[{"data":1,"prerenderedAt":5858},["Reactive",2],{"/":3},{"data":4,"headers":5830,"perPage":5856,"total":5857},{"stories":5,"cv":5827,"rels":5828,"links":5829},[6,893,1653,2431,3150,4071,4680,5160],{"name":7,"created_at":8,"published_at":9,"updated_at":10,"id":11,"uuid":12,"content":13,"slug":884,"full_slug":885,"sort_by_date":83,"position":886,"tag_list":887,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":889,"first_published_at":890,"release_id":83,"lang":891,"path":83,"alternates":892,"default_full_slug":83,"translated_slugs":83},"Should I Get a Personal Loan? When it is (and isn't) a Good Idea","2025-04-07T18:31:45.224Z","2026-04-01T17:18:06.692Z","2026-04-01T17:18:06.715Z",651798214,"b486e7e0-9f13-4998-bc13-df9edbd92e8e",{"seo":14,"_uid":20,"body":21,"author":48,"category":880,"featured":44,"component":881,"canonicalTag":882,"_editable":883},{"_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},"6e279110-4da0-48c0-8e96-3269c04f3ee5","Should I Get a Personal Loan? When it is (and isn’t) a Good Idea - Navient Marketplace","seo_metatags","","Are you wondering, \"Should I get a personal loan?\" Here are some situations when it makes sense, and when it doesn't make sense, to get a personal loan.","24614723-3c23-4d4f-990b-c49a1b45edce",[22,52,855],{"id":23,"_uid":24,"image":25,"intro":26,"author":27,"classes":28,"category":18,"featured":44,"blogTitle":45,"component":46,"imageLink":47,"blendImage":44,"authorRoute":48,"publishedDate":49,"backgroundColor":50,"_editable":51},"blog-hero","02557530-adb9-49fb-9319-277497a70cb8","//a.storyblok.com/f/110029/800x534/820b664c8e/should-i-get-a-personal-loan.png","Used wisely, a personal loan can help cover gaps in your budget without putting your home or other assets at risk.","Monica Milone",[29],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":43},"6bc0d925-925b-40e2-8cb5-ac30d0086187","BlogHeroStyle","#470A68","text-subtitle-2 mt-7 accent--text text--darken-2","text-h4 mt-6 font-weight-bold","text-size-sub-1 mt-7 accent--text text--darken-4","#75478E","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\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798214\"}-->",false,"Should I Get a Personal Loan? When it is (and isn’t) a Good Idea","BlogHero","/images/should-i-get-a-personal-loan.png","monica-milone","Updated: February 16, 2023","#F6F2F7","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798214\"}-->",{"_uid":53,"bloks":54,"classes":851,"component":852,"mobileClasses":18,"containerContent":853,"_editable":854},"222843d6-4c0d-4ac3-aa5f-7f579c49c5fe",[55],{"_uid":56,"bloks":57,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":850},"0737a92f-e416-438d-b8db-1c0e86499923",[58,665,714,805],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":62,"alignSelf":662,"component":663,"_editable":664},"7","12","c286affa-ee04-4348-8508-6e9f77932903",[63],{"_uid":64,"color":65,"classes":66,"content":18,"richText":67,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":658,"_editable":661},"a64c4df0-154e-4c12-b867-678d292709f4","#444444","blog-post-text blog-post-headers",{"type":68,"content":69},"doc",[70,98,102,112,151,158,162,175,179,201,208,212,250,254,262,266,279,283,287,294,298,305,318,322,329,333,341,345,352,356,363,374,381,385,392,396,403,407,414,418,425,429,436,440,447,451,492,499,512,519,523,530,534,541,563,576,580,587,600,622,629,633,640,644,651],{"type":71,"content":72},"paragraph",[73,76,87,89,96],{"text":74,"type":75},"If you need extra cash to cover a large purchase, pay for ","text",{"text":77,"type":75,"marks":78},"home improvements",[79],{"type":80,"attrs":81},"link",{"href":82,"uuid":83,"anchor":83,"custom":84,"target":85,"linktype":86},"https://www.bankrate.com/loans/home-improvement/rates/",null,{},"_blank","url",{"text":88,"type":75},", finance a wedding, or ",{"text":90,"type":75,"marks":91},"consolidate high-interest debt",[92],{"type":80,"attrs":93},{"href":94,"uuid":83,"anchor":83,"custom":95,"target":85,"linktype":86},"https://www.bankrate.com/personal-finance/debt/what-is-debt-consolidation/ ",{},{"text":97,"type":75},", you might want to consider a personal loan. Used wisely, a personal loan can help cover gaps in your budget without putting your home or other assets at risk.",{"type":71,"content":99},[100],{"text":101,"type":75},"As with other loans, interest rates for personal loans hinge on various aspects of your financial portfolio, including your credit score, payment history, and debt-to-income ratio. That means they’re not the right choice for everyone. But if you have some savings and decent money habits, a personal loan could be a valuable tool for getting your debts under control and reaching your other financial goals.",{"type":103,"attrs":104,"content":106},"heading",{"level":105},2,[107],{"text":108,"type":75,"marks":109},"Should I get a personal loan? Key takeaways:",[110],{"type":111},"bold",{"type":113,"content":114},"bullet_list",[115,127,136,145],{"type":116,"content":117},"list_item",[118],{"type":71,"content":119},[120],{"text":121,"type":75,"marks":122},"You can use a personal loan for almost any purpose, including debt consolidation, home improvements, and emergency expenses.",[123],{"type":124,"attrs":125},"styled",{"class":126},"no-margin-bottom",{"type":116,"content":128},[129],{"type":71,"content":130},[131],{"text":132,"type":75,"marks":133},"Personal loans typically have lower interest rates than most credit cards.",[134],{"type":124,"attrs":135},{"class":126},{"type":116,"content":137},[138],{"type":71,"content":139},[140],{"text":141,"type":75,"marks":142},"Applicants with high credit scores and low debt often get the lowest rates.",[143],{"type":124,"attrs":144},{"class":126},{"type":116,"content":146},[147],{"type":71,"content":148},[149],{"text":150,"type":75},"It’s important to have a clear repayment strategy any time you take out a personal loan.",{"type":103,"attrs":152,"content":153},{"level":105},[154],{"text":155,"type":75,"marks":156},"How do personal loans work?",[157],{"type":111},{"type":71,"content":159},[160],{"text":161,"type":75},"Personal loans are a type of credit issued by a bank, credit union, online lender, or other financial institution. Unlike mortgage loans or car loans, personal loans can be used for a wide variety of purposes. They’re considered installment loans, which means that if you’re approved, you’ll receive the loan in a single lump sum. You’ll then pay that money back (with interest) in monthly payments, or “installments,” over the life of the loan.",{"type":71,"content":163},[164,166,173],{"text":165,"type":75},"Once you pay off your personal loan in full, your account will be closed. This makes personal loans different from credit cards, which are a ",{"text":167,"type":75,"marks":168},"type of revolving credit",[169],{"type":80,"attrs":170},{"href":171,"uuid":83,"anchor":83,"custom":172,"target":85,"linktype":86},"https://www.forbes.com/advisor/personal-finance/what-is-a-line-of-credit/",{},{"text":174,"type":75},". If you pay off a credit card but need to make another purchase, you can just use the card again. If you pay off a personal loan but need more money, you’ll have to apply for a brand-new personal loan.",{"type":71,"content":176},[177],{"text":178,"type":75},"There are two types of personal loans: secured and unsecured.",{"type":113,"content":180},[181,191],{"type":116,"content":182},[183],{"type":71,"content":184},[185,189],{"text":186,"type":75,"marks":187},"Unsecured personal loans",[188],{"type":111},{"text":190,"type":75}," don’t require collateral. Rather, the lender decides whether or not you qualify based on your financial history and credit score. If you don’t qualify for an unsecured loan or want a lower interest rate, some lenders also offer secured loans.",{"type":116,"content":192},[193],{"type":71,"content":194},[195,199],{"text":196,"type":75,"marks":197},"Secured personal loans",[198],{"type":111},{"text":200,"type":75}," are backed by collateral, like a savings account or certificate of deposit (CD). If you don’t repay your secured loan on time, the lender could seize your asset as payment. This makes secured loans riskier for the borrower but less risky for the lender. For that reason, lenders typically offer lower interest rates for secured loans than they do for unsecured loans.",{"type":103,"attrs":202,"content":203},{"level":105},[204],{"text":205,"type":75,"marks":206},"When a personal loan makes sense",[207],{"type":111},{"type":71,"content":209},[210],{"text":211,"type":75},"A personal loan makes sense when all four of the following are true: ",{"type":213,"attrs":214,"content":216},"ordered_list",{"order":215},1,[217,226,235,244],{"type":116,"content":218},[219],{"type":71,"content":220},[221],{"text":222,"type":75,"marks":223},"You need cash for a specific, necessary expense — like remodeling a house or paying off high-interest credit cards.",[224],{"type":124,"attrs":225},{"class":126},{"type":116,"content":227},[228],{"type":71,"content":229},[230],{"text":231,"type":75,"marks":232},"You need the cash now.",[233],{"type":124,"attrs":234},{"class":126},{"type":116,"content":236},[237],{"type":71,"content":238},[239],{"text":240,"type":75,"marks":241},"Some debt is unavoidable.",[242],{"type":124,"attrs":243},{"class":126},{"type":116,"content":245},[246],{"type":71,"content":247},[248],{"text":249,"type":75},"It’s less expensive than other forms of credit.",{"type":71,"content":251},[252],{"text":253,"type":75},"Here’s a breakdown of some common situations that necessitate personal loans. Take a look through each example to help you further evaluate whether or not a personal loan makes sense for you.",{"type":103,"attrs":255,"content":257},{"level":256},3,[258],{"text":259,"type":75,"marks":260},"High-interest debt refinancing",[261],{"type":111},{"type":71,"content":263},[264],{"text":265,"type":75},"You can use a personal loan to do a DIY refinance of high-interest debts. Here’s how it works: you take a personal loan at a low or moderate interest rate, then use that cash to pay off your credit cards or other debts. When that’s done, you only have to worry about paying off your lower-interest-rate personal loan.",{"type":71,"content":267},[268,270,277],{"text":269,"type":75},"Personal loans are a good choice for refinancing because they typically have lower interest rates than short-term loans like title loans or payday loans. They’re also much less expensive to pay off than most credit card debt. As of Aug 2022, the ",{"text":271,"type":75,"marks":272},"average personal loan interest rate",[273],{"type":80,"attrs":274},{"href":275,"uuid":83,"anchor":83,"custom":276,"target":85,"linktype":86},"https://www.federalreserve.gov/releases/g19/current/",{},{"text":278,"type":75}," was 10.16%, while the average credit card rate was 18.43%. With that kind of difference, a personal loan could help you save a ton of money in interest charges.",{"type":71,"content":280},[281],{"text":282,"type":75},"For example, say you’re a borrower with good credit. You have two credit cards with a total balance of $30,000 and a combined interest rate of 18%. Right now, you pay $500 toward each card every month. However, if you refinance these debts by taking out a single personal loan with a 10% interest rate and a three-year term, you could save almost $4,000 over that time frame. You’ll also have a lower monthly payment and get out of debt faster.",{"type":71,"content":284},[285],{"text":286,"type":75},"Personal loans are also a better choice for debt refinancing than balance transfer cards. They’re typically processed more quickly than balance transfers, and they usually offer lower interest rates than you’ll find on most balance transfer cards. (Some balance transfer cards offer enticing, low-interest-rate introductory offers, but these usually end after a year, which could leave you with higher interest charges than you started with.) ",{"type":103,"attrs":288,"content":289},{"level":256},[290],{"text":291,"type":75,"marks":292},"Debt consolidation",[293],{"type":111},{"type":71,"content":295},[296],{"text":297,"type":75},"If you’re in a situation where you owe lots of different lenders, a personal loan can help you consolidate that debt, i.e., combine all your outstanding balances into one single bill. You can take out a personal loan, pay off your outstanding credit cards, and then make a single, simple payment to your new personal loan servicer each month. That makes your debt easier to manage, which could help you avoid accidental late fees and unnecessary interest charges.",{"type":103,"attrs":299,"content":300},{"level":256},[301],{"text":302,"type":75,"marks":303},"Emergency expenses",[304],{"type":111},{"type":71,"content":306},[307,309,316],{"text":308,"type":75},"If you need money right away and you don’t have an emergency fund available, personal loans could be a good option. They have a faster approval process than other types of loans, and they’re safer than title loans or payday loans, which are issued quickly but can have interest rates approaching 400%, ",{"text":310,"type":75,"marks":311},"per the Consumer Financial Protection Bureau",[312],{"type":80,"attrs":313},{"href":314,"uuid":83,"anchor":83,"custom":315,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-payday-loan-en-1567/ ",{},{"text":317,"type":75},".",{"type":71,"content":319},[320],{"text":321,"type":75},"Many personal loan lenders offer same-day or next-day funding. Others will deposit the loan amount in your bank account within a few business days. Often, it’s better to wait the extra day or two to receive the funds than risk an expensive title or payday loan.",{"type":103,"attrs":323,"content":324},{"level":256},[325],{"text":326,"type":75,"marks":327},"When other types of loans won’t cover your expense  ",[328],{"type":111},{"type":71,"content":330},[331],{"text":332,"type":75},"Some loans are created for specific purposes, like student loans, mortgage loans, and auto loans. Personal loans, however, are very flexible. When another type of loan won’t cover your costs at a better rate, a personal loan is a viable option. Some common uses include:",{"type":103,"attrs":334,"content":336},{"level":335},4,[337],{"text":338,"type":75,"marks":339},"Home improvement or home repairs",[340],{"type":111},{"type":71,"content":342},[343],{"text":344,"type":75},"Whether it’s a renovation or repair, home improvement is a common reason to take out a personal loan, particularly if the project adds value to your home. However, you may want to look into Home Equity Lines of Credit (HELOC) first to see if you can get a better deal. ",{"type":103,"attrs":346,"content":347},{"level":335},[348],{"text":349,"type":75,"marks":350},"Weddings and funerals",[351],{"type":111},{"type":71,"content":353},[354],{"text":355,"type":75},"Some people take out personal loans to cover unexpected expenses like weddings or funerals. If you have a stable income and a watertight plan to pay the loan back, this can be a good way to cover big upfront costs.",{"type":103,"attrs":357,"content":358},{"level":335},[359],{"text":360,"type":75,"marks":361},"Vehicle financing",[362],{"type":111},{"type":71,"content":364},[365,372],{"text":366,"type":75,"marks":367},"Auto loans",[368],{"type":80,"attrs":369},{"href":370,"uuid":83,"anchor":83,"custom":371,"target":85,"linktype":86},"https://www.forbes.com/advisor/auto-loans/auto-loan-calculator/",{},{"text":373,"type":75}," are available if you’re looking to buy or lease a car, but personal loans could help you cover any gaps. Auto loans tend to have lower interest rates compared to personal loans, but they are secured loans that use your vehicle as collateral. If you’re worried about missing payments and your car getting repossessed, a personal loan might be a better option for you.",{"type":103,"attrs":375,"content":376},{"level":335},[377],{"text":378,"type":75,"marks":379},"Moving costs",[380],{"type":111},{"type":71,"content":382},[383],{"text":384,"type":75},"If you’re moving out of state, you may need extra cash to cover moving expenses. These can include the costs of packing, hiring movers, and transporting your belongings.",{"type":103,"attrs":386,"content":387},{"level":335},[388],{"text":389,"type":75,"marks":390},"Large purchases",[391],{"type":111},{"type":71,"content":393},[394],{"text":395,"type":75},"If your refrigerator breaks or you need to replace the engine in your car, a personal loan can provide relief. But before you use a personal loan for a big expense, do a little math to make sure taking out the loan will actually save you money in the long run. If an emergency car repair will help you save on rental car and ride-share costs, for example, it might be worth taking out a personal loan to cover it, even despite the loan’s interest charges and fees.",{"type":103,"attrs":397,"content":398},{"level":105},[399],{"text":400,"type":75,"marks":401},"When a personal loan doesn’t make sense",[402],{"type":111},{"type":71,"content":404},[405],{"text":406,"type":75},"While