"type":76,"marks":6593},"quick access to funds",[6594],{"type":86,"attrs":6595},{"class":6501},{"type":148,"content":6597},[6598],{"type":72,"content":6599},[6600],{"text":6601,"type":76},"no collateral required",{"type":72,"content":6603},[6604],{"text":6531,"type":76,"marks":6605},[6606,6607],{"type":820},{"type":86,"attrs":6608},{"class":6501},{"type":145,"content":6610},[6611,6620],{"type":148,"content":6612},[6613],{"type":72,"content":6614},[6615],{"text":6616,"type":76,"marks":6617},"variable interest rates",[6618],{"type":86,"attrs":6619},{"class":6501},{"type":148,"content":6621},[6622],{"type":72,"content":6623},[6624],{"text":6625,"type":76},"the risk of over-borrowing past your means, leading to further debt",{"type":105,"attrs":6627,"content":6628},{"level":123},[6629],{"text":6630,"type":76,"marks":6631},"Home equity loan",[6632],{"type":820},{"type":72,"content":6634},[6635],{"text":6636,"type":76},"A home equity loan is another financial option for homeowners. This allows someone to borrow money based on the equity they have in their home. Equity is determined by the home’s current market value and the balance of the remaining mortgage loan.",{"type":72,"content":6638},[6639],{"text":6580,"type":76,"marks":6640},[6641,6642],{"type":820},{"type":86,"attrs":6643},{"class":6501},{"type":145,"content":6645},[6646,6655],{"type":148,"content":6647},[6648],{"type":72,"content":6649},[6650],{"text":6651,"type":76,"marks":6652},"fixed payments with fixed interest rates",[6653],{"type":86,"attrs":6654},{"class":6501},{"type":148,"content":6656},[6657],{"type":72,"content":6658},[6659],{"text":6660,"type":76},"access to a lump sum of money",{"type":72,"content":6662},[6663],{"text":6531,"type":76,"marks":6664},[6665,6666],{"type":820},{"type":86,"attrs":6667},{"class":6501},{"type":145,"content":6669},[6670],{"type":148,"content":6671},[6672],{"type":72,"content":6673},[6674],{"text":6675,"type":76},"leveraging debt against your home, which can lead to foreclosure if loan payments are not met.",{"type":105,"attrs":6677,"content":6678},{"level":123},[6679],{"text":6680,"type":76,"marks":6681},"Home equity line of credit (HELOC)",[6682],{"type":820},{"type":72,"content":6684},[6685],{"text":6686,"type":76},"A home equity line of credit (HELOC) is similar to a home equity loan. The major difference is that a HELOC is a revolving line of credit instead of a lump sum of money. Borrowers pay based on what they use. ",{"type":72,"content":6688},[6689],{"text":6580,"type":76,"marks":6690},[6691,6692],{"type":820},{"type":86,"attrs":6693},{"class":6501},{"type":145,"content":6695},[6696,6705],{"type":148,"content":6697},[6698],{"type":72,"content":6699},[6700],{"text":6701,"type":76,"marks":6702},"borrowing & paying back only what you need",[6703],{"type":86,"attrs":6704},{"class":6501},{"type":148,"content":6706},[6707],{"type":72,"content":6708},[6709],{"text":6710,"type":76},"access to a large sum",{"type":72,"content":6712},[6713],{"text":6531,"type":76,"marks":6714},[6715,6716],{"type":820},{"type":86,"attrs":6717},{"class":6501},{"type":145,"content":6719},[6720,6729],{"type":148,"content":6721},[6722],{"type":72,"content":6723},[6724],{"text":6725,"type":76,"marks":6726},"Variable interest rates",[6727],{"type":86,"attrs":6728},{"class":6501},{"type":148,"content":6730},[6731],{"type":72,"content":6732},[6733],{"text":6734,"type":76},"Using your home as collateral.",{"type":105,"attrs":6736,"content":6737},{"level":107},[6738],{"text":6739,"type":76,"marks":6740},"How Navient Marketplace can help",[6741],{"type":820},{"type":72,"content":6743},[6744],{"text":6745,"type":76},"A personal loan may be a great option for someone that needs access to funds quickly. They can be used for almost anything, including home renovations, travel, a wedding, or even as a debt consolidation loan. They are a type of installment loan which means they can be paid down monthly based on the loan term.",{"type":72,"content":6747},[6748,6750,6755],{"text":6749,"type":76},"If you think a personal loan is right for you, Navient is worth considering. We’re an industry leader in loan originations and loan servicing, and we’ve recently partnered with top-tiered financial institutions to build a one-stop shop called ",{"text":739,"type":76,"marks":6751},[6752],{"type":188,"attrs":6753},{"href":743,"uuid":91,"anchor":91,"custom":6754,"target":191,"linktype":192},{},{"text":6756,"type":76}," that can help you choose the option that fits you best.",{"type":72,"content":6758},[6759,6761,6766],{"text":6760,"type":76},"If you are ready to take the next step in receiving a personal loan, visit ",{"text":739,"type":76,"marks":6762},[6763],{"type":188,"attrs":6764},{"href":743,"uuid":91,"anchor":91,"custom":6765,"target":191,"linktype":192},{},{"text":6767,"type":76}," and start the process today.",{"type":72,"content":6769},[6770],{"text":761,"type":76,"marks":6771},[6772],{"type":86,"attrs":6773},{"class":765},{"type":69,"content":6775},[6776],{"type":72},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": 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\"651798212\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":3295,"cols":18,"height":18,"classes":865,"columns":6812,"justify":18,"maxWidth":882,"component":883,"colClasses":884,"rowClasses":18,"mobileClasses":885,"backgroundColor":18,"backgroundImage":6821,"containerClasses":18,"useBackgroundImage":45,"_editable":6822},[6813],{"_uid":3298,"component":869,"backToTopBtn":6814,"_editable":6820},[6815],{"url":6816,"_uid":3302,"icon":6817,"text":876,"color":32,"event":18,"sizing":6818,"classes":878,"rounded":45,"outlined":45,"component":879,"textColor":828,"hoverBgColor":828,"mobileClasses":18,"hoverTextColor":839,"navigationType":18,"_editable":6819},{"id":18,"url":18,"linktype":873,"fieldtype":834,"cached_url":18},{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798212\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798212\"}-->",{"id":91,"alt":91,"name":18,"focus":91,"title":91,"filename":18,"copyright":91,"fieldtype":837},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798212\"}-->","Personal Loans","https://www.marketplace.navient.com/blog/what-is-a-personal-loan/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798212\"}-->","what-is-a-personal-loan","navient_marketplace/blog/what-is-a-personal-loan",80,[],"724f1f5c-5b59-4468-a144-04b70d9fc3de","2023-02-28T18:40:14.095Z","blog/what-is-a-personal-loan/",[],{"name":6835,"created_at":6836,"published_at":6837,"updated_at":6838,"id":6839,"uuid":6840,"content":6841,"slug":7434,"full_slug":7435,"sort_by_date":91,"position":7436,"tag_list":7437,"is_startpage":45,"parent_id":896,"meta_data":91,"group_id":7438,"first_published_at":7439,"release_id":91,"lang":899,"path":7440,"alternates":7441,"default_full_slug":91,"translated_slugs":91},"Pros and Cons of Personal Loans","2025-04-07T18:31:43.540Z","2026-04-01T17:17:36.551Z","2026-04-01T17:17:36.571Z",651798213,"8a8dc044-267b-40fe-81b7-210d95a5024b",{"seo":6842,"_uid":1699,"body":6845,"author":1711,"category":6823,"featured":45,"component":889,"canonicalTag":7432,"_editable":7433},{"_uid":1696,"title":6843,"plugin":17,"og_image":18,"og_title":18,"description":6844,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Pros and Cons of Personal Loans - Navient Marketplace","Personal loans are ideal for debt consolidation, but they can be hard on borrowers with poor credit. Get the other pros and cons of personal loans here.",[6846,6854,7420],{"id":23,"_uid":2476,"image":6847,"intro":6848,"author":1705,"classes":6849,"category":18,"featured":45,"blogTitle":6835,"component":47,"imageLink":6852,"blendImage":45,"authorRoute":1711,"publishedDate":6015,"backgroundColor":51,"_editable":6853},"//a.storyblok.com/f/110029/800x533/20e434964b/pros-and-cons-of-personal-loans.png","To decide whether or not a personal loan works for you, you first have to understand the pros and cons of personal loans.",[6850],{"_uid":2482,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":2483,"authorClasses":35,"subtitleColor":36,"subtitleClasses":38,"dateMobileClasses":39,"titleMobileClasses":40,"authorMobileClasses":41,"featuredMobileClasses":42,"subtitleMobileClasses":43,"_editable":6851},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798213\"}-->","/images/pros-and-cons-of-personal-loans.