personal loans can be a saving grace in times of need, they might not always fit your personal finance goals. Avoid a personal loan when:",{"type":103,"attrs":408,"content":409},{"level":256},[410],{"text":411,"type":75,"marks":412},"You can’t afford it",[413],{"type":111},{"type":71,"content":415},[416],{"text":417,"type":75},"Remember, you’ll still need to pay this loan back. If you can’t afford the monthly payments for a new personal loan, try to avoid borrowing money if at all possible.",{"type":103,"attrs":419,"content":420},{"level":256},[421],{"text":422,"type":75,"marks":423},"You don’t really need it",[424],{"type":111},{"type":71,"content":426},[427],{"text":428,"type":75},"If you’re trying to cover a discretionary or “nice to have” expense like an extravagant vacation, expensive home remodel, or over-the-top wedding, reconsider. Try scaling your budget back or putting off these expenses until you have more cash on hand.",{"type":103,"attrs":430,"content":431},{"level":256},[432],{"text":433,"type":75,"marks":434},"You have bad credit",[435],{"type":111},{"type":71,"content":437},[438],{"text":439,"type":75},"When you apply for a personal loan, the lender will check your credit history to assess your creditworthiness. If you have poor credit, the lender might only be able to offer you a high interest rate. You may still qualify for a secured personal loan, but you’ll have to offer up collateral that the lender can claim if you don’t repay your loan on time. This collateral can include your car, home, or savings account. In these cases, it’s best to avoid taking out a personal loan.",{"type":103,"attrs":441,"content":442},{"level":256},[443],{"text":444,"type":75,"marks":445},"You’re paying off medical bills",[446],{"type":111},{"type":71,"content":448},[449],{"text":450,"type":75},"Personal loans are rarely the best option for paying off medical bills. Instead, try one of these low- or no-interest methods.",{"type":113,"content":452},[453,463,482],{"type":116,"content":454},[455],{"type":71,"content":456},[457,461],{"text":458,"type":75,"marks":459},"Payment plans:",[460],{"type":111},{"text":462,"type":75}," Ask your doctor’s office if you can set up a payment plan that splits a large bill into smaller monthly payments.",{"type":116,"content":464},[465],{"type":71,"content":466},[467,471,473,480],{"text":468,"type":75,"marks":469},"Medical bill advocates:",[470],{"type":111},{"text":472,"type":75}," ",{"text":474,"type":75,"marks":475},"Medical bill advocates",[476],{"type":80,"attrs":477},{"href":478,"uuid":83,"anchor":83,"custom":479,"target":85,"linktype":86},"https://www.patientadvocate.org/",{},{"text":481,"type":75}," negotiate down bills after an expensive procedure or hospital stay. They can also identify and dispute costly errors.",{"type":116,"content":483},[484],{"type":71,"content":485},[486,490],{"text":487,"type":75,"marks":488},"Medical credit card:",[489],{"type":111},{"text":491,"type":75}," Some doctor’s offices offer medical credit cards that have interest-free promotional periods. If you’re confident you can pay off the expense within that promotional period, these may be worth considering.",{"type":103,"attrs":493,"content":494},{"level":256},[495],{"text":496,"type":75,"marks":497},"There is a loan type dedicated to your expense",[498],{"type":111},{"type":71,"content":500},[501,503,510],{"text":502,"type":75},"Student loans, mortgages, home equity lines of credit (HELOC), and auto loans all offer better repayment terms than personal loans if you’re using them for their intended purposes. For example, if you’re hoping to pay for a home remodel, a HELOC might be the way to go (though this is a type of secured loan and therefore comes with some risk). If you’re hoping to refinance your student loans, you should first consider the many ",{"text":504,"type":75,"marks":505},"purpose-made loans",[506],{"type":80,"attrs":507},{"href":508,"uuid":83,"anchor":83,"custom":509,"target":85,"linktype":86},"https://navirefi.com",{},{"text":511,"type":75}," to reduce your student loan payments, and consider a personal loan a last resort.",{"type":103,"attrs":513,"content":514},{"level":256},[515],{"text":516,"type":75,"marks":517},"You intend to continue adding to your debt",[518],{"type":111},{"type":71,"content":520},[521],{"text":522,"type":75},"Some borrowers use a personal loan to pay off their credit card debt — only to continue spending recklessly afterward. It’s important to understand you will not be debt-free after using a personal loan to refinance; your debt will only be more manageable. Any time you take out a loan, make sure you have a clear, detailed plan for paying it off. If you don’t, it may be best to avoid taking out a personal loan at this time.",{"type":103,"attrs":524,"content":525},{"level":105},[526],{"text":527,"type":75,"marks":528},"Personal loan FAQs",[529],{"type":111},{"type":71,"content":531},[532],{"text":533,"type":75},"Ask yourself these questions to ensure you’re prepared for your new personal loan. ",{"type":103,"attrs":535,"content":536},{"level":256},[537],{"text":538,"type":75,"marks":539},"How will a personal loan affect my credit score?",[540],{"type":111},{"type":71,"content":542},[543,545,552,554,561],{"text":544,"type":75},"When you apply for a loan, the lender will pull your credit report as part of the application process. This is known as a “",{"text":546,"type":75,"marks":547},"hard inquiry",[548],{"type":80,"attrs":549},{"href":550,"uuid":83,"anchor":83,"custom":551,"target":85,"linktype":86},"https://www.creditkarma.com/advice/i/hard-credit-inquiries-and-soft-credit-inquiries",{},{"text":553,"type":75},",” and most credit bureaus will see it as a potential sign that you’re low on funds. As such, hard credit inquiries will usually lower your ",{"text":555,"type":75,"marks":556},"credit score",[557],{"type":80,"attrs":558},{"href":559,"uuid":83,"anchor":83,"custom":560,"target":85,"linktype":86},"https://www.creditkarma.com/credit-scores",{},{"text":562,"type":75}," by a few points.",{"type":71,"content":564},[565,567,574],{"text":566,"type":75},"Hard inquiries stay on your credit reports for about two years. Consider ",{"text":568,"type":75,"marks":569},"checking your rates",[570],{"type":80,"attrs":571},{"href":572,"uuid":83,"anchor":83,"custom":573,"target":85,"linktype":86},"https://fiona.com/partner/navientloans/loans",{},{"text":575,"type":75}," with lenders that conduct “soft inquiries,” which won’t impact your scores.",{"type":71,"content":577},[578],{"text":579,"type":75},"The good news is that if you decide to take out a personal loan and then make a series of on-time payments, this demonstrates responsible financial behavior. Over time, it can actually boost your credit score and improve your credit. ",{"type":103,"attrs":581,"content":582},{"level":256},[583],{"text":584,"type":75,"marks":585},"What credit score do I need to get a personal loan?",[586],{"type":111},{"type":71,"content":588},[589,591,598],{"text":590,"type":75},"Credit score requirements for personal loans vary by lender. Many give preference to borrowers with good or excellent credit scores (690 and above). With a ",{"text":592,"type":75,"marks":593},"FICO score above 760",[594],{"type":80,"attrs":595},{"href":596,"uuid":83,"anchor":83,"custom":597,"target":85,"linktype":86},"https://www.nerdwallet.com/article/loans/personal-loans/credit-score-need-get-personal-loan",{},{"text":599,"type":75},", you may qualify for annual percentage rates (APR) as low as 3.99%.",{"type":71,"content":601},[602,604,611,613,620],{"text":603,"type":75},"That said, you can get decent rates with a much lower score. The minimum credit score to qualify for a personal loan is ",{"text":605,"type":75,"marks":606},"usually 560 to 660",[607],{"type":80,"attrs":608},{"href":609,"uuid":83,"anchor":83,"custom":610,"target":85,"linktype":86},"https://www.consumer.equifax.ca/personal/education/credit-score/credit-score-personal-loan/",{},{"text":612,"type":75},". If your score is below this range, you may be able to apply with a cosigner to increase your likelihood of approval. You can use the ",{"text":614,"type":75,"marks":615},"Navient Marketplace",[616],{"type":80,"attrs":617},{"href":618,"uuid":83,"anchor":83,"custom":619,"target":85,"linktype":86},"https://marketplace.navient.com",{},{"text":621,"type":75}," to find options for virtually any credit score.",{"type":103,"attrs":623,"content":624},{"level":256},[625],{"text":626,"type":75,"marks":627},"Do personal loans have high fees?",[628],{"type":111},{"type":71,"content":630},[631],{"text":632,"type":75},"Some lenders charge a fee to cover the cost of processing the loan. Origination fees typically range from 1 to 6% of the loan amount. Lenders also often charge fees for late payments and bounced checks or account withdrawals. You may also face prepayment penalties if you repay your loan before the loan term is up. Most lenders will have all their fees clearly listed either online or in the contract so you can review them before you sign.",{"type":103,"attrs":634,"content":635},{"level":256},[636],{"text":637,"type":75,"marks":638},"How soon will I get funds from a personal loan?",[639],{"type":111},{"type":71,"content":641},[642],{"text":643,"type":75},"Personal loan disbursal times vary by lender. Some online lenders provide funds as quickly as the next day. 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May offer higher credit limits than a credit card.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"2774e5f8-39b2-4659-9b3f-45a4c8a18d0e\", \"id\": \"651798214\"}-->",{"_uid":734,"value":735,"component":727,"_editable":736},"19a7092b-cea1-431b-8642-6277d1ebef19","Useful if you need a higher credit limit or a low-cost cash advance.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"19a7092b-cea1-431b-8642-6277d1ebef19\", \"id\": \"651798214\"}-->","_table_row","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"6221711a-3651-4d15-b400-f4c25a595e75\", \"id\": \"651798214\"}-->",{"_uid":740,"body":741,"component":737,"_editable":754},"0e60b468-8a98-487f-941a-e07cb9e76e26",[742,746,750],{"_uid":743,"value":744,"component":727,"_editable":745},"289bb1d6-43e2-4a95-ac7a-0760e241cf66","Credit card","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"289bb1d6-43e2-4a95-ac7a-0760e241cf66\", \"id\": \"651798214\"}-->",{"_uid":747,"value":748,"component":727,"_editable":749},"d44ff956-3579-41d3-ab90-535bb5dee3e5","A line of credit that lets you borrow up to a certain limit on a rolling basis. Those with strong credit may receive low promotional rates, cash-back rewards, and other perks.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"d44ff956-3579-41d3-ab90-535bb5dee3e5\", \"id\": \"651798214\"}-->",{"_uid":751,"value":752,"component":727,"_editable":753},"13448381-32f8-41dd-8aa8-88a67ab11480","A good option if you prefer to borrow as needed and can afford to pay off your balance every month.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"13448381-32f8-41dd-8aa8-88a67ab11480\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"0e60b468-8a98-487f-941a-e07cb9e76e26\", \"id\": \"651798214\"}-->",{"_uid":756,"body":757,"component":737,"_editable":770},"d6794f6b-bbd4-41c4-9e18-f0444300204a",[758,762,766],{"_uid":759,"value":760,"component":727,"_editable":761},"79d66a18-409b-4c6c-a978-3816233c96b6","Home equity loan or home equity line of credit (HELOC)","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"79d66a18-409b-4c6c-a978-3816233c96b6\", \"id\": \"651798214\"}-->",{"_uid":763,"value":764,"component":727,"_editable":765},"30e6580c-7ff6-4900-bd49-01b11a54d71c","A loan or line of credit that lets you borrow against the value of your home.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"30e6580c-7ff6-4900-bd49-01b11a54d71c\", \"id\": \"651798214\"}-->",{"_uid":767,"value":768,"component":727,"_editable":769},"c24d685f-b701-41b3-85f6-87dee00a5b14","Ideal if you have a lot of equity in your home and know you can avoid the risk of foreclosure. Best for funding projects that will increase home equity.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"c24d685f-b701-41b3-85f6-87dee00a5b14\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"d6794f6b-bbd4-41c4-9e18-f0444300204a\", \"id\": \"651798214\"}-->",{"_uid":772,"body":773,"component":737,"_editable":786},"4cdae78e-3ace-449f-ae6f-358ee50c89cc",[774,778,782],{"_uid":775,"value":776,"component":727,"_editable":777},"651bd6e2-799c-442e-ba97-ade584880305","Payday loan","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"651bd6e2-799c-442e-ba97-ade584880305\", \"id\": \"651798214\"}-->",{"_uid":779,"value":780,"component":727,"_editable":781},"5724f02a-87f7-41b1-a143-47a75c525a85","A short-term, high cost loan, generally for $500 or less, that’s typically due on your next payday.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"5724f02a-87f7-41b1-a143-47a75c525a85\", \"id\": \"651798214\"}-->",{"_uid":783,"value":784,"component":727,"_editable":785},"f496d619-55ea-473f-a1a2-901af9469209","Only recommended if you know you can repay it right away, don’t have a bank account, or can’t provide collateral to take out another type of loan.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"f496d619-55ea-473f-a1a2-901af9469209\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"4cdae78e-3ace-449f-ae6f-358ee50c89cc\", \"id\": \"651798214\"}-->",[788,792,796],{"_uid":789,"value":18,"component":790,"_editable":791},"fcb52dab-6aac-4238-933a-6fefcffbc000","_table_head","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"fcb52dab-6aac-4238-933a-6fefcffbc000\", \"id\": \"651798214\"}-->",{"_uid":793,"value":794,"component":790,"_editable":795},"a5377f9f-2c44-4766-87e6-b3c5806aafad","What it is","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"a5377f9f-2c44-4766-87e6-b3c5806aafad\", \"id\": \"651798214\"}-->",{"_uid":797,"value":798,"component":790,"_editable":799},"c87039d8-73de-4c09-9e8a-701c39cf5d9b","What it's best for","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"c87039d8-73de-4c09-9e8a-701c39cf5d9b\", \"id\": \"651798214\"}-->","table","TableComponent","100%","\u003C!--#storyblok#{\"name\": \"TableComponent\", \"space\": \"157494\", \"uid\": \"1859c494-2ecf-42bf-834b-ef47a0ef7db4\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"a230801e-c237-44f1-b604-7c6d3d2c57c3\", \"id\": \"651798214\"}-->",{"lg":59,"md":59,"sm":60,"_uid":806,"cols":60,"bloks":807,"alignSelf":662,"component":663,"_editable":848},"f020de37-15f6-4fa7-b569-84670b8d6dfb",[808],{"_uid":809,"color":65,"classes":66,"content":18,"richText":810,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":844,"_editable":847},"cd77267d-fb35-439c-ac18-351a5ec17a25",{"type":68,"content":811},[812,819,823,836],{"type":103,"attrs":813,"content":814},{"level":105},[815],{"text":816,"type":75,"marks":817},"Find the best personal loans with Navient Marketplace",[818],{"type":111},{"type":71,"content":820},[821],{"text":822,"type":75},"In many cases, personal loans can help you better manage your debt, consolidate your credit card balances, and pay for life’s unexpected events. However, it’s critical to understand all the pros and cons any time you consider borrowing money. You’ll also need to do your due diligence when it comes to rate shopping.",{"type":71,"content":824},[825,827,834],{"text":826,"type":75},"With Navient Marketplace, you can see all the best rates in one easy place. Instead of filling out painstaking applications for each separate loan, we’ll automatically match you with loan offers in real time. All you need to do is fill out a simple, secure form, and you’ll have all the best offers in front of you in seconds. ",{"text":828,"type":75,"marks":829},"Create a profile today",[830],{"type":80,"attrs":831},{"href":832,"uuid":83,"anchor":83,"custom":833,"target":85,"linktype":86},"https://marketplace.navient.com/",{},{"text":835,"type":75}," to find the best loans for your needs.",{"type":71,"content":837},[838],{"text":839,"type":75,"marks":840},"Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.",[841],{"type":124,"attrs":842},{"class":843},"footer-text",{"type":68,"content":845},[846],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"cd77267d-fb35-439c-ac18-351a5ec17a25\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"f020de37-15f6-4fa7-b569-84670b8d6dfb\", \"id\": \"651798214\"}-->","Row","\u003C!--#storyblok#{\"name\": \"Row\", \"space\": \"157494\", \"uid\": \"0737a92f-e416-438d-b8db-1c0e86499923\", \"id\": \"651798214\"}-->","blog-post-container mt-16","Container",[],"\u003C!--#storyblok#{\"name\": \"Container\", \"space\": \"157494\", \"uid\": \"222843d6-4c0d-4ac3-aa5f-7f579c49c5fe\", \"id\": \"651798214\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":858,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":878,"containerClasses":18,"useBackgroundImage":44,"_editable":879},"33d3a06b-b58c-487e-92e7-fc588a9c1c78","mb-7",[859],{"_uid":860,"component":861,"backToTopBtn":862,"_editable":873},"c390fb05-75db-44ae-af73-2bbd7c809b57","BackToTop",[863],{"url":864,"_uid":866,"icon":867,"text":868,"color":32,"event":18,"sizing":869,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":872},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},"story","d87937d9-6d46-4da0-813d-437561563b18",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"back to top",[],"letter-spacing-normal text-transform-none text-size-sub-1","Button","\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798214\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798214\"}-->","1240px","Grid","pl-0","ml-7",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798214\"}-->","Personal Loans","BlogPost","https://www.marketplace.navient.com/blog/should-i-get-a-personal-loan/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798214\"}-->","should-i-get-a-personal-loan","navient_marketplace/blog/should-i-get-a-personal-loan",100,[],651751493,"3fcaf0e7-b708-4ba7-ba79-d1f36564101a","2023-02-28T18:40:14.783Z","default",[],{"name":894,"created_at":895,"published_at":896,"updated_at":897,"id":898,"uuid":899,"content":900,"slug":1645,"full_slug":1646,"sort_by_date":83,"position":1647,"tag_list":1648,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":1649,"first_published_at":1650,"release_id":83,"lang":891,"path":1651,"alternates":1652,"default_full_slug":83,"translated_slugs":83},"Is Term Life Insurance Worth It? ","2025-04-07T18:31:47.032Z","2025-12-26T13:45:17.144Z","2025-12-26T13:45:17.175Z",651798215,"fe49dba6-d386-4467-93e8-783e6aaf8970",{"seo":901,"_uid":20,"body":904,"author":48,"category":1642,"featured":44,"component":881,"canonicalTag":1643,"_editable":1644},{"_uid":15,"title":902,"plugin":17,"og_image":18,"og_title":18,"description":903,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Is Term Life Insurance Worth It? - Navient Marketplace","Is term life insurance worth it? Here's how to tell, plus alternatives if term life isn't right for you.",[905,914,1630],{"id":23,"_uid":24,"image":906,"intro":907,"author":27,"classes":908,"category":18,"featured":44,"blogTitle":894,"component":46,"imageLink":912,"blendImage":44,"authorRoute":48,"publishedDate":49,"backgroundColor":50,"_editable":913},"//a.storyblok.com/f/110029/800x600/e7cef91e10/is-term-life-insurance-worth-it.png","Some readers might wonder: is term life insurance worth it? Here’s how to decide if it’s the right fit for you.",[909],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":910,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":911},"600","\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798215\"}-->","/images/is-term-life-insurance-worth-it.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798215\"}-->",{"_uid":53,"bloks":915,"classes":851,"component":852,"mobileClasses":18,"containerContent":1628,"_editable":1629},[916],{"_uid":56,"bloks":917,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":1627},[918,1294,1323,1401],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":919,"alignSelf":662,"component":663,"_editable":1293},[920],{"_uid":64,"color":65,"classes":66,"content":18,"richText":921,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":1289,"_editable":1292},{"type":68,"content":922},[923,927,931,938,950,954,1033,1040,1044,1057,1061,1105,1109,1152,1159,1170,1244,1251,1255,1278,1285],{"type":71,"content":924},[925],{"text":926,"type":75},"Life is unpredictable. While no one likes to dwell on death, it’s important to have the right life insurance policy to protect your loved ones should the unthinkable occur.",{"type":71,"content":928},[929],{"text":930,"type":75},"The good news is that you can give yourself and your beneficiaries peace of mind at a relatively low cost. While standard whole life insurance often comes with high premiums, term life insurance can present an affordable alternative. Since this kind of insurance only covers you for a certain number of years before you have to renew, some readers might wonder: is term life insurance worth it? Here’s how to decide if it’s the right fit for you.",{"type":103,"attrs":932,"content":933},{"level":105},[934],{"text":935,"type":75,"marks":936},"What is term life insurance?",[937],{"type":111},{"type":71,"content":939},[940,942,949],{"text":941,"type":75},"Term life insurance is a type of life insurance that provides coverage for a fixed period of time. The policyholder pays premiums to the insurance company during this period, and if the insured dies within that time frame, their beneficiaries receive a lump sum payment. Term life insurance policies are usually available for 5- to 30-year terms. While the cost of the premiums will depend on the amount of coverage, term life insurance is generally less expensive than ",{"text":943,"type":75,"marks":944},"whole life insurance",[945],{"type":80,"attrs":946},{"href":947,"uuid":83,"anchor":83,"custom":948,"target":85,"linktype":86},"https://www.usnews.com/insurance/life-insurance/whole-life-insurance","[object Object]",{"text":317,"type":75},{"type":71,"content":951},[952],{"text":953,"type":75},"There are three main term life insurance options to choose from.",{"type":213,"attrs":955,"content":957},{"order":956},{"order":215},[958,986,1014],{"type":116,"content":959},[960],{"type":71,"content":961},[962,966,968,975,977,984],{"text":963,"type":75,"marks":964},"Decreasing Term Plan:",[965],{"type":111},{"text":967,"type":75}," Under this plan, your “",{"text":969,"type":75,"marks":970},"death benefit",[971],{"type":80,"attrs":972},{"href":973,"uuid":83,"anchor":83,"custom":974,"target":85,"linktype":86},"https://www.forbes.com/advisor/life-insurance/death-benefits/",{},{"text":976,"type":75},"” — or the disbursement your loved ones will receive when you pass away — decreases monthly or annually at a predetermined rate throughout the policy term. While the death benefit will diminish over time, your premium won’t change. For that reason, ",{"text":978,"type":75,"marks":979},"decreasing term plans",[980],{"type":80,"attrs":981},{"href":982,"uuid":83,"anchor":83,"custom":983,"target":85,"linktype":86},"https://www.bankrate.com/insurance/life-insurance/decreasing-term-insurance/",{},{"text":985,"type":75}," are potentially less affordable than other options. However, they can make sense if your beneficiaries are currently making loan or mortgage payments that you know will decrease over the course of the policy term.",{"type":116,"content":987},[988],{"type":71,"content":989},[990,994,996,1003,1005,1012],{"text":991,"type":75,"marks":992},"Annual Renewable Plan:",[993],{"type":111},{"text":995,"type":75}," This option allows you to renew your policy on a year-to-year basis without having to reapply or ",{"text":997,"type":75,"marks":998},"take a medical exam",[999],{"type":80,"attrs":1000},{"href":1001,"uuid":83,"anchor":83,"custom":1002,"target":85,"linktype":86},"https://www.forbes.com/advisor/life-insurance/medical-exam/",{},{"text":1004,"type":75},". However, your premium will increase each year while the amount of coverage remains the same. These plans can only be renewed up to a certain age, which varies by carrier. (Most insurance companies provide coverage for 18- to 65-year-olds. However, many will ",{"text":1006,"type":75,"marks":1007},"cover individuals up to age 85",[1008],{"type":80,"attrs":1009},{"href":1010,"uuid":83,"anchor":83,"custom":1011,"target":85,"linktype":86},"https://www.retireguide.com/life-insurance/buy/over-65/",{},{"text":1013,"type":75},".) An annual renewable plan may be best if you have beneficiaries with short-term debts that you know will be paid off within a few years.",{"type":116,"content":1015},[1016],{"type":71,"content":1017},[1018,1022,1024,1031],{"text":1019,"type":75,"marks":1020},"Level Term Plan:",[1021],{"type":111},{"text":1023,"type":75}," With a ",{"text":1025,"type":75,"marks":1026},"level term plan",[1027],{"type":80,"attrs":1028},{"href":1029,"uuid":83,"anchor":83,"custom":1030,"target":85,"linktype":86},"https://www.iii.org/article/what-are-different-types-term-life-insurance-policies",{},{"text":1032,"type":75},", both your premium and death benefit stay the same for the duration of your policy. Though this option may start out with higher premiums than you’d see on an annual renewable or decreasing term plan, it provides more consistent financial protection. Level term insurance is a good option for someone looking to cover their family's immediate expenses as well as any future expenses.",{"type":103,"attrs":1034,"content":1035},{"level":105},[1036],{"text":1037,"type":75,"marks":1038},"Term life insurance vs. whole life insurance",[1039],{"type":111},{"type":71,"content":1041},[1042],{"text":1043,"type":75},"Not all life insurance policies are created equal. Whole life insurance covers your family for your entire life. Term life insurance, on the other hand, offers more limited coverage, and you have to decide how long you anticipate needing the coverage for. The death benefit will be paid to your beneficiaries only if you die before the term is up.",{"type":71,"content":1045},[1046,1048,1055],{"text":1047,"type":75},"The other key difference between term and whole life insurance is the price. Whole life insurance is substantially more expensive than term insurance. In some cases, the annual premiums can be ",{"text":1049,"type":75,"marks":1050},"five to ten times",[1051],{"type":80,"attrs":1052},{"href":1053,"uuid":83,"anchor":83,"custom":1054,"target":85,"linktype":86},"https://www.forbes.com/advisor/life-insurance/comparing-term-life-vs-whole-life-insurance/",{},{"text":1056,"type":75}," more expensive. This makes whole life insurance cost-prohibitive for many Americans.",{"type":71,"content":1058},[1059],{"text":1060,"type":75},"Term life insurance might be a good option if you:",{"type":113,"content":1062},[1063,1072,1081,1090],{"type":116,"content":1064},[1065],{"type":71,"content":1066},[1067],{"text":1068,"type":75,"marks":1069},"Are looking for an affordable way to protect your family financially",[1070],{"type":124,"attrs":1071},{"class":126},{"type":116,"content":1073},[1074],{"type":71,"content":1075},[1076],{"text":1077,"type":75,"marks":1078},"Need coverage for your dependents for a finite period of time",[1079],{"type":124,"attrs":1080},{"class":126},{"type":116,"content":1082},[1083],{"type":71,"content":1084},[1085],{"text":1086,"type":75,"marks":1087},"Are seeking coverage to help your partner pay a mortgage and other monthly bills that have an expiration date",[1088],{"type":124,"attrs":1089},{"class":126},{"type":116,"content":1091},[1092],{"type":71,"content":1093},[1094,1096,1103],{"text":1095,"type":75},"Think you might want permanent life insurance in the future but can’t afford it right now. (Many term life policies can be ",{"text":1097,"type":75,"marks":1098},"converted to whole life coverage",[1099],{"type":80,"attrs":1100},{"href":1101,"uuid":83,"anchor":83,"custom":1102,"target":85,"linktype":86},"https://www.forbes.com/advisor/life-insurance/convert-term-life-to-permanent-life-insurance/",{},{"text":1104,"type":75},", though the deadline for conversion varies by policy.)",{"type":71,"content":1106},[1107],{"text":1108,"type":75},"Whole life insurance might be a good option if you:",{"type":113,"content":1110},[1111,1120,1129,1138],{"type":116,"content":1112},[1113],{"type":71,"content":1114},[1115],{"text":1116,"type":75,"marks":1117},"Want lifetime coverage starting now",[1118],{"type":124,"attrs":1119},{"class":126},{"type":116,"content":1121},[1122],{"type":71,"content":1123},[1124],{"text":1125,"type":75,"marks":1126},"Can afford a higher premium",[1127],{"type":124,"attrs":1128},{"class":126},{"type":116,"content":1130},[1131],{"type":71,"content":1132},[1133],{"text":1134,"type":75,"marks":1135},"Have a lifelong dependent, like a child with disabilities",[1136],{"type":124,"attrs":1137},{"class":126},{"type":116,"content":1139},[1140],{"type":71,"content":1141},[1142,1144,1150],{"text":1143,"type":75},"Want a life insurance with a ",{"text":1145,"type":75,"marks":1146},"cash value component",[1147],{"type":80,"attrs":1148},{"href":1149,"uuid":83,"anchor":83,"custom":948,"target":85,"linktype":86},"https://www.forbes.com/advisor/life-insurance/cash-value-life-insurance/",{"text":1151,"type":75}," (a savings account that you can withdraw from or borrow against while you are still alive)",{"type":103,"attrs":1153,"content":1154},{"level":105},[1155],{"text":1156,"type":75,"marks":1157},"The benefits of term life insurance",[1158],{"type":111},{"type":71,"content":1160},[1161,1168],{"text":1162,"type":75,"marks":1163},"Term life insurance",[1164],{"type":80,"attrs":1165},{"href":1166,"uuid":83,"anchor":83,"custom":1167,"target":85,"linktype":86},"https://www.moneygeek.com/insurance/life/term-life-insurance/",{},{"text":1169,"type":75}," is an excellent option for many families and individuals. Here are some of the benefits.",{"type":113,"content":1171},[1172,1184,1196,1208,1220,1232],{"type":116,"content":1173},[1174],{"type":71,"content":1175},[1176,1178,1182],{"text":1177,"type":75},"Term life insurance is ",{"text":1179,"type":75,"marks":1180},"more affordable ",[1181],{"type":111},{"text":1183,"type":75},"than other types of life insurance plans — often one-fifth the cost of whole life insurance.",{"type":116,"content":1185},[1186],{"type":71,"content":1187},[1188,1190,1194],{"text":1189,"type":75},"Term life insurance is straightforward and",{"text":1191,"type":75,"marks":1192}," easy to understand",[1193],{"type":111},{"text":1195,"type":75},": it simply provides a death benefit if you die within the paid policy term.",{"type":116,"content":1197},[1198],{"type":71,"content":1199},[1200,1202,1206],{"text":1201,"type":75},"It’s easy to add ",{"text":1203,"type":75,"marks":1204},"more coverage",[1205],{"type":111},{"text":1207,"type":75},". Most carriers let you easily up the coverage for your term by up to 10 times without incurring a huge premium increase.",{"type":116,"content":1209},[1210],{"type":71,"content":1211},[1212,1214,1218],{"text":1213,"type":75},"If you die during your policy term, your beneficiary or beneficiaries will receive a lump sum from the life insurance company. Just like with whole life insurance, the death benefit disbursement will be ",{"text":1215,"type":75,"marks":1216},"tax-free. ",[1217],{"type":111},{"text":1219,"type":75},"That means the recipient(s) can keep the full amount to use as needed.",{"type":116,"content":1221},[1222],{"type":71,"content":1223},[1224,1226,1230],{"text":1225,"type":75},"If you decide to cancel your term policy while it’s active, you can do so ",{"text":1227,"type":75,"marks":1228},"without incurring fees or penalties",[1229],{"type":111},{"text":1231,"type":75},". That can make it feel like less of a financial commitment than whole life insurance.",{"type":116,"content":1233},[1234],{"type":71,"content":1235},[1236,1238,1242],{"text":1237,"type":75},"Term life insurance policies are ",{"text":1239,"type":75,"marks":1240},"flexible",[1241],{"type":111},{"text":1243,"type":75},", offering many policy and payment options. You can choose to pay your premiums monthly, quarterly, biannually, or annually. You can also choose how long you need coverage; most life insurance companies offer terms anywhere from five to 30 years in length.",{"type":103,"attrs":1245,"content":1246},{"level":105},[1247],{"text":1248,"type":75,"marks":1249},"The disadvantages of term life insurance",[1250],{"type":111},{"type":71,"content":1252},[1253],{"text":1254,"type":75},"Though term life insurance is more affordable than whole life insurance — and offers more flexible coverage — it does come with some downsides.",{"type":113,"content":1256},[1257,1263],{"type":116,"content":1258},[1259],{"type":71,"content":1260},[1261],{"text":1262,"type":75},"Term life insurance has no cash value component. Unlike whole life policies (which come with a tax-deferred savings account), there is no way to invest any part of your term insurance premiums. All funds are put toward your death benefit; you can’t manage or grow them over time. This means that if you don't end up using your term insurance’s death benefit, then all those funds go straight down the drain.",{"type":116,"content":1264},[1265],{"type":71,"content":1266},[1267,1269,1276],{"text":1268,"type":75},"Term life insurance does not ",{"text":1270,"type":75,"marks":1271},"cover pre-existing conditions",[1272],{"type":80,"attrs":1273},{"href":1274,"uuid":83,"anchor":83,"custom":1275,"target":85,"linktype":86},"https://www.bankrate.com/insurance/life-insurance/pre-existing-conditions/",{},{"text":1277,"type":75}," or long-term care costs. That includes conditions like diabetes or cancer. So, if these were already present before you purchased coverage, then they'll never be covered by that plan — and neither will any future occurrences thereof. The same is true of long-term care coverage: if a beneficiary needs help taking care of themselves due to old age but hasn't purchased supplemental long-term care insurance before the need arises, then they're out of luck.",{"type":103,"attrs":1279,"content":1280},{"level":105},[1281],{"text":1282,"type":75,"marks":1283},"Who should consider term life insurance?",[1284],{"type":111},{"type":71,"content":1286},[1287],{"text":1288,"type":75},"Anyone looking to support their family's financial wellbeing should consider term life insurance. It is an affordable way to protect your loved ones in the event of a tragedy.",{"type":68,"content":1290},[1291],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": \"651798215\"}-->",{"lg":666,"md":18,"sm":666,"_uid":1295,"cols":666,"bloks":1296,"alignSelf":662,"component":663,"_editable":1322},"d7d3de2b-23e3-4c1e-b2ee-b081a5e85602",[1297],{"id":670,"_uid":1298,"fixed":657,"title":1299,"classes":678,"maxWidth":18,"subtitle":1305,"component":682,"titleClasses":683,"mobileClasses":684,"backgroundColor":685,"subtitleClasses":686,"checkYourRateBtn":1308,"_editable":1321},"c36bfdfa-35a4-462e-8162-d99ba3bf5870",{"type":68,"content":1300},[1301],{"type":71,"content":1302},[1303],{"text":1304,"type":75},"Search and compare to get a low rate and save.",{"type":68,"content":1306},[1307],{"type":71},[1309],{"url":1310,"_uid":1312,"icon":1313,"text":1314,"color":696,"sizing":1315,"classes":707,"rounded":44,"outlined":44,"component":708,"textColor":685,"hoverBgColor":685,"mobileClasses":709,"hoverTextColor":696,"navigationType":1319,"_editable":1320},{"id":18,"url":1311,"linktype":86,"fieldtype":691,"cached_url":1311},"https://www.leaplife.com/partner/navientlifeinsurance/life-insurance/","f63d0282-3e1b-43f5-b8a8-7e170de6e499",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":83,"copyright":83,"fieldtype":694},"Check It Out",[1316],{"_uid":1317,"width":700,"height":701,"fontSize":702,"component":703,"mobileWidth":704,"mobileHeight":701,"fontSizeMobile":705,"_editable":1318},"79c54504-09e8-4459-98e4-da98f16d575f","\u003C!