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798213\"}-->",{"_uid":2490,"bloks":6855,"classes":859,"component":860,"mobileClasses":18,"containerContent":7418,"_editable":7419},[6856],{"_uid":2493,"bloks":6857,"classes":18,"justify":802,"component":857,"mobileClasses":18,"_editable":7417},[6858,7391],{"lg":60,"md":60,"sm":61,"_uid":2496,"cols":61,"bloks":6859,"alignSelf":802,"component":803,"_editable":7390},[6860],{"_uid":2499,"color":66,"classes":67,"content":18,"richText":6861,"component":795,"mobileClasses":796,"enableRichText":797,"richTextMobile":7386,"_editable":7389},{"type":69,"content":6862},[6863,6867,6873,6889,6902,6909,6913,6917,6924,6937,6944,6957,7018,7022,7029,7042,7049,7060,7067,7071,7078,7082,7089,7093,7100,7104,7111,7115,7122,7134,7141,7154,7161,7174,7216,7223,7227,7271,7277,7281,7287,7291,7295,7301,7305,7309,7316,7320,7324,7330,7334,7338,7344,7348,7352,7359,7363,7374,7380],{"type":72,"content":6864},[6865],{"text":6866,"type":76},"Do you have a wedding on the horizon? Are you finally starting those home renovations you’ve been planning for years? If so, you might be considering taking out a personal loan. Personal loans are a great way to get money when you need it fast. However, as with any type of loan, there’s also some risk involved. To decide whether or not it’s the best option for you, you first have to understand the pros and cons of personal loans.",{"type":105,"attrs":6868,"content":6869},{"level":107},[6870],{"text":6034,"type":76,"marks":6871},[6872],{"type":820},{"type":72,"content":6874},[6875,6877,6884,6888],{"text":6876,"type":76},"A personal loan is a type of installment loan, which means the borrower receives a lump sum of money that is repaid via monthly payments over an agreed-upon term length. Unlike auto loans and home loans, which have very narrow usage requirements, personal loans can be used for almost anything. Some popular uses include medical bills, home improvements or repairs, and other large purchases. Personal loans can also be used as a pathway for ",{"text":6878,"type":76,"marks":6879},"debt consolidation",[6880],{"type":188,"attrs":6881},{"href":6882,"uuid":91,"anchor":91,"custom":6883,"target":191,"linktype":192},"https://www.earnest.com/blog/what-is-debt-consolidation/",{},{"text":83,"type":76,"marks":6885},[6886],{"type":86,"attrs":6887},{"class":88},{"text":198,"type":76},{"type":72,"content":6890},[6891,6893,6900],{"text":6892,"type":76},"Personal loans are distributed by online lenders, banks, credit unions, and other financial institutions. Interest rates on personal loans can vary widely, but they often ",{"text":6894,"type":76,"marks":6895},"hover around 9% and 10%",[6896],{"type":188,"attrs":6897},{"href":6898,"uuid":91,"anchor":91,"custom":6899,"target":191,"linktype":192},"https://www.bankrate.com/loans/personal-loans/pros-cons-of-personal-loans/#pros",{},{"text":6901,"type":76},". Most lenders will make you an interest rate offer depending on your credit score, loan term, and requested loan amount.",{"type":105,"attrs":6903,"content":6904},{"level":123},[6905],{"text":6906,"type":76,"marks":6907},"Secured versus unsecured personal loans",[6908],{"type":820},{"type":72,"content":6910},[6911],{"text":6912,"type":76},"There are two types of personal loans: secured and unsecured. With secured personal loans, you’ll need to exchange some type of collateral with the lender in return for the requested loan amount. This could be, for example, a home, car, stock market holdings, etc. This offers the lender some assurance that they’ll recoup the value of the borrowed funds, and they’ll hold onto your collateral until the loan is paid in full.",{"type":72,"content":6914},[6915],{"text":6916,"type":76},"An unsecured personal loan does not require collateral to back the loan. Instead, these are approved based on the creditworthiness of the borrower. Because unsecured loans are riskier for the lender, they typically carry higher interest rates than secured loans.",{"type":105,"attrs":6918,"content":6919},{"level":107},[6920],{"text":6921,"type":76,"marks":6922},"The advantages of a personal loan",[6923],{"type":820},{"type":72,"content":6925},[6926,6928,6935],{"text":6927,"type":76},"Personal loans can have ",{"text":6929,"type":76,"marks":6930},"many advantages",[6931],{"type":188,"attrs":6932},{"href":6933,"uuid":91,"anchor":91,"custom":6934,"target":191,"linktype":192},"https://www.forbes.com/advisor/personal-loans/pros-and-cons-of-personal-loans/",{},{"text":6936,"type":76}," for borrowers under the right circumstances. Let’s