--#storyblok#{\"name\": \"buttonSizing\", \"space\": \"157494\", \"uid\": \"79c54504-09e8-4459-98e4-da98f16d575f\", \"id\": \"651798215\"}-->",[],"\u003C!--#storyblok#{\"name\": \"CheckYourRateBtn\", \"space\": \"157494\", \"uid\": \"f63d0282-3e1b-43f5-b8a8-7e170de6e499\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"BlogCTA\", \"space\": \"157494\", \"uid\": \"c36bfdfa-35a4-462e-8162-d99ba3bf5870\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"d7d3de2b-23e3-4c1e-b2ee-b081a5e85602\", \"id\": \"651798215\"}-->",{"lg":59,"md":59,"sm":60,"_uid":1324,"cols":60,"bloks":1325,"alignSelf":662,"component":663,"_editable":1400},"69f69cbc-1524-44b1-ab35-8db70a5c9bab",[1326],{"_uid":1327,"table":1328,"component":801,"tableWidth":802,"rowCellAlign":662,"footerContent":18,"includeFooter":44,"headerCellAlign":662,"_editable":1399},"f74ae5fb-f90f-4e6e-a3c3-3138a3b86808",{"tbody":1329,"thead":1390,"fieldtype":800},[1330,1342,1354,1366,1378],{"_uid":1331,"body":1332,"component":737,"_editable":1341},"6d9768af-e4bb-4ce2-ab79-68744b68ecbe",[1333,1337],{"_uid":1334,"value":1335,"component":727,"_editable":1336},"71756d2a-9cc0-42f3-8649-e39fe53a0496","Young Couples","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"71756d2a-9cc0-42f3-8649-e39fe53a0496\", \"id\": \"651798215\"}-->",{"_uid":1338,"value":1339,"component":727,"_editable":1340},"6139eba4-8afd-4c65-a1b5-786cb0323fc5","Insurance may be the last thing on newlyweds’ minds, but this is actually the ideal time to buy term life coverage. The younger and healthier you are, the better your rates will be. A term life insurance payout can be used to replace lost income, pay down debts (including mortgage, car, and student loans), and cover future financial needs like childcare and education costs. ","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"6139eba4-8afd-4c65-a1b5-786cb0323fc5\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"6d9768af-e4bb-4ce2-ab79-68744b68ecbe\", \"id\": \"651798215\"}-->",{"_uid":1343,"body":1344,"component":737,"_editable":1353},"4b32a122-fff0-4a9b-a6d3-e3c1b3437485",[1345,1349],{"_uid":1346,"value":1347,"component":727,"_editable":1348},"e91ff31e-9560-40d4-8a4d-047eeff26247","Sole Financial Providers","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"e91ff31e-9560-40d4-8a4d-047eeff26247\", \"id\": \"651798215\"}-->",{"_uid":1350,"value":1351,"component":727,"_editable":1352},"681975cc-e3e6-41d5-94ec-f79f28b1d7d2","The loss of a single-income provider can be devastating to a family. Term life coverage can help the surviving family members replace the lost income, giving them time to stay home with children rather than going back to the workforce. Proceeds can also be used for everyday expenses, current and future childcare, and education costs.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"681975cc-e3e6-41d5-94ec-f79f28b1d7d2\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"4b32a122-fff0-4a9b-a6d3-e3c1b3437485\", \"id\": \"651798215\"}-->",{"_uid":1355,"body":1356,"component":737,"_editable":1365},"4be29729-d358-4dff-89a8-d28822f50a3c",[1357,1361],{"_uid":1358,"value":1359,"component":727,"_editable":1360},"508b5f0d-b4e2-48b2-9dff-f37d9299eb33","Individuals with Sizable Debt","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"508b5f0d-b4e2-48b2-9dff-f37d9299eb33\", \"id\": \"651798215\"}-->",{"_uid":1362,"value":1363,"component":727,"_editable":1364},"58c6e473-448e-458f-98d8-160c6f91dce6","If you have significant debt, your designated beneficiary can use your death benefit proceeds to pay major expenses like a mortgage or student loan. This can save them from having to take on that debt themselves. The death benefit can also be used to replace income or provide financial support to surviving family members. ","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"58c6e473-448e-458f-98d8-160c6f91dce6\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"4be29729-d358-4dff-89a8-d28822f50a3c\", \"id\": \"651798215\"}-->",{"_uid":1367,"body":1368,"component":737,"_editable":1377},"00d6ba6c-105c-4112-bc18-1a667cccceec",[1369,1373],{"_uid":1370,"value":1371,"component":727,"_editable":1372},"7c8f8a7f-6526-4c0c-a583-cdcd966bfe80","Stay-at-Home Parents","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"7c8f8a7f-6526-4c0c-a583-cdcd966bfe80\", \"id\": \"651798215\"}-->",{"_uid":1374,"value":1375,"component":727,"_editable":1376},"a6d15a29-2346-48a9-89ff-d50e3a1e9d4c","Term life insurance can provide stay-at-home parents with added peace of mind. The benefit can be used as an income supplement or to pay for childcare or other expenses, like housing, healthcare, or property taxes. ","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"a6d15a29-2346-48a9-89ff-d50e3a1e9d4c\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"00d6ba6c-105c-4112-bc18-1a667cccceec\", \"id\": \"651798215\"}-->",{"_uid":1379,"body":1380,"component":737,"_editable":1389},"19769c04-74f1-41a2-93ed-dfdfd47d7041",[1381,1385],{"_uid":1382,"value":1383,"component":727,"_editable":1384},"87acca3e-eb89-48bf-bcc3-668686f4d6c0","Business Owners","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"87acca3e-eb89-48bf-bcc3-668686f4d6c0\", \"id\": \"651798215\"}-->",{"_uid":1386,"value":1387,"component":727,"_editable":1388},"8d418620-c611-4452-9d02-218539972814","Term life coverage can also provide financial security for your business interests. Your death benefit can be used to pay off debts, expenses, and outstanding taxes in case you pass away. (The exact details are usually spelled out in a buy-sell agreement contract, which is especially important if ownership or shares in the company are to be transferred to another person in the event of the policyholder’s death.) Business owners with valuable employees can also take out term life insurance on those employees. This is often called “key man insurance.” In this scenario, the business owner pays for the policy, and the company is the beneficiary, receiving the death benefit if the key employee dies.","\u003C!--#storyblok#{\"name\": \"_table_col\", \"space\": \"157494\", \"uid\": \"8d418620-c611-4452-9d02-218539972814\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"_table_row\", \"space\": \"157494\", \"uid\": \"19769c04-74f1-41a2-93ed-dfdfd47d7041\", \"id\": \"651798215\"}-->",[1391,1395],{"_uid":1392,"value":1393,"component":790,"_editable":1394},"1b89559f-ec6f-473b-abf1-5a3777c25cdc","Customer Type","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"1b89559f-ec6f-473b-abf1-5a3777c25cdc\", \"id\": \"651798215\"}-->",{"_uid":1396,"value":1397,"component":790,"_editable":1398},"ef60bc02-bd99-45dc-b8a9-6e0ac3aafc3e","Benefits","\u003C!--#storyblok#{\"name\": \"_table_head\", \"space\": \"157494\", \"uid\": \"ef60bc02-bd99-45dc-b8a9-6e0ac3aafc3e\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"TableComponent\", \"space\": \"157494\", \"uid\": \"f74ae5fb-f90f-4e6e-a3c3-3138a3b86808\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"69f69cbc-1524-44b1-ab35-8db70a5c9bab\", \"id\": \"651798215\"}-->",{"lg":59,"md":59,"sm":60,"_uid":1402,"cols":60,"bloks":1403,"alignSelf":662,"component":663,"_editable":1626},"b3fee08a-02f4-44a7-9f6d-ca6f72cf1d3e",[1404],{"_uid":1405,"color":65,"classes":66,"content":18,"richText":1406,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":1622,"_editable":1625},"91a26953-a69d-496e-a5f9-64b8adbc7c50",{"type":68,"content":1407},[1408,1415,1419,1423,1430,1434,1441,1453,1460,1464,1471,1475,1480,1490,1525,1530,1539,1544,1562,1567,1571,1576,1589,1596,1600,1616],{"type":103,"attrs":1409,"content":1410},{"level":105},[1411],{"text":1412,"type":75,"marks":1413},"Who probably doesn't need term life insurance?",[1414],{"type":111},{"type":71,"content":1416},[1417],{"text":1418,"type":75},"If you don't have dependents, then the rate of return on your premiums may not be worth it. Consider the cost of paying the premium versus the benefits your beneficiary will receive if something happens to you. For example, if your family doesn't need your life insurance payout because they're financially secure, and your term life insurance premiums may cause you a significant burden, it may not be worth taking out an individual policy.",{"type":71,"content":1420},[1421],{"text":1422,"type":75},"Another group who may not want a term policy is young people without dependents who are at peak health. If this describes your situation, then there's probably no need for life insurance coverage at this time. Instead of paying premiums, it may be better to save your money and allocate it to a different investment vehicle for the time being.",{"type":103,"attrs":1424,"content":1425},{"level":105},[1426],{"text":1427,"type":75,"marks":1428},"How long will I need term life insurance for?",[1429],{"type":111},{"type":71,"content":1431},[1432],{"text":1433,"type":75},"The length of time you’ll need life insurance depends on your age, health, and family situation. If you're young and healthy, a 15- or 20-year term might be sufficient to cover a mortgage and other debts for your family members if something happened to you. If your savings are tied up in other assets — including individual retirement accounts (IRAs), 401(k)s, or stock investments that may continue to grow over time — you may want to consider a longer-term policy. This may be necessary to meet all of your dependents’ future financial needs while they have no income. The term length will also depend on how much income is needed each year, as well as what kind of lifestyle your dependents want to maintain without having to work more than is necessary.",{"type":103,"attrs":1435,"content":1436},{"level":105},[1437],{"text":1438,"type":75,"marks":1439},"How much does term life insurance cost?",[1440],{"type":111},{"type":71,"content":1442},[1443,1445,1452],{"text":1444,"type":75},"Life insurance premiums vary widely depending on a number of factors. These include your age, medical history, term length, and the total amount of coverage. Usually, the bigger your benefit, the higher the premium will be. Premiums can be paid monthly, quarterly, or annually depending on what type of policy you choose. Premiums may also vary according to your state’s particular regulations. The best way to get an idea of what term life insurance would cost for you is to request a ",{"text":1446,"type":75,"marks":1447},"free estimate online",[1448],{"type":80,"attrs":1449},{"href":1450,"uuid":83,"anchor":83,"custom":1451,"target":85,"linktype":86},"https://www.leaplife.com/partner/navientlifeinsurance/life-insurance",{},{"text":317,"type":75},{"type":103,"attrs":1454,"content":1455},{"level":105},[1456],{"text":1457,"type":75,"marks":1458},"How are claims paid out?",[1459],{"type":111},{"type":71,"content":1461},[1462],{"text":1463,"type":75},"In the event of a policyholder’s death, claims are paid out by the life insurance company. The company is regulated by state law, as well as by federal law and organizations such as the NAIC (National Association of Insurance Commissioners). In most cases, if you die before your policy expires, your beneficiaries receive a death benefit. This can be paid directly to them or used to cover your outstanding debts so that they don’t have to worry about them after your passing.",{"type":103,"attrs":1465,"content":1466},{"level":105},[1467],{"text":1468,"type":75,"marks":1469},"Alternatives to term life insurance",[1470],{"type":111},{"type":71,"content":1472},[1473],{"text":1474,"type":75},"Aside from term life insurance and whole life insurance, there are several other life insurance alternatives to choose from. (As a reminder, whole life insurance provides permanent coverage. It comes with a fixed death benefit and level premiums, and it provides a cash value account that can grow over time, tax-deferred.)",{"type":103,"attrs":1476,"content":1477},{"level":256},[1478],{"text":1479,"type":75},"Universal life insurance",{"type":71,"content":1481},[1482,1488],{"text":1479,"type":75,"marks":1483},[1484],{"type":80,"attrs":1485},{"href":1486,"uuid":83,"anchor":83,"custom":1487,"target":85,"linktype":86},"https://www.usnews.com/insurance/life-insurance/universal-life-insurance",{},{"text":1489,"type":75}," is a type of permanent life insurance (similar to traditional whole life insurance). With a universal life policy, the insured person is covered for the duration of their life as long as they pay premiums and fulfill other eligibility requirements. These plans are a great option if you want part of your policy to function as a savings account. Unlike whole life insurance, the premiums and death benefit are flexible rather than fixed. This type of coverage may also come with more fees than whole life insurance. There are a few additional features:",{"type":113,"content":1491},[1492,1501,1510,1519],{"type":116,"content":1493},[1494],{"type":71,"content":1495},[1496],{"text":1497,"type":75,"marks":1498},"You can withdraw money or borrow against the policy's cash value.",[1499],{"type":124,"attrs":1500},{"class":126},{"type":116,"content":1502},[1503],{"type":71,"content":1504},[1505],{"text":1506,"type":75,"marks":1507},"You can earn interest on the cash value component of your policy.",[1508],{"type":124,"attrs":1509},{"class":126},{"type":116,"content":1511},[1512],{"type":71,"content":1513},[1514],{"text":1515,"type":75,"marks":1516},"You have some flexibility with your premiums.",[1517],{"type":124,"attrs":1518},{"class":126},{"type":116,"content":1520},[1521],{"type":71,"content":1522},[1523],{"text":1524,"type":75},"You can adjust the death benefit — however, you may be required to take a medical exam to do so.",{"type":103,"attrs":1526,"content":1527},{"level":256},[1528],{"text":1529,"type":75},"Variable life insurance",{"type":71,"content":1531},[1532,1534,1536,1537],{"text":1533,"type":75},"Variable life insurance is a type of coverage that provides more flexibility than other types of life insurance and gives policyholders more say in their premium investments. Unlike whole life insurance, the policyholder must take an active role in deciding on investment options. If you don’t have solid investing knowledge already, this may feel like a big decision.",{"type":1535},"hard_break",{"type":1535},{"text":1538,"type":75},"When you purchase this type of policy, you’ll receive a prospectus laying out all your investment options. The most common way to invest your premiums is in mutual funds. You may also be able to invest in index funds, equities, bonds, or money market funds.",{"type":103,"attrs":1540,"content":1541},{"level":256},[1542],{"text":1543,"type":75},"Indexed universal life insurance",{"type":71,"content":1545},[1546,1552,1554,1555,1556,1558,1559,1560],{"text":1543,"type":75,"marks":1547},[1548],{"type":80,"attrs":1549},{"href":1550,"uuid":83,"anchor":83,"custom":1551,"target":85,"linktype":86},"https://www.investopedia.com/articles/personal-finance/012416/pros-and-cons-indexed-universal-life-insurance.asp",{},{"text":1553,"type":75}," allows you to adjust your premiums to maximize your cash policy’s cash value. This is a type of permanent coverage, which means it lasts your entire life and includes a cash value account that typically grows tax-deferred.",{"type":1535},{"type":1535},{"text":1557,"type":75},"Unlike other types of universal life insurance, an indexed policy ties your cash value account to a specific stock index, such as the S&P 500 or Dow Jones Industrial Average. ",{"type":1535},{"type":1535},{"text":1561,"type":75},"Unlike whole life insurance, an indexed policy offers flexible premiums and death benefits. That can provide more potential to grow your money. However, this type of policy can be risky, as the stock market has been known to fluctuate wildly.",{"type":103,"attrs":1563,"content":1564},{"level":256},[1565],{"text":1566,"type":75},"Guaranteed life insurance",{"type":71,"content":1568},[1569],{"text":1570,"type":75},"Guaranteed life insurance is a type of whole life insurance that allows policyholders to get coverage without taking a health exam. If someone with significant health concerns isn’t accepted by other insurance policies, guaranteed life insurance can be a good option. However, keep in mind that guaranteed life insurance policies require higher premium payments. Because these policies are riskier for life insurance companies, they charge higher rates and provide a smaller death benefit.",{"type":103,"attrs":1572,"content":1573},{"level":256},[1574],{"text":1575,"type":75},"Final expense life insurance",{"type":71,"content":1577},[1578,1580,1587],{"text":1579,"type":75},"While many life insurance options include funeral expenses, ",{"text":1581,"type":75,"marks":1582},"final expense insurance",[1583],{"type":80,"attrs":1584},{"href":1585,"uuid":83,"anchor":83,"custom":1586,"target":85,"linktype":86},"https://www.funeralbasics.org/myth-fact-truth-final-expense-plans/",{},{"text":1588,"type":75}," covers only funeral expenses and other end-of-life costs. Final expense coverage is usually guaranteed (i.e., there’s no required medical exam). However, the premiums are generally expensive despite the limited coverage.",{"type":103,"attrs":1590,"content":1591},{"level":105},[1592],{"text":1593,"type":75,"marks":1594},"Explore term life insurance with Navient Marketplace",[1595],{"type":111},{"type":71,"content":1597},[1598],{"text":1599,"type":75},"There are key differences between term and whole life insurance policies that boil down to cost, coverage, and cash value benefits. The best option for you will vary depending on your family circumstances and budget.",{"type":71,"content":1601},[1602,1604,1610,1612,1613,1614],{"text":1603,"type":75},"Once you’ve decided which type of life insurance is right for you, it’s time to start looking at your options. If you’re ready to start shopping for life insurance plans, head to the",{"text":1605,"type":75,"marks":1606}," Marketplace by Navient",[1607],{"type":80,"attrs":1608},{"href":832,"uuid":83,"anchor":83,"custom":1609,"target":85,"linktype":86},{},{"text":1611,"type":75}," to get free life insurance quotes. It’s a robust platform that can help you compare and contrast some of the best life insurance companies on the market. And, of course, consider speaking to your life insurance agent to get more guidance. ",{"type":1535},{"type":1535},{"text":1615,"type":75},"Life insurance doesn’t have to be complicated. With these resources at your fingertips, it’s easier than ever to protect your family from the unexpected. ",{"type":71,"content":1617},[1618],{"text":839,"type":75,"marks":1619},[1620],{"type":124,"attrs":1621},{"class":843},{"type":68,"content":1623},[1624],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"91a26953-a69d-496e-a5f9-64b8adbc7c50\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"b3fee08a-02f4-44a7-9f6d-ca6f72cf1d3e\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"Row\", \"space\": \"157494\", \"uid\": \"0737a92f-e416-438d-b8db-1c0e86499923\", \"id\": \"651798215\"}-->",[],"\u003C!--#storyblok#{\"name\": \"Container\", \"space\": \"157494\", \"uid\": \"222843d6-4c0d-4ac3-aa5f-7f579c49c5fe\", \"id\": \"651798215\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":1631,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":1640,"containerClasses":18,"useBackgroundImage":44,"_editable":1641},[1632],{"_uid":860,"component":861,"backToTopBtn":1633,"_editable":1639},[1634],{"url":1635,"_uid":866,"icon":1636,"text":868,"color":32,"event":18,"sizing":1637,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":1638},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798215\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798215\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798215\"}-->","Insurance","https://www.marketplace.navient.com/blog/is-term-life-insurance-worth-it/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798215\"}-->","is-term-life-insurance-worth-it","navient_marketplace/blog/is-term-life-insurance-worth-it",110,[],"f6ab1693-c6d3-4299-a9ff-c37950861775","2023-02-28T18:40:15.103Z","blog/is-term-life-insurance-worth-it/",[],{"name":1654,"created_at":1655,"published_at":1656,"updated_at":1657,"id":1658,"uuid":1659,"content":1660,"slug":2424,"full_slug":2425,"sort_by_date":83,"position":2426,"tag_list":2427,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":2428,"first_published_at":2429,"release_id":83,"lang":891,"path":83,"alternates":2430,"default_full_slug":83,"translated_slugs":83},"How Do Personal Loans Work?","2025-04-07T18:31:48.710Z","2026-04-01T17:18:30.737Z","2026-04-01T17:18:30.760Z",651798216,"339bfa65-e4a7-40cf-a529-7246385eda3b",{"seo":1661,"_uid":20,"body":1664,"author":1673,"category":880,"featured":44,"component":881,"canonicalTag":2422,"_editable":2423},{"_uid":15,"title":1662,"plugin":17,"og_image":18,"og_title":18,"description":1663,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"How Do Personal Loans Work? - Navient Marketplace","How do personal loans work? Learn the 6 steps, plus pros and cons, alternatives, and where to find personal loans.",[1665,1675,2410],{"id":23,"_uid":24,"image":1666,"intro":1667,"author":1668,"classes":1669,"category":18,"featured":44,"blogTitle":1654,"component":46,"imageLink":1672,"blendImage":44,"authorRoute":1673,"publishedDate":49,"backgroundColor":50,"_editable":1674},"//a.storyblok.com/f/110029/800x545/86ee1be857/how-do-personal-loans-work.png","Before you apply for a personal loan, it's important to understand how they work. This guide explains all you need to know.","Curt Kirby",[1670],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"titleMaxWidth":910,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":1671},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798216\"}-->","/images/how-do-personal-loans-work.png","curt-kirby","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798216\"}-->",{"_uid":53,"bloks":1676,"classes":851,"component":852,"mobileClasses":18,"containerContent":2408,"_editable":2409},[1677],{"_uid":56,"bloks":1678,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":2407},[1679,2381],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":1680,"alignSelf":662,"component":663,"_editable":2380},[1681],{"_uid":64,"color":65,"classes":66,"content":18,"richText":1682,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":2376,"_editable":2379},{"type":68,"content":1683},[1684,1688,1692,1699,1743,1750,1754,1758,1762,1768,1772,1784,1796,1800,1807,1811,1823,1835,1839,1846,1858,1865,1884,1891,1903,1910,1914,1921,1933,1937,1949,1956,1960,1967,1971,1978,1990,1997,2009,2016,2028,2035,2039,2046,2058,2062,2069,2081,2088,2092,2104,2111,2115,2119,2171,2175,2227,2234,2238,2278,2285,2289,2342,2348,2352,2363,2369],{"type":71,"content":1685},[1686],{"text":1687,"type":75},"Personal loans are one of the most popular types of loans, and there's a good reason why. They can be used for a variety of purposes, from consolidating debt to financing home-improvement projects. And because there are so many lenders out there, it's easy to find one that fits your needs.",{"type":71,"content":1689},[1690],{"text":1691,"type":75},"But before you apply for a personal loan, it's important to understand how they work. In this blog post, we'll break down everything you need to know about personal loans including how they're different from other types of loans, the factors that determine your interest rate, and how to choose the right lender. ",{"type":103,"attrs":1693,"content":1694},{"level":105},[1695],{"text":1696,"type":75,"marks":1697},"How does a personal loan work? Key takeaways:",[1698],{"type":111},{"type":113,"content":1700},[1701,1710,1719,1728,1737],{"type":116,"content":1702},[1703],{"type":71,"content":1704},[1705],{"text":1706,"type":75,"marks":1707},"A personal loan is a lump sum of cash that can be used to finance almost any large expense.",[1708],{"type":124,"attrs":1709},{"class":126},{"type":116,"content":1711},[1712],{"type":71,"content":1713},[1714],{"text":1715,"type":75,"marks":1716},"Lower interest rates are usually offered to borrowers with low debt and high credit scores.",[1717],{"type":124,"attrs":1718},{"class":126},{"type":116,"content":1720},[1721],{"type":71,"content":1722},[1723],{"text":1724,"type":75,"marks":1725},"You can use a personal loan to consolidate your existing high-interest debt into a single new loan with a single monthly payment.",[1726],{"type":124,"attrs":1727},{"class":126},{"type":116,"content":1729},[1730],{"type":71,"content":1731},[1732],{"text":1733,"type":75,"marks":1734},"Home improvements that add value to your house are a great way to utilize personal loans.",[1735],{"type":124,"attrs":1736},{"class":126},{"type":116,"content":1738},[1739],{"type":71,"content":1740},[1741],{"text":1742,"type":75},"Personal loans are not likely the smartest option when it comes to daily purchases. ",{"type":103,"attrs":1744,"content":1745},{"level":105},[1746],{"text":1747,"type":75,"marks":1748},"What is a personal loan?",[1749],{"type":111},{"type":71,"content":1751},[1752],{"text":1753,"type":75},"So, what exactly is a personal loan? In short, it's a type of loan that can be used for just about anything — from paying off credit cards to covering unexpected medical bills. Unlike car loans or mortgages, there aren't many restrictions on how you can use a personal loan. However, loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",{"type":71,"content":1755},[1756],{"text":1757,"type":75},"There are two types of personal loans: secured and unsecured. Most personal loans are unsecured, meaning the lender doesn’t require you to offer collateral like a home or car to back them up. These are considered less risky than secured loans, which do require collateral. However, interest rates on unsecured personal loans may be higher than rates on secured loans.",{"type":71,"content":1759},[1760],{"text":1761,"type":75},"When taking out a personal loan, it's important to consider the terms, rates, and payment schedule carefully to make sure you can comfortably afford the monthly payments. In the long run, a personal loan can be a useful tool for achieving your financial goals — as long as you’re not taking on more debt than you can handle.",{"type":103,"attrs":1763,"content":1764},{"level":105},[1765],{"text":155,"type":75,"marks":1766},[1767],{"type":111},{"type":71,"content":1769},[1770],{"text":1771,"type":75},"Once you decide to move forward with a personal loan, you’ll complete a loan application from a financial institution. The lender will then pull your credit report to determine your creditworthiness.",{"type":71,"content":1773},[1774,1776,1782],{"text":1775,"type":75},"If you have good credit history, the lender will offer you a low ",{"text":1777,"type":75,"marks":1778},"annual percentage rate (APR)",[1779],{"type":80,"attrs":1780},{"href":1781,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/what-is-apr/",{"text":1783,"type":75},". If you have bad credit, you may still receive a loan approval but for a higher interest rate. Other factors, such as the amount of money you borrow and the loan term (the time it will take you to pay off the loan) will impact your APR, as well.",{"type":71,"content":1785},[1786,1788,1794],{"text":1787,"type":75},"If you like the offer you receive, you’ll sign the loan agreement, and the lender will disburse the lump sum of cash, usually straight to your bank account. You’ll then pay it back in monthly installments until the loan term is up. (For this reason, personal loans are considered a type of “",{"text":1789,"type":75,"marks":1790},"installment loan",[1791],{"type":80,"attrs":1792},{"href":1793,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/what-is-an-installment-loan/",{"text":1795,"type":75},".”) If you miss a payment or make a late payment, you’ll have to pay a penalty. If you fail to pay back the loan, it could go to collections.",{"type":71,"content":1797},[1798],{"text":1799,"type":75},"That’s the brief overview of how personal loans work. Here’s how the whole process works in detail:",{"type":103,"attrs":1801,"content":1802},{"level":256},[1803],{"text":1804,"type":75,"marks":1805},"Step 1: Determine whether or not you need the loan",[1806],{"type":111},{"type":71,"content":1808},[1809],{"text":1810,"type":75},"While you can use a personal loan for just about anything, that doesn’t mean you should. For example, a lavish vacation adds little value to your long-term financial situation, and a personal loan will only compound that risk. It’s also not recommended to use a personal loan for weddings, parties, or large purchases. These are all hard to justify going into debt for.",{"type":71,"content":1812},[1813,1815,1821],{"text":1814,"type":75},"Of course, big unexpected expenses like home repairs can sometimes leave you with limited options. You can either put off the renovation until you’ve saved up enough cash, or use a financing option such as a personal loan to cover it. A personal loan is easier to justify if the home repair or renovation absolutely cannot wait, will definitely ",{"text":1816,"type":75,"marks":1817},"add value to your home",[1818],{"type":80,"attrs":1819},{"href":1820,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/get-personal-loan-for-home-improvements/",{"text":1822,"type":75},", and can’t be covered by insurance. In this case, a personal loan can give you the cash you need right away.",{"type":71,"content":1824},[1825,1827,1833],{"text":1826,"type":75},"Debt consolidation is another popular reason to take out a personal loan. If you have high credit card debt or multiple lines of credit, you can use a personal loan to ",{"text":1828,"type":75,"marks":1829},"consolidate your payments",[1830],{"type":80,"attrs":1831},{"href":1832,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/using-a-personal-loan-for-debt-consolidation/",{"text":1834,"type":75}," into a single new loan with a new interest rate. The benefit here is that you can work with one institution to pay off your overall debt rather than having to juggle multiple lenders and bills. You may also be able to save money in interest charges by converting your high-interest-rate debt into a lower-interest-rate personal loan.",{"type":71,"content":1836},[1837],{"text":1838,"type":75},"A good general guideline is that if the expense is not urgent or necessary to your wellbeing, it may be wise to wait until you have the cash in your savings account to fund that expenditure. If it is urgent and necessary, a personal loan could be a great solution.",{"type":103,"attrs":1840,"content":1841},{"level":256},[1842],{"text":1843,"type":75,"marks":1844},"Step 2: Assess your financial situation",[1845],{"type":111},{"type":71,"content":1847},[1848,1850,1856],{"text":1849,"type":75},"When considering a personal loan, make sure that taking on additional debt will not put you in a worse position than you’re currently in. You can do this by ",{"text":1851,"type":75,"marks":1852},"looking at your monthly budget",[1853],{"type":80,"attrs":1854},{"href":1855,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.nerdwallet.com/article/finance/how-to-budget",{"text":1857,"type":75}," and making sure you have enough extra income to cover the monthly payment on your personal loan. You should also pull your credit report to get an idea of what kind of rates you’ll qualify for.",{"type":103,"attrs":1859,"content":1860},{"level":335},[1861],{"text":1862,"type":75,"marks":1863},"Find your credit score",[1864],{"type":111},{"type":71,"content":1866},[1867,1869,1874,1876,1882],{"text":1868,"type":75},"Lenders typically require a ",{"text":1870,"type":75,"marks":1871},"minimum credit score",[1872],{"type":80,"attrs":1873},{"href":596,"uuid":83,"anchor":83,"target":85,"linktype":86},{"text":1875,"type":75}," of 560 to 660 before they’ll agree to lend to you. If you have a ",{"text":1877,"type":75,"marks":1878},"credit score above 700",[1879],{"type":80,"attrs":1880},{"href":1881,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/what-is-a-personal-loan/",{"text":1883,"type":75},", you’ll qualify for even lower interest rates, which