take a look at a few.",{"type":105,"attrs":6938,"content":6939},{"level":123},[6940],{"text":6941,"type":76,"marks":6942},"Flexibility",[6943],{"type":820},{"type":72,"content":6945},[6946,6948,6955],{"text":6947,"type":76},"Personal loans can be ",{"text":6949,"type":76,"marks":6950},"used for almost anything",[6951],{"type":188,"attrs":6952},{"href":6953,"uuid":91,"anchor":91,"custom":6954,"target":191,"linktype":192},"https://lanterncredit.com/personal-loans/pros-and-cons-of-personal-loans",{},{"text":6956,"type":76},", from organizing your personal finances via debt consolidation to covering an emergency expense. Here are a few of the most common uses.",{"type":145,"content":6958},[6959,6969,6979,6989,6998,7008],{"type":148,"content":6960},[6961],{"type":72,"content":6962},[6963,6967],{"text":6964,"type":76,"marks":6965},"Home Renovations",[6966],{"type":820},{"text":6968,"type":76},": Thanks to materials and labor shortages, the cost of home improvements has been soaring. Remodeling a bathroom or kitchen can cost thousands of dollars. If you need to make a critical repair or add value to your home ahead of a property revaluation, and using a credit card or payment plan is not an option, a personal loan offers one solution.",{"type":148,"content":6970},[6971],{"type":72,"content":6972},[6973,6977],{"text":6974,"type":76,"marks":6975},"Moving costs",[6976],{"type":820},{"text":6978,"type":76},": Moving expenses can add up quickly. A personal loan can help you cover the cost of shipping your belongings, transporting your vehicle, or even purchasing new furniture.",{"type":148,"content":6980},[6981],{"type":72,"content":6982},[6983,6987],{"text":6984,"type":76,"marks":6985},"Weddings",[6986],{"type":820},{"text":6988,"type":76},": Your dream wedding doesn’t come cheap. In fact, the average wedding cost in 2021 was around $28,000. A personal loan can help you cover the venue, photographer, catering, and other fees. ",{"type":148,"content":6990},[6991],{"type":72,"content":6992},[6993,6996],{"text":6139,"type":76,"marks":6994},[6995],{"type":820},{"text":6997,"type":76},": If you’re juggling multiple high-interest-rate credit card balances, you can use a personal loan to consolidate and therefore simplify your credit card debt. This can be a smart financial decision for someone with credit cards that carry a high interest rate, since you can often get a lower rate on a personal loan. In some cases, that could help you save thousands of dollars over the life of the loan. ",{"type":148,"content":6999},[7000],{"type":72,"content":7001},[7002,7006],{"text":7003,"type":76,"marks":7004},"Buying a Vehicle",[7005],{"type":820},{"text":7007,"type":76},": Typically, when purchasing a car from a dealership, an auto loan will give you more favorable rates and terms than a personal loan. However, if you’re purchasing a vehicle from a private party and auto financing is not an option, a personal loan can be a good alternative. ",{"type":148,"content":7009},[7010],{"type":72,"content":7011},[7012,7016],{"text":7013,"type":76,"marks":7014},"Other Large Purchases",[7015],{"type":820},{"text":7017,"type":76},": Sometimes, unavoidable circumstances arise that require an immediate remedy. If your transmission blows out on your only car, or your home’s HVAC unit stops working in the middle of winter, you need a solution fast. Personal loans can get you back up and running quickly.",{"type":72,"content":7019},[7020],{"text":7021,"type":76},"Of course, there are also some cases where you would not want to use a personal loan. For instance, making a down payment on a house or purchasing a car from a dealership are both situations where you can obtain lower interest rate loans from other sources.",{"type":105,"attrs":7023,"content":7024},{"level":123},[7025],{"text":7026,"type":76,"marks":7027},"Lower interest rates on average",[7028],{"type":820},{"type":72,"content":7030},[7031,7033,7040],{"text":7032,"type":76},"Personal loans tend to have competitive interest rates when compared with other lines of credit. For instance, credit cards carried an average interest rate of 16.5% in 2021 according to ",{"text":7034,"type":76,"marks":7035},"data collected",[7036],{"type":188,"attrs":7037},{"href":7038,"uuid":91,"anchor":91,"custom":7039,"target":191,"linktype":192},"https://www.federalreserve.gov/releases/g19/current/",{},{"text":7041,"type":76}," by the Federal Reserve. Data from this same time period showed a 24-month personal loan rate average of about 9.5%. The interest rate you’re offered will be dictated by your loan principal, loan term, and other aspects of your financial situation, including your credit score as reported by the major credit bureaus. Borrowers with poor credit may receive interest rates well higher than the average.",{"type":105,"attrs":7043,"content":7044},{"level":123},[7045],{"text":7046,"type":76,"marks":7047},"One lump sum",[7048],{"type":820},{"type":72,"content":7050},[7051,7058],{"text":7052,"type":76,"marks":7053},"Another benefit",[7054],{"type":188,"attrs":7055},{"href":7056,"uuid":91,"anchor":91,"custom":7057,"target":191,"linktype":192},"https://www.moneygeek.com/personal-loans/pros-and-cons/",{},{"text":7059,"type":76}," of a personal loan is that the money is provided in one lump sum. This gives you ultimate flexibility to make large purchases or cover other expenses. That’s in contrast to something like a credit card, which doles out credit over time and may have lower limits than you need. With a personal loan, you get the money upfront and can use it immediately.",{"type":105,"attrs":7061,"content":7062},{"level":123},[7063],{"text":7064,"type":76,"marks":7065},"Quick approval process",[7066],{"type":820},{"type":72,"content":7068},[7069],{"text":7070,"type":76},"The approval process for a personal loan is pretty fast — usually only about 24 hours. As with other types of loans, you’ll have to submit some personal information, and the lender will likely check your credit report, which may affect your credit score. They’ll also verify your employment and home address and analyze any other outstanding debts you may have to assess your creditworthiness.",{"type":105,"attrs":7072,"content":7073},{"level":123},[7074],{"text":7075,"type":76,"marks":7076},"May not require collateral",[7077],{"type":820},{"type":72,"content":7079},[7080],{"text":7081,"type":76},"Unsecured personal loans do not require collateral. As such, they typically carry higher interest charges than secured personal loans because they pose more risk for the lender. However, if your personal finances are in good standing, you could still receive a competitive rate without having to leverage any of your assets to receive the loan.",{"type":105,"attrs":7083,"content":7084},{"level":123},[7085],{"text":7086,"type":76,"marks":7087},"Reasonable monthly payments",[7088],{"type":820},{"type":72,"content":7090},[7091],{"text":7092,"type":76},"Personal loans often have longer loan terms than other financing options. This makes monthly payments more reasonable for the borrower. The longer the term, the lower the monthly payment. At the same time, it’s important to remember that with a longer term, you’ll ultimately pay more in interest over the life of the loan.",{"type":105,"attrs":7094,"content":7095},{"level":123},[7096],{"text":7097,"type":76,"marks":7098},"Useful for refinancing",[7099],{"type":820},{"type":72,"content":7101},[7102],{"text":7103,"type":76},"If you have credit card debt or other existing types of debt, a personal loan can provide a way to refinance or consolidate it. This can simplify your monthly payments and even save you money by helping you secure a lower interest rate, switch from a fixed to a variable interest rate, or select a new loan term.",{"type":105,"attrs":7105,"content":7106},{"level":107},[7107],{"text":7108,"type":76,"marks":7109},"The disadvantages of a personal loan",[7110],{"type":820},{"type":72,"content":7112},[7113],{"text":7114,"type":76},"Personal loans can offer immediate financial relief for all kinds of borrowers, but they’re not right for everyone. Here are a few cons of personal loans to consider before you move forward.",{"type":105,"attrs":7116,"content":7117},{"level":123},[7118],{"text":7119,"type":76,"marks":7120},"Hard on borrowers with bad credit",[7121],{"type":820},{"type":72,"content":7123},[7124,7126,7133],{"text":7125,"type":76},"Personal loans tend to have higher interest rates for borrowers with poor credit. If you have a low credit score, (possible if your credit history includes bankruptcies, spotty payment history, or other high