will allow you to save a considerable amount of money over the life of the loan.",{"type":103,"attrs":1885,"content":1886},{"level":335},[1887],{"text":1888,"type":75,"marks":1889},"Determine your DTI",[1890],{"type":111},{"type":71,"content":1892},[1893,1895,1901],{"text":1894,"type":75},"Lenders also consider other factors, like your ",{"text":1896,"type":75,"marks":1897},"debt-to-income (DTI)",[1898],{"type":80,"attrs":1899},{"href":1900,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/terms/d/dti.asp",{"text":1902,"type":75}," ratio. Your DTI is your total monthly debt divided by your gross monthly income. Because individuals with higher DTI ratios tend to have more trouble making payments, lenders view those borrowers as riskier. For that reason, they offer those borrowers higher interest rates.",{"type":103,"attrs":1904,"content":1905},{"level":335},[1906],{"text":1907,"type":75,"marks":1908},"Look at your credit history",[1909],{"type":111},{"type":71,"content":1911},[1912],{"text":1913,"type":75},"The length of your credit history is important, as well. If a lender can see that you are consistently making on-time payments on your other forms of debt, they may be more likely to offer you a lower rate. Lenders also favor borrowers with high income and/or few other debt obligations. If your current financial situation is less than ideal, it may be wise to wait until it improves before applying for a personal loan.",{"type":103,"attrs":1915,"content":1916},{"level":256},[1917],{"text":1918,"type":75,"marks":1919},"Step 3: Shop lenders",[1920],{"type":111},{"type":71,"content":1922},[1923,1925,1931],{"text":1924,"type":75},"If you’ve determined that a personal loan is right for you, it’s time to research your options. Every lender offers different rates, terms, fees, and perks, so it’s worth shopping around. If possible, try to only get rate estimates from lenders who advertise “free rate checks,” or “",{"text":1926,"type":75,"marks":1927},"soft credit pulls",[1928],{"type":80,"attrs":1929},{"href":1930,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.earnest.com/blog/soft-vs-hard-credit-inquiries/",{"text":1932,"type":75},",” especially if you’re early in the research process. These kinds of credit checks won’t show up on your credit report. ",{"type":71,"content":1934},[1935],{"text":1936,"type":75},"“Hard credit checks,” however, will show up on your report. These types of credit pulls are unavoidable in the final application phase, but are worth keeping track of. If a lender sees multiple hard credit pulls on your report, they might view you as a riskier borrower. Credit bureaus typically react the same way, dropping your credit score by several points per hard credit check.",{"type":71,"content":1938},[1939,1941,1947],{"text":1940,"type":75},"There is one exception to this rule. If you make multiple hard credit pulls within a certain time period, ",{"text":1942,"type":75,"marks":1943},"typically 45 days",[1944],{"type":80,"attrs":1945},{"href":1946,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.forbes.com/advisor/credit-score/soft-credit-check-vs-hard-credit-check/",{"text":1948,"type":75},", those pulls will all get lumped together and will show up on your credit report as a single inquiry. This is called the “rate shopping exception” and is designed to protect borrowers who are just trying to do their due diligence. So it’s best to try and complete all your rate shopping within this 45-day window.",{"type":103,"attrs":1950,"content":1951},{"level":256},[1952],{"text":1953,"type":75,"marks":1954},"Step 4: Evaluate your offers",[1955],{"type":111},{"type":71,"content":1957},[1958],{"text":1959,"type":75},"Once you find a lender you like, you’ll fill out a personal loan application, which usually includes things like your social security number, pay stubs, and other financial documents. Once you submit your applications, each lender will make you an offer. Here are a few things to consider when reviewing your loan offers:",{"type":103,"attrs":1961,"content":1962},{"level":335},[1963],{"text":1964,"type":75,"marks":1965},"Interest rate",[1966],{"type":111},{"type":71,"content":1968},[1969],{"text":1970,"type":75},"Your personal loan interest rate, or APR, will determine how much money you’ll pay in addition to the principal (the total amount of money you borrowed). The higher the loan APR, the more you’ll pay over the life of the loan.",{"type":103,"attrs":1972,"content":1973},{"level":335},[1974],{"text":1975,"type":75,"marks":1976},"Type of interest rate",[1977],{"type":111},{"type":71,"content":1979},[1980,1982,1988],{"text":1981,"type":75},"There are two types of interest rates: ",{"text":1983,"type":75,"marks":1984},"fixed rates and variable rates",[1985],{"type":80,"attrs":1986},{"href":1987,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.earnest.com/blog/student-loan-variable-or-fixed/",{"text":1989,"type":75},". Fixed interest rates lock you into a single rate for the entire life of the loan. Variable interest rates, however, fluctuate according to a national benchmark called a “rate index.” When national interest rates go up, so will the rate index—and therefore so will the monthly payment on your variable-rate loan. Variable rates can be beneficial if interest rates are high now but might fall in the future.",{"type":103,"attrs":1991,"content":1992},{"level":335},[1993],{"text":1994,"type":75,"marks":1995},"Repayment term",[1996],{"type":111},{"type":71,"content":1998},[1999,2001,2007],{"text":2000,"type":75},"Your loan term, or repayment period, will also impact your monthly payment amount. Personal loan terms are typically 12 to 60 months",{"text":2002,"type":75,"marks":2003},"1",[2004],{"type":124,"attrs":2005},{"class":2006},"superscript",{"text":2008,"type":75},". The longer your loan term, the lower and more affordable your monthly payments will be. However, paying interest for a longer period of time means your loan will cost you more in the long run.",{"type":103,"attrs":2010,"content":2011},{"level":335},[2012],{"text":2013,"type":75,"marks":2014},"Origination fees",[2015],{"type":111},{"type":71,"content":2017},[2018,2020,2026],{"text":2019,"type":75},"Most lenders charge upfront costs during the application process to cover administrative expenses. Sometimes the ",{"text":2021,"type":75,"marks":2022},"origination fee",[2023],{"type":80,"attrs":2024},{"href":2025,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/personal-loan-origination-fees/",{"text":2027,"type":75}," is a small flat rate. Other times, it’s a percentage based on the amount of money borrowed. If you’re borrowing a large sum, your fees could be substantial. Before you take out a loan, make sure you understand how the lender plans to charge for origination.",{"type":103,"attrs":2029,"content":2030},{"level":335},[2031],{"text":2032,"type":75,"marks":2033},"Other fees",[2034],{"type":111},{"type":71,"content":2036},[2037],{"text":2038,"type":75},"Some banks, credit unions, or other financial institutions may charge additional fees. Late fees, prepayment penalties, and other processing fees could ultimately affect the loan’s affordability.",{"type":103,"attrs":2040,"content":2041},{"level":335},[2042],{"text":2043,"type":75,"marks":2044},"Monthly payments",[2045],{"type":111},{"type":71,"content":2047},[2048,2050,2056],{"text":2049,"type":75},"Once you know your ",{"text":2051,"type":75,"marks":2052},"principal, interest rate, repayment term, and fees,",[2053],{"type":80,"attrs":2054},{"href":2055,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.gdrc.org/icm/loan-glossary.html",{"text":2057,"type":75}," you will be able to calculate your monthly payment. (Most loan agreements will state this amount, but you can calculate it ahead of time using a personal loan calculator.) Your monthly payment is the cost that the lender will expect you to pay each month for the duration of the loan term. Before you sign the loan contract, make sure the monthly payment is an amount you can easily afford.   ",{"type":71,"content":2059},[2060],{"text":2061,"type":75},"Payment structure isn’t the only factor that can affect your choice of loan provider. Take time to read only reviews and do some research. Make sure the lender is trustworthy and reputable and has a track record of good customer service.",{"type":103,"attrs":2063,"content":2064},{"level":256},[2065],{"text":2066,"type":75,"marks":2067},"Step 5: Sign on the dotted line and receive your lump sum",[2068],{"type":111},{"type":71,"content":2070},[2071,2073,2079],{"text":2072,"type":75},"Once you select a lender, it's time to sign the agreement and receive your funds in as little as a day. Some lenders will give you a ",{"text":2074,"type":75,"marks":2075},"grace period",[2076],{"type":80,"attrs":2077},{"href":2078,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/terms/g/grace_period.asp",{"text":2080,"type":75}," during which you can change your mind. This is usually the space of time after you’ve signed the agreement and before you’ve received your funds. For some lenders, this period is less than a day. For others, it’s up to a week. Once you receive your loan amount, you are committed to the loan.",{"type":103,"attrs":2082,"content":2083},{"level":256},[2084],{"text":2085,"type":75,"marks":2086},"Step 6: Make on-time payments",[2087],{"type":111},{"type":71,"content":2089},[2090],{"text":2091,"type":75},"The final step is to pay back the loan. If you planned properly, your loan payments should fit into your monthly budget, and you should have no problem making them on time.",{"type":71,"content":2093},[2094,2096,2102],{"text":2095,"type":75},"Keep in mind that missing a payment will result in a penalty, but isn’t the end of the world. Missing multiple payments, however, can have ",{"text":2097,"type":75,"marks":2098},"serious negative consequences",[2099],{"type":80,"attrs":2100},{"href":2101,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/what-happens-if-you-dont-pay-back-personal-loan/",{"text":2103,"type":75},". If you fail to repay a secured personal loan, the lender could seize the asset you offered up as collateral. If you fail to pay back an unsecured personal loan, you’ll face other repercussions, like damage to your credit score, fees, collections calls, and even lawsuits from your creditors.",{"type":103,"attrs":2105,"content":2106},{"level":105},[2107],{"text":2108,"type":75,"marks":2109},"Pros and cons of personal loans",[2110],{"type":111},{"type":71,"content":2112},[2113],{"text":2114,"type":75},"There are positives and negatives associated with most financial decisions. It is important to understand both to determine if a personal loan is right for you. ",{"type":71,"content":2116},[2117],{"text":2118,"type":75},"Here are some of the pros of taking out a personal loan:",{"type":113,"content":2120},[2121,2131,2141,2151,2161],{"type":116,"content":2122},[2123],{"type":71,"content":2124},[2125,2129],{"text":2126,"type":75,"marks":2127},"One lump sum",[2128],{"type":111},{"text":2130,"type":75},": The funds are delivered all at once and can be used immediately. This makes personal loans convenient for large purchases",{"type":116,"content":2132},[2133],{"type":71,"content":2134},[2135,2139],{"text":2136,"type":75,"marks":2137},"Quick approval process:",[2138],{"type":111},{"text":2140,"type":75}," You can get approved for a personal loan in as little as a day.",{"type":116,"content":2142},[2143],{"type":71,"content":2144},[2145,2149],{"text":2146,"type":75,"marks":2147},"Lower interest rates than credit cards",[2148],{"type":111},{"text":2150,"type":75},": Personal loans generally carry low interest rates relative to most credit cards. While credit cards may offer generous introductory terms, their rates can become very high once those introductory periods expire.",{"type":116,"content":2152},[2153],{"type":71,"content":2154},[2155,2159],{"text":2156,"type":75,"marks":2157},"Simpler payments",[2158],{"type":111},{"text":2160,"type":75},": You can use a personal loan as a debt consolidation loan to pay off credit cards and other short-term loans. This is essentially a DIY refinance of your high-interest debt. After you refinance, you’ll be left with a single loan with a simple monthly payment.",{"type":116,"content":2162},[2163],{"type":71,"content":2164},[2165,2169],{"text":2166,"type":75,"marks":2167},"Lower monthly payments",[2168],{"type":111},{"text":2170,"type":75},": Compared to other short-term loans, personal loans tend to have the best rates, longest loan terms, and lowest monthly payments.",{"type":71,"content":2172},[2173],{"text":2174,"type":75},"Some of the cons of personal loans include:",{"type":113,"content":2176},[2177,2187,2197,2207,2217],{"type":116,"content":2178},[2179],{"type":71,"content":2180},[2181,2185],{"text":2182,"type":75,"marks":2183},"Additional debt",[2184],{"type":111},{"text":2186,"type":75},": If you’re not financially stable, taking on more debt could leave you in a worse situation.",{"type":116,"content":2188},[2189],{"type":71,"content":2190},[2191,2195],{"text":2192,"type":75,"marks":2193},"Hard on borrowers with bad credit",[2194],{"type":111},{"text":2196,"type":75},": If your credit is not up to par, you could receive unfavorable rates — or fail to qualify for a personal loan at all.",{"type":116,"content":2198},[2199],{"type":71,"content":2200},[2201,2205],{"text":2202,"type":75,"marks":2203},"Potentially high fees",[2204],{"type":111},{"text":2206,"type":75},": Origination and processing fees can add up. Make sure your monthly payments are affordable.",{"type":116,"content":2208},[2209],{"type":71,"content":2210},[2211,2215],{"text":2212,"type":75,"marks":2213},"You could need collateral",[2214],{"type":111},{"text":2216,"type":75},": Depending on your creditworthiness, you may be obligated to offer collateral, such as a car or savings account, to secure the loan. This puts some of your biggest personal investments at risk.",{"type":116,"content":2218},[2219],{"type":71,"content":2220},[2221,2225],{"text":2222,"type":75,"marks":2223},"Not for every scenario",[2224],{"type":111},{"text":2226,"type":75},": If taking out a personal loan won’t help you gain equity, it’s usually better to put off the expense until you’ve saved up more cash.",{"type":103,"attrs":2228,"content":2229},{"level":105},[2230],{"text":2231,"type":75,"marks":2232},"Where can I get a personal loan?",[2233],{"type":111},{"type":71,"content":2235},[2236],{"text":2237,"type":75},"Many different financial institutions offer personal loans. Here are a few of the most popular:",{"type":113,"content":2239},[2240,2252,2265],{"type":116,"content":2241},[2242],{"type":71,"content":2243},[2244,2250],{"text":2245,"type":75,"marks":2246},"Online lenders",[2247,2249],{"type":80,"attrs":2248},{"href":832,"uuid":83,"anchor":83,"target":85,"linktype":86},{"type":111},{"text":2251,"type":75},": These allow you to shop and compare interest rates without having to leave your home. A potential downside is that you’re less likely to have a pre-existing relationship with an online lender, so they might offer higher rates than banks or credit unions, depending on your credit history.",{"type":116,"content":2253},[2254],{"type":71,"content":2255},[2256,2263],{"text":2257,"type":75,"marks":2258},"Credit unions",[2259,2262],{"type":80,"attrs":2260},{"href":2261,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/can-i-get-personal-loan-from-credit-union/",{"type":111},{"text":2264,"type":75},": Credit unions are a better option for borrowers with poor credit because they tend to have softer eligibility requirements and lower rates. You must be a member of the credit union, which can require a small fee. They also generally require in-person appointments to take out a loan.",{"type":116,"content":2266},[2267],{"type":71,"content":2268},[2269,2276],{"text":2270,"type":75,"marks":2271},"Banks",[2272,2275],{"type":80,"attrs":2273},{"href":2274,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.nerdwallet.com/article/loans/personal-loans/personal-loan-bank-credit-union",{"type":111},{"text":2277,"type":75},": If you already have a relationship with a bank, they might be the easiest lender for you to work with, and your financial history together could help you secure a lower rate than you would get with an online lender. Sometimes banks will require you to apply for the loan in person, which can be inconvenient. Banks often charge higher interest rates than credit unions do.",{"type":103,"attrs":2279,"content":2280},{"level":105},[2281],{"text":2282,"type":75,"marks":2283},"Personal loan alternatives",[2284],{"type":111},{"type":71,"content":2286},[2287],{"text":2288,"type":75},"if you’ve determined that a personal loan isn’t right for your situation, consider one of these alternatives:",{"type":113,"content":2290},[2291,2304,2317,2330],{"type":116,"content":2292},[2293],{"type":71,"content":2294},[2295,2302],{"text":2296,"type":75,"marks":2297},"Credit cards",[2298,2301],{"type":80,"attrs":2299},{"href":2300,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/finance/credit-cards/what-is-a-credit-card/",{"type":111},{"text":2303,"type":75},": A credit card is a line of funds issued to a user for purchasing everyday goods and services. Credit cards tend to have high interest rates if you don’t make the monthly payments on time.",{"type":116,"content":2305},[2306],{"type":71,"content":2307},[2308,2315],{"text":2309,"type":75,"marks":2310},"Cash-out refinance",[2311,2314],{"type":80,"attrs":2312},{"href":2313,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/mortgages/cash-out-refinancing/",{"type":111},{"text":2316,"type":75},": If you take out a new mortgage loan that’s more than what you currently owe, you can receive the difference in cash. ",{"type":116,"content":2318},[2319],{"type":71,"content":2320},[2321,2328],{"text":2322,"type":75,"marks":2323},"Home equity loan",[2324,2327],{"type":80,"attrs":2325},{"href":2326,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-home-equity-loan-en-106/",{"type":111},{"text":2329,"type":75},": A home equity loan or home equity line of credit (HELOC) is a type of secured loan that’s backed by the equity in your home. Home equity loans sometimes have lower interest rates than personal loans. However, they can result in the foreclosure of your home if you don’t pay them back according to the terms.",{"type":116,"content":2331},[2332],{"type":71,"content":2333},[2334,2340],{"text":776,"type":75,"marks":2335},[2336,2339],{"type":80,"attrs":2337},{"href":2338,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-payday-loan-en-1567/",{"type":111},{"text":2341,"type":75},": Payday loans are small, short-term loans given as an advance on an individual's income. You’re supposed to pay them back as soon as your next paycheck comes in. If you don’t you could be subject to extremely high interest rates — anywhere from 20% to 400% of the principal.",{"type":103,"attrs":2343,"content":2344},{"level":105},[2345],{"text":816,"type":75,"marks":2346},[2347],{"type":111},{"type":71,"content":2349},[2350],{"text":2351,"type":75},"Personal loans are one of the most versatile types of loans out there. Unlike student loans or auto loans, they are relatively easy to obtain and can be used for almost anything. If you have a solid credit history and can afford to take on the monthly payments, you could be a perfect candidate for a personal loan.",{"type":71,"content":2353},[2354,2356,2361],{"text":2355,"type":75},"When considering lenders and your loan options, check out the ",{"text":2357,"type":75,"marks":2358},"Marketplace by Navient",[2359],{"type":80,"attrs":2360},{"href":832,"uuid":83,"anchor":83,"target":85,"linktype":86},{"text":2362,"type":75},". They have partnered with top financial institutions and bundled numerous options for you to review, all in one place.",{"type":71,"content":2364},[2365],{"text":839,"type":75,"marks":2366},[2367],{"type":124,"attrs":2368},{"class":843},{"type":71,"content":2370},[2371],{"text":2372,"type":75,"marks":2373},"1 Representative Example: If you borrow $5,000 on a 36 month repayment term and at a 10% APR, the monthly repayment will be $161.34. Total repayment will be $5,808.24. Total interest paid will be $808.24",[2374],{"type":124,"attrs":2375},{"class":843},{"type":68,"content":2377},[2378],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798216\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": 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\"651798216\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":2411,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":2420,"containerClasses":18,"useBackgroundImage":44,"_editable":2421},[2412],{"_uid":860,"component":861,"backToTopBtn":2413,"_editable":2419},[2414],{"url":2415,"_uid":866,"icon":2416,"text":868,"color":32,"event":18,"sizing":2417,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":2418},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798216\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798216\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798216\"}-->","https://www.marketplace.navient.com/blog/how-do-personal-loans-work/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798216\"}-->","how-do-personal-loans-work","navient_marketplace/blog/how-do-personal-loans-work",120,[],"3d47204c-5533-41fd-b153-9b5bf3966ffc","2023-02-28T18:40:15.447Z",[],{"name":2432,"created_at":2433,"published_at":2434,"updated_at":2435,"id":2436,"uuid":2437,"content":2438,"slug":3142,"full_slug":3143,"sort_by_date":83,"position":3144,"tag_list":3145,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":3146,"first_published_at":3147,"release_id":83,"lang":891,"path":3148,"alternates":3149,"default_full_slug":83,"translated_slugs":83},"Money Market vs High-Yield Savings","2025-04-07T18:31:50.290Z","2025-12-26T13:45:25.381Z","2025-12-26T13:45:25.411Z",651798217,"ad8a9099-34ab-46bd-909e-190ee0d78ae4",{"seo":2439,"_uid":20,"body":2442,"author":2452,"category":3139,"featured":44,"component":881,"canonicalTag":3140,"_editable":3141},{"_uid":15,"title":2440,"plugin":17,"og_image":18,"og_title":18,"description":2441,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Money Market vs. High-Yield Savings - Navient Marketplace","Money market vs. high-yield savings account, which is right for you? Get the info you need to make the right choice, including where to get started.",[2443,2455,3127],{"id":23,"_uid":24,"image":2444,"intro":2445,"author":2446,"classes":2447,"category":18,"featured":44,"blogTitle":2450,"component":46,"imageLink":2451,"blendImage":44,"authorRoute":2452,"publishedDate":2453,"backgroundColor":50,"_editable":2454},"//a.storyblok.com/f/110029/800x412/436be4a7fe/money-market-vs-high-yield-savings.png","Here’s what high-yield savings and money market accounts are, and how to determine which option is best for you.","Natasha Khullar Relph",[2448],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":2449},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798217\"}-->","Money Market vs. High-Yield Savings","/images/money-market-vs-high-yield-savings.png","natasha-khullar-relph","Updated: April 25, 2023","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798217\"}-->",{"_uid":53,"bloks":2456,"classes":851,"component":852,"mobileClasses":18,"containerContent":3125,"_editable":3126},[2457],{"_uid":56,"bloks":2458,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":3124},[2459,3095],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":2460,"alignSelf":662,"component":663,"_editable":3094},[2461],{"_uid":64,"color":65,"classes":66,"content":18,"richText":2462,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":3090,"_editable":3093},{"type":68,"content":2463},[2464,2475,2482,2491,2540,2547,2568,2577,2584,2591,2598,2607,2614,2734,2743,2750,2797,2806,2813,2821,2828,2836,2843,2851,2858,2866,2887,2896,2903,2932,2939,2973,2982,2989,3038,3047,3054,3073,3081],{"type":71,"content":2465},[2466],{"text":2467,"type":75,"marks":2468},"Navient may receive compensation when you click on links associated with this Navient Marketplace. Navient is not being compensated for any application, quotation, or the purchase of any financial products.",[2469,2471],{"type":124,"attrs":2470},{"class":843},{"type":2472,"attrs":2473},"textStyle",{"color":2474},"#000000",{"type":71,"content":2476},[2477],{"text":2478,"type":75,"marks":2479},"If you want to earn more from your savings in an FDIC-insured account, both high-yield savings and money market accounts are great options. But there are some differences between the two that may make one better for your lifestyle and financial goals than the other. Here’s what they are, and how to determine which is best for you. ",[2480],{"type":2472,"attrs":2481},{"color":2474},{"type":103,"attrs":2483,"content":2484},{"level":105},[2485],{"text":2486,"type":75,"marks":2487},"What is a money market account?",[2488,2489],{"type":111},{"type":2472,"attrs":2490},{"color":2474},{"type":71,"content":2492},[2493,2498,2508,2513,2522,2527,2531,2535],{"text":2494,"type":75,"marks":2495},"A money market account, or MMA, is a type of deposit account that pays you more interest on your money than a traditional savings account. Top money market accounts currently offer variable annual percentage yields (APYs) ",[2496],{"type":2472,"attrs":2497},{"color":2474},{"text":2499,"type":75,"marks":2500},"just over 4.0%",[2501,2504,2506],{"type":80,"attrs":2502},{"href":2503,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.businessinsider.com/personal-finance/best-money-market-accounts",{"type":2472,"attrs":2505},{"color":83},{"type":2507},"underline",{"text":2509,"type":75,"marks":2510},". MMAs also have the benefit of ",[2511],{"type":2472,"attrs":2512},{"color":83},{"text":2514,"type":75,"marks":2515},"federal insurance protection",[2516,2519,2521],{"type":80,"attrs":2517},{"href":2518,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.fdic.gov/resources/deposit-insurance/",{"type":2472,"attrs":2520},{"color":83},{"type":2507},{"text":2523,"type":75,"marks":2524},". ",[2525],{"type":2472,"attrs":2526},{"color":83},{"type":1535,"marks":2528},[2529],{"type":2472,"attrs":2530},{"color":83},{"type":1535,"marks":2532},[2533],{"type":2472,"attrs":2534},{"color":83},{"text":2536,"type":75,"marks":2537},"Unlike many high-interest savings accounts, a money market account gives you easier access to your money. You’ll have check-writing privileges and an ATM card, both of which let you spend directly from the account itself.",[2538],{"type":2472,"attrs":2539},{"color":83},{"type":71,"content":2541},[2542],{"text":2543,"type":75,"marks":2544},"On the downside, MMAs tend to have more requirements than other types of deposit accounts. You’re likely to see higher minimum account balances, high monthly maintenance fees, and low limits on the number of times you can actually spend from the account. The federal government requires banks to allow you to transfer money and write checks up to six times per month. Withdraw beyond that, and you could incur a fee. ",[2545],{"type":2472,"attrs":2546},{"color":2474},{"type":71,"content":2548},[2549,2554,2563],{"text":2550,"type":75,"marks":2551},"(Note that money market accounts are different from ",[2552],{"type":2472,"attrs":2553},{"color":2474},{"text":2555,"type":75,"marks":2556},"money market funds",[2557,2560,2562],{"type":80,"attrs":2558},{"href":2559,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/terms/m/money-marketfund.asp",{"type":2472,"attrs":2561},{"color":2474},{"type":2507},{"text":2564,"type":75,"marks":2565},", or MMFs. An MMF is a mutual fund that can be purchased through an investment fund company, brokerage firm, or bank. Unlike an MMA, which is a deposit account, an MMF is an investment product tied to the stock market.) ",[2566],{"type":2472,"attrs":2567},{"color":83},{"type":103,"attrs":2569,"content":2570},{"level":105},[2571],{"text":2572,"type":75,"marks":2573},"What is a high-yield savings account? ",[2574,2575],{"type":111},{"type":2472,"attrs":2576},{"color":2474},{"type":71,"content":2578},[2579],{"text":2580,"type":75,"marks":2581},"A high-yield savings account is similar to an MMA in that it’s an interest-bearing bank account that pays more than a traditional savings account. Like money market accounts, top high-yield savings accounts offer APYs over 4%. These interest rates are also likely to be a little higher than the ones you’ll be offered with an MMA.",[2582],{"type":2472,"attrs":2583},{"color":2474},{"type":71,"content":2585},[2586],{"text":2587,"type":75,"marks":2588},"Unlike a money market account, however, your high-yield savings account won’t have a checkbook, and isn't likely to have an ATM card. Money market accounts and high-yield savings accounts are held to similar regulations, and banks and financial institutions are only required to let you transfer money from a high-yield savings account up to six times a month without fees. ",[2589],{"type":2472,"attrs":2590},{"color":2474},{"type":71,"content":2592},[2593],{"text":2594,"type":75,"marks":2595},"That said, the fees aren’t likely to be as high as those on money market accounts, nor are the account minimums (some high-yield accounts require a minimum opening deposit or require you to set up direct deposits to get the highest rates). You can find some high-yield savings accounts with no minimum balance at all, and some offer unlimited transfers. ",[2596],{"type":2472,"attrs":2597},{"color":2474},{"type":103,"attrs":2599,"content":2600},{"level":105},[2601],{"text":2602,"type":75,"marks":2603},"Benefits of a high-yield savings account ",[2604,2605],{"type":111},{"type":2472,"attrs":2606},{"color":2474},{"type":71,"content":2608},[2609],{"text":2610,"type":75,"marks":2611},"Maintaining a high-yield savings account is a great way to earn high interest in a safe, FDIC-insured environment. Here are some of the biggest advantages. ",[2612],{"type":2472,"attrs":2613},{"color":2474},{"type":113,"content":2615},[2616,2631,2674,2689,2704,2719],{"type":116,"content":2617},[2618],{"type":71,"content":2619},[2620,2626],{"text":2621,"type":75,"marks":2622},"High-interest. ",[2623,2624],{"type":111},{"type":2472,"attrs":2625},{"color":2474},{"text":2627,"type":75,"marks":2628},"High-yield savings accounts pay significantly more than traditional savings accounts, and, generally, offer higher APYs than money market accounts.",[2629],{"type":2472,"attrs":2630},{"color":83},{"type":116,"content":2632},[2633],{"type":71,"content":2634},[2635,2641,2646,2655,2660,2669],{"text":2636,"type":75,"marks":2637},"Federal insurance. ",[2638,2639],{"type":111},{"type":2472,"attrs":2640},{"color":83},{"text":2642,"type":75,"marks":2643},"Unlike other investment vehicles, high-yield savings accounts are protected by either the ",[2644],{"type":2472,"attrs":2645},{"color":2474},{"text":2647,"type":75,"marks":2648},"Federal Deposit Insurance Corporation",[2649,2652,2654],{"type":80,"attrs":2650},{"href":2651,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.fdic.gov",{"type":2472,"attrs":2653},{"color":83},{"type":2507},{"text":2656,"type":75,"marks":2657}," (FDIC) or the ",[2658],{"type":2472,"attrs":2659},{"color":83},{"text":2661,"type":75,"marks":2662},"National Credit Union Administration",[2663,2666,2668],{"type":80,"attrs":2664},{"href":2665,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://ncua.gov",{"type":2472,"attrs":2667},{"color":83},{"type":2507},{"text":2670,"type":75,"marks":2671}," (NCUA). Both guarantee that you’ll be reimbursed for your savings, up to $250,000 per depositor, in case of bank failure.",[2672],{"type":2472,"attrs":2673},{"color":83},{"type":116,"content":2675},[2676],{"type":71,"content":2677},[2678,2684],{"text":2679,"type":75,"marks":2680},"Can access money if you need to. ",[2681,2682],{"type":111},{"type":2472,"attrs":2683},{"color":83},{"text":2685,"type":75,"marks":2686},"Federal Reserve regulations allow you to move your money around six times per month without fees. Beyond that, the cost of transferring money varies by financial institution.",[2687],{"type":2472,"attrs":2688},{"color":83},{"type":116,"content":2690},[2691],{"type":71,"content":2692},[2693,2699],{"text":2694,"type":75,"marks":2695},"Lower fees. ",[2696,2697],{"type":111},{"type":2472,"attrs":2698},{"color":83},{"text":2700,"type":75,"marks":2701},"If fees are incurred, they’re likely to be lower than the fees associated with money market accounts.",[2702],{"type":2472,"attrs":2703},{"color":83},{"type":116,"content":2705},[2706],{"type":71,"content":2707},[2708,2714],{"text":2709,"type":75,"marks":2710},"Lower minimum account balances",[2711,2712],{"type":111},{"type":2472,"attrs":2713},{"color":83},{"text":2715,"type":75,"marks":2716},". High-yield savings accounts often require no minimum account balance. Even if they do, the minimum balance is usually lower than what you’d need to maintain in money market savings.",[2717],{"type":2472,"attrs":2718},{"color":83},{"type":116,"content":2720},[2721],{"type":71,"content":2722},[2723,2729],{"text":2724,"type":75,"marks":2725},"Lower initial deposit.",[2726,2727],{"type":111},{"type":2472,"attrs":2728},{"color":83},{"text":2730,"type":75,"marks":2731}," While you may need to make a minimum deposit to open your account, this is likely to be a lower amount of money than what you’d need to open an MMA. That can make high-yield savings accounts a better choice for newer savers.",[2732],{"type":2472,"attrs":2733},{"color":83},{"type":103,"attrs":2735,"content":2736},{"level":105},[2737],{"text":2738,"type":75,"marks":2739},"Benefits of a money market savings account ",[2740,2741],{"type":111},{"type":2472,"attrs":2742},{"color":2474},{"type":71,"content":2744},[2745],{"text":2746,"type":75,"marks":2747},"If you’re looking for flexibility, money market savings accounts have the edge. Here are some other benefits you should know