balances) personal loans might not be your best option. If you’re not sure what your credit score is, you can check your credit report by requesting it from the major credit bureaus (Transunion, Equifax, and Experian). You can do this once per year for free via ",{"text":7127,"type":76,"marks":7128},"annualcreditreport.com",[7129],{"type":188,"attrs":7130},{"href":7131,"uuid":91,"anchor":91,"custom":7132,"target":191,"linktype":192},"https://www.annualcreditreport.com/index.action",{},{"text":198,"type":76},{"type":105,"attrs":7135,"content":7136},{"level":123},[7137],{"text":7138,"type":76,"marks":7139},"Strict eligibility requirements",[7140],{"type":820},{"type":72,"content":7142},[7143,7145,7152],{"text":7144,"type":76},"Personal loans can require more from potential borrowers than other types of loans. Some lenders require an individual to have a minimum credit score of 600 and a ",{"text":7146,"type":76,"marks":7147},"debt-to-income ratio",[7148],{"type":188,"attrs":7149},{"href":7150,"uuid":91,"anchor":91,"custom":7151,"target":191,"linktype":192},"https://www.lendingtree.com/personal/personal-loan-are-you-a-good-candidate/#:~:text=Personal%20loan%20eligibility%3A%20FAQ,-Am%20I%20eligible&text=Many%20lenders%20typically%20require%20that,in%20to%20understand%20the%20specifics.",{},{"text":7153,"type":76}," no more than 35%. Each lender is different, but some have fairly stringent requirements that may make them harder to qualify for.",{"type":105,"attrs":7155,"content":7156},{"level":123},[7157],{"text":7158,"type":76,"marks":7159},"Potentially high fees",[7160],{"type":820},{"type":72,"content":7162},[7163,7165,7172],{"text":7164,"type":76},"Some personal loans also carry ",{"text":7166,"type":76,"marks":7167},"fees",[7168],{"type":188,"attrs":7169},{"href":7170,"uuid":91,"anchor":91,"custom":7171,"target":191,"linktype":192},"https://www.experian.com/blogs/ask-experian/personal-loan-fees-you-should-watch-out-for/",{},{"text":7173,"type":76},", which can add up and inflate the cost, making monthly payments untenable for some borrowers. A few common fees include",{"type":145,"content":7175},[7176,7186,7196,7206],{"type":148,"content":7177},[7178],{"type":72,"content":7179},[7180,7184],{"text":7181,"type":76,"marks":7182},"Origination fees: ",[7183],{"type":820},{"text":7185,"type":76},"Some banks, credit unions, or other lenders will charge a loan origination fee to cover costs associated with processing the loan. These fees will often be added to the total loan amount. Origination fees are usually a percentage (1 to 6%) of the total amount borrowed.",{"type":148,"content":7187},[7188],{"type":72,"content":7189},[7190,7194],{"text":7191,"type":76,"marks":7192},"Application fees",[7193],{"type":820},{"text":7195,"type":76},": These cover the initial expense of processing and reviewing your loan application. Application fees are typically an upfront cost, and won’t be refunded even if the applicant does not qualify for the loan. While these fees are uncommon for personal loans, it’s still a good idea to ask before you apply.",{"type":148,"content":7197},[7198],{"type":72,"content":7199},[7200,7204],{"text":7201,"type":76,"marks":7202},"Prepayment penalties: ",[7203],{"type":820},{"text":7205,"type":76},"Some lenders charge a penalty if the borrower pays off their loan before the end of their loan term. This helps the lender recoup the cost of the interest you would have paid over the full term. Prepayment penalties are usually a small percentage of the original loan amount.",{"type":148,"content":7207},[7208],{"type":72,"content":7209},[7210,7214],{"text":7211,"type":76,"marks":7212},"Late fees: ",[7213],{"type":820},{"text":7215,"type":76},"These are common across many types of loans, including personal loans. You could incur these by missing a monthly payment or failing to pay off the loan in full by the end of the term. Late fees are usually a flat fee but can also be a percentage of the monthly payment amount, depending on the conditions of the financial institution.",{"type":105,"attrs":7217,"content":7218},{"level":107},[7219],{"text":7220,"type":76,"marks":7221},"Is a personal loan right for me?",[7222],{"type":820},{"type":72,"content":7224},[7225],{"text":7226,"type":76},"A personal loan can be helpful for borrowers who fit the right criteria. You likely are a good candidate for a personal loan if:",{"type":145,"content":7228},[7229,7238,7247,7256,7265],{"type":148,"content":7230},[7231],{"type":72,"content":7232},[7233],{"text":7234,"type":76,"marks":7235},"You have high-interest debt that would benefit from consolidation.",[7236],{"type":86,"attrs":7237},{"class":6501},{"type":148,"content":7239},[7240],{"type":72,"content":7241},[7242],{"text":7243,"type":76,"marks":7244},"You have a good credit score or have collateral to leverage.",[7245],{"type":86,"attrs":7246},{"class":6501},{"type":148,"content":7248},[7249],{"type":72,"content":7250},[7251],{"text":7252,"type":76,"marks":7253},"You have a reliable source of income and can meet your monthly payments.",[7254],{"type":86,"attrs":7255},{"class":6501},{"type":148,"content":7257},[7258],{"type":72,"content":7259},[7260],{"text":7261,"type":76,"marks":7262},"Your debt-to-income ratio is lower than 35%.",[7263],{"type":86,"attrs":7264},{"class":6501},{"type":148,"content":7266},[7267],{"type":72,"content":7268},[7269],{"text":7270,"type":76},"You have a reliable track record of making on-time payments.",{"type":105,"attrs":7272,"content":7273},{"level":107},[7274],{"text":6475,"type":76,"marks":7275},[7276],{"type":820},{"type":72,"content":7278},[7279],{"text":7280,"type":76},"There are many alternatives to personal loans. Depending on your financial situation, some of these could be better options. Here are a few of the most common.",{"type":105,"attrs":7282,"content":7283},{"level":123},[7284],{"text":6486,"type":76,"marks":7285},[7286],{"type":820},{"type":72,"content":7288},[7289],{"text":7290,"type":76},"A credit card is a revolving line of credit offered by a financial institution. Credit cards can be used to make everyday purchases. They carry a max spending limit based on the creditworthiness of the cardholder. If you make your monthly payments on time, you won’t usually incur any fees. If you just make the minimum monthly payment, your remaining balance will be carried into the next month. Your interest then compounds and can add to the balance due.",{"type":72,"content":7292},[7293],{"text":7294,"type":76},"Credit cards sometimes carry great perks, such as cash-back and travel rewards. They can offer low introductory rates such as 0% APR for the first 12 months. However, many start to charge high interest rates after that introductory period. Credit cards are great for everyday use as long as you can keep up with the payments. Otherwise, compounding interest and late payments can quickly inflate your overall debt.",{"type":105,"attrs":7296,"content":7297},{"level":123},[7298],{"text":6566,"type":76,"marks":7299},[7300],{"type":820},{"type":72,"content":7302},[7303],{"text":7304,"type":76},"A personal line of credit (PLOC) is similar to a credit card. In this agreement, an individual receives a spending limit and repays their total monthly expenses at the end of each month. However, unlike a credit card, a borrower may withdraw funds from their PLOC.",{"type":72,"content":7306},[7307],{"text":7308,"type":76},"A PLOC is a type of term loan. This means that the loan has an expiration date. If your loan term is two years, for example, the PLOC balance must be paid back in full at the end of those two years. A PLOC might be a good choice for you if you’re expecting a large expenditure and happen to qualify for a lower interest rate. To find out, you can contact your bank, credit union, or another financial institution.",{"type":105,"attrs":7310,"content":7311},{"level":123},[7312],{"text":7313,"type":76,"marks":7314},"Payday loan",[7315],{"type":820},{"type":72,"content":7317},[7318],{"text":7319,"type":76},"A payday loan is a short-term loan, typically around $500 or less, that’s due within a week or two of the borrowing date. The loan is usually repaid in a single payment once the borrower receives their next paycheck. This type of loan generally carries high fees. Lenders may charge $10 to $30 for every $100 you borrow, which is an extremely high percentage given the small loan amounts.",{"type":72,"content":7321},[7322],{"text":7323,"type":76},"This type of loan is typically used as an advance on a paycheck that is guaranteed to come in. 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