about. ",[2748],{"type":2472,"attrs":2749},{"color":2474},{"type":113,"content":2751},[2752,2767,2782],{"type":116,"content":2753},[2754],{"type":71,"content":2755},[2756,2762],{"text":2757,"type":75,"marks":2758},"Federal insurance: ",[2759,2760],{"type":111},{"type":2472,"attrs":2761},{"color":2474},{"text":2763,"type":75,"marks":2764},"Like high-yield savings accounts, MMAs are typically (but not always) protected by federal insurance providers. Look for “Member NCUA” or “Member FDIC” on your account disclosures.",[2765],{"type":2472,"attrs":2766},{"color":83},{"type":116,"content":2768},[2769],{"type":71,"content":2770},[2771,2777],{"text":2772,"type":75,"marks":2773},"Better flexibility:",[2774,2775],{"type":111},{"type":2472,"attrs":2776},{"color":83},{"text":2778,"type":75,"marks":2779}," A money market account gives you far more flexibility and access than a high-yield savings account, especially if you have multiple accounts at the same bank. Most money market accounts allow you to write checks and use an ATM card, while many high-yield savings accounts require you to transfer funds to an external checking account before you can do those things.",[2780],{"type":2472,"attrs":2781},{"color":83},{"type":116,"content":2783},[2784],{"type":71,"content":2785},[2786,2792],{"text":2787,"type":75,"marks":2788},"Physical locations: ",[2789,2790],{"type":111},{"type":2472,"attrs":2791},{"color":83},{"text":2793,"type":75,"marks":2794},"Money market accounts are generally offered by national financial institutions with multiple brick-and-mortar bank locations. Conversely, many top high-yield savings accounts are largely offered by online banks. So, if you like to do your banking in person, money market accounts come out ahead. ",[2795],{"type":2472,"attrs":2796},{"color":83},{"type":103,"attrs":2798,"content":2799},{"level":105},[2800],{"text":2801,"type":75,"marks":2802},"When to consider an alternative to both a money market and high-yield savings account",[2803,2804],{"type":111},{"type":2472,"attrs":2805},{"color":2474},{"type":71,"content":2807},[2808],{"text":2809,"type":75,"marks":2810},"Both money market accounts and high-yield savings accounts are ideal for storing savings that you need easy access to but don’t expect to use immediately — like an emergency fund or savings for a down payment. If you’re looking to do any of the following, however, you may want to consider other types of accounts for your personal finance needs.",[2811],{"type":2472,"attrs":2812},{"color":2474},{"type":103,"attrs":2814,"content":2815},{"level":256},[2816],{"text":2817,"type":75,"marks":2818},"You want an account for everyday banking",[2819],{"type":2472,"attrs":2820},{"color":2474},{"type":71,"content":2822},[2823],{"text":2824,"type":75,"marks":2825},"Both money market accounts and high-yield savings accounts have withdrawal limits mandated by Regulation D, a federal law that specifies how financial services institutions must classify different types of deposit accounts. In practice, this means you can’t withdraw your money more than six times per month without incurring fees. High-yield savings accounts also rarely provide check-writing privileges or ATM cards. So if you’re looking for an account to handle your day-to-day banking needs, consider a high-interest checking account instead. ",[2826],{"type":2472,"attrs":2827},{"color":2474},{"type":103,"attrs":2829,"content":2830},{"level":256},[2831],{"text":2832,"type":75,"marks":2833},"You’ll have trouble maintaining a minimum account balance",[2834],{"type":2472,"attrs":2835},{"color":2474},{"type":71,"content":2837},[2838],{"text":2839,"type":75,"marks":2840},"A common requirement for opening both types of accounts is maintaining a minimum daily or monthly balance. If you know that you’ll have trouble maintaining a minimum balance at all times, look for an account that doesn’t require any minimum. ",[2841],{"type":2472,"attrs":2842},{"color":2474},{"type":103,"attrs":2844,"content":2845},{"level":256},[2846],{"text":2847,"type":75,"marks":2848},"You’re trying to build long-term wealth",[2849],{"type":2472,"attrs":2850},{"color":2474},{"type":71,"content":2852},[2853],{"text":2854,"type":75,"marks":2855},"Both the high-yield savings account and money market account are good options for short-term savings because they allow you to grow your money without giving up access to it. Still, neither account offers you enough to keep up with inflation. If you’re trying to build long-term wealth, consider products that offer higher returns — even if that means you lose access to the balance for some period of time. ",[2856],{"type":2472,"attrs":2857},{"color":2474},{"type":103,"attrs":2859,"content":2860},{"level":256},[2861],{"text":2862,"type":75,"marks":2863},"You want guaranteed rates",[2864],{"type":2472,"attrs":2865},{"color":2474},{"type":71,"content":2867},[2868,2873,2882],{"text":2869,"type":75,"marks":2870},"One of the primary draws of high-yield accounts is their high APY, but these rates are subject to change without notice. That’s because they fluctuate in keeping with the Fed’s benchmark interest rate. The Fed may lower this rate during an economic downturn to make it cheaper for consumers to borrow or invest, and raise the rate to tackle inflation. (This happened in 2022, when the Fed rate rose to 4.5% — its ",[2871],{"type":2472,"attrs":2872},{"color":2474},{"text":2874,"type":75,"marks":2875},"highest level in 15 years",[2876,2879,2881],{"type":80,"attrs":2877},{"href":2878,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.theguardian.com/business/2022/dec/14/fed-interest-rate-increase",{"type":2472,"attrs":2880},{"color":83},{"type":2507},{"text":2883,"type":75,"marks":2884},".) If you want guaranteed rates, consider opening a CD instead. ",[2885],{"type":2472,"attrs":2886},{"color":83},{"type":103,"attrs":2888,"content":2889},{"level":105},[2890],{"text":2891,"type":75,"marks":2892},"Money market account or high-yield savings, which is right for me? ",[2893,2894],{"type":111},{"type":2472,"attrs":2895},{"color":2474},{"type":71,"content":2897},[2898],{"text":2899,"type":75,"marks":2900},"A money market account may be better for you if:",[2901],{"type":2472,"attrs":2902},{"color":2474},{"type":113,"content":2904},[2905,2914,2923],{"type":116,"content":2906},[2907],{"type":71,"content":2908},[2909],{"text":2910,"type":75,"marks":2911},"You want to have the option of writing checks.",[2912],{"type":2472,"attrs":2913},{"color":2474},{"type":116,"content":2915},[2916],{"type":71,"content":2917},[2918],{"text":2919,"type":75,"marks":2920},"You want to spend money directly from the account via ATM withdrawals.",[2921],{"type":2472,"attrs":2922},{"color":83},{"type":116,"content":2924},[2925],{"type":71,"content":2926},[2927],{"text":2928,"type":75,"marks":2929},"You don’t mind potentially higher minimum balance requirements.",[2930],{"type":2472,"attrs":2931},{"color":83},{"type":71,"content":2933},[2934],{"text":2935,"type":75,"marks":2936},"A high-yield savings account may be better for you if:",[2937],{"type":2472,"attrs":2938},{"color":2474},{"type":113,"content":2940},[2941,2955,2964],{"type":116,"content":2942},[2943],{"type":71,"content":2944},[2945,2950],{"text":2946,"type":75,"marks":2947},"You want slightly higher rates of ",[2948],{"type":2472,"attrs":2949},{"color":2474},{"text":2951,"type":75,"marks":2952},"interest. ",[2953],{"type":2472,"attrs":2954},{"color":83},{"type":116,"content":2956},[2957],{"type":71,"content":2958},[2959],{"text":2960,"type":75,"marks":2961},"You don’t want to worry about maintaining a minimum balance (many high-yield savings accounts these days don’t require one).",[2962],{"type":2472,"attrs":2963},{"color":83},{"type":116,"content":2965},[2966],{"type":71,"content":2967},[2968],{"text":2969,"type":75,"marks":2970},"You don’t expect to write checks from the account and have no need for a debit card. ",[2971],{"type":2472,"attrs":2972},{"color":83},{"type":103,"attrs":2974,"content":2975},{"level":105},[2976],{"text":2977,"type":75,"marks":2978},"Alternatives to money market and high-yield savings accounts ",[2979,2980],{"type":111},{"type":2472,"attrs":2981},{"color":2474},{"type":71,"content":2983},[2984],{"text":2985,"type":75,"marks":2986},"While money market accounts and high-yield savings accounts can offer higher interest rates, there are some other low-risk alternatives for saving your money and keeping it liquid. Some of these include:",[2987],{"type":2472,"attrs":2988},{"color":2474},{"type":213,"attrs":2990,"content":2992},{"order":2991},{"order":215},[2993,3008,3023],{"type":116,"content":2994},[2995],{"type":71,"content":2996},[2997,3003],{"text":2998,"type":75,"marks":2999},"Certificates of deposit: ",[3000,3001],{"type":111},{"type":2472,"attrs":3002},{"color":2474},{"text":3004,"type":75,"marks":3005},"CDs are savings products that allow you to earn interest on a lump sum for a fixed period of time at a fixed interest rate. The only catch is that you can’t touch that money during that term period. While CDs are typically available for one- or two-year terms, some banks offer shorter term periods as well.",[3006],{"type":2472,"attrs":3007},{"color":83},{"type":116,"content":3009},[3010],{"type":71,"content":3011},[3012,3018],{"text":3013,"type":75,"marks":3014},"High-interest checking account: ",[3015,3016],{"type":111},{"type":2472,"attrs":3017},{"color":83},{"text":3019,"type":75,"marks":3020},"A high-interest checking account won’t give you the same high APY as an MMA or high-yield savings account, but their interest rates are still better than the national average. (Note that many high-interest checking accounts have a cap on the amount they’ll pay high rates on, so they’re not the best option for larger sums.)",[3021],{"type":2472,"attrs":3022},{"color":83},{"type":116,"content":3024},[3025],{"type":71,"content":3026},[3027,3033],{"text":3028,"type":75,"marks":3029},"IRA savings account: ",[3030,3031],{"type":111},{"type":2472,"attrs":3032},{"color":83},{"text":3034,"type":75,"marks":3035},"You can also store your short-term savings in an individual retirement account, or IRA. When you put your money into your account, just choose to leave it in cash instead of investing it. You’ll get better rates keeping your money here than you would on a standard savings account. Where IRA savings accounts get tricky is with taxation: while you won’t pay tax on the money you deposit in this account, you will pay tax upon withdrawal, which only makes it a good option if you intend to keep your money in the account relatively long-term.",[3036],{"type":2472,"attrs":3037},{"color":83},{"type":103,"attrs":3039,"content":3040},{"level":105},[3041],{"text":3042,"type":75,"marks":3043},"Explore savings accounts on Navient Marketplace",[3044,3045],{"type":111},{"type":2472,"attrs":3046},{"color":2474},{"type":71,"content":3048},[3049],{"text":3050,"type":75,"marks":3051},"Both high-yield savings accounts and money market accounts offer more in interest than your traditional savings account. Money market accounts have the edge in flexibility, but they generally require more money to maintain (I.e., higher minimums, fees, and initial deposit amounts). High-yield savings accounts may not offer checks or an ATM card, but you’ll probably earn slightly more interest and spend less money maintaining them. ",[3052],{"type":2472,"attrs":3053},{"color":2474},{"type":71,"content":3055},[3056,3061,3068],{"text":3057,"type":75,"marks":3058},"Want to explore these accounts and more? Check out ",[3059],{"type":2472,"attrs":3060},{"color":2474},{"text":614,"type":75,"marks":3062},[3063,3065,3067],{"type":80,"attrs":3064},{"href":832,"uuid":83,"anchor":83,"target":85,"linktype":86},{"type":2472,"attrs":3066},{"color":83},{"type":2507},{"text":3069,"type":75,"marks":3070}," to compare, contrast, and determine which best suits your lifestyle. ",[3071],{"type":2472,"attrs":3072},{"color":83},{"type":71,"content":3074},[3075],{"text":839,"type":75,"marks":3076},[3077,3079],{"type":124,"attrs":3078},{"class":843},{"type":2472,"attrs":3080},{"color":2474},{"type":71,"content":3082},[3083],{"text":3084,"type":75,"marks":3085},"Information in this blog, including the rates advertised, are current as of 4/25/2023.",[3086,3088],{"type":124,"attrs":3087},{"class":843},{"type":2472,"attrs":3089},{"color":2474},{"type":68,"content":3091},[3092],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", 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minutes.",{"type":68,"content":3107},[3108],{"type":71},[3110],{"url":3111,"_uid":3113,"icon":3114,"text":3115,"color":696,"sizing":3116,"classes":707,"rounded":44,"outlined":44,"component":708,"textColor":685,"hoverBgColor":685,"mobileClasses":709,"hoverTextColor":696,"navigationType":3120,"_editable":3121},{"id":18,"url":3112,"linktype":86,"fieldtype":691,"cached_url":3112},"https://marketplace.navient.com/banking-and-savings/","08c3ca2f-2028-4076-8336-aed3375938a2",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":83,"copyright":83,"fieldtype":694},"See Options",[3117],{"_uid":3118,"width":700,"height":701,"fontSize":702,"component":703,"mobileWidth":704,"mobileHeight":701,"fontSizeMobile":705,"_editable":3119},"ffb10bb7-1782-42a4-9ce3-7d26e6d3c65e","\u003C!--#storyblok#{\"name\": \"buttonSizing\", \"space\": \"157494\", \"uid\": \"ffb10bb7-1782-42a4-9ce3-7d26e6d3c65e\", \"id\": \"651798217\"}-->",[],"\u003C!--#storyblok#{\"name\": \"CheckYourRateBtn\", \"space\": 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\"651798217\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":3128,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":3137,"containerClasses":18,"useBackgroundImage":44,"_editable":3138},[3129],{"_uid":860,"component":861,"backToTopBtn":3130,"_editable":3136},[3131],{"url":3132,"_uid":866,"icon":3133,"text":868,"color":32,"event":18,"sizing":3134,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":3135},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798217\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798217\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798217\"}-->","Savings","https://www.marketplace.navient.com/blog/money-market-vs-high-yield-savings/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798217\"}-->","money-market-vs-high-yield-savings","navient_marketplace/blog/money-market-vs-high-yield-savings",130,[],"e500e713-d34c-40e7-a5bd-0b75db31b557","2023-05-03T19:51:28.423Z","blog/money-market-vs-high-yield-savings/",[],{"name":3151,"created_at":3152,"published_at":3153,"updated_at":3154,"id":3155,"uuid":3156,"content":3157,"slug":4064,"full_slug":4065,"sort_by_date":83,"position":4066,"tag_list":4067,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":4068,"first_published_at":4069,"release_id":83,"lang":891,"path":83,"alternates":4070,"default_full_slug":83,"translated_slugs":83},"Best High-Yield Savings Accounts of March 2023","2025-04-07T18:31:52.016Z","2025-12-26T13:45:25.733Z","2025-12-26T13:45:25.769Z",651798218,"c0d2f288-784a-41c0-9890-5f82ea099cd0",{"seo":3158,"_uid":20,"body":3161,"author":2452,"category":3139,"featured":44,"component":881,"canonicalTag":4062,"_editable":4063},{"_uid":15,"title":3159,"plugin":17,"og_image":18,"og_title":18,"description":3160,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Best High-Yield Savings Accounts of March 2023  - Navient Marketplace","The best high-yield savings accounts offer interest rates 15-25x higher than traditional savings accounts. Review top high-yield savings accounts here.",[3162,3170,4050],{"id":23,"_uid":24,"image":3163,"intro":3164,"author":2446,"classes":3165,"category":18,"featured":44,"blogTitle":3151,"component":46,"imageLink":3168,"blendImage":44,"authorRoute":2452,"publishedDate":2453,"backgroundColor":50,"_editable":3169},"//a.storyblok.com/f/110029/800x528/02de70c797/best-high-yield-savings-account.png","If your short-term goals require immediate funds, a personal loan can be a reliable option. Here's what you need to know.",[3166],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":3167},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798218\"}-->","/images/best-high-yield-savings-account.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798218\"}-->",{"_uid":53,"bloks":3171,"classes":851,"component":852,"mobileClasses":18,"containerContent":4048,"_editable":4049},[3172],{"_uid":56,"bloks":3173,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":4047},[3174,4021],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":3175,"alignSelf":662,"component":663,"_editable":4020},[3176],{"_uid":64,"color":65,"classes":66,"content":18,"richText":3177,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":4016,"_editable":4019},{"type":68,"content":3178},[3179,3188,3195,3202,3238,3245,3280,3288,3295,3303,3324,3332,3348,3356,3372,3380,3401,3409,3425,3433,3449,3457,3487,3495,3516,3524,3545,3553,3569,3577,3598,3606,3627,3635,3651,3659,3666,3758,3766,3832,3840,3940,3947,3982,4007],{"type":71,"content":3180},[3181],{"text":2467,"type":75,"marks":3182},[3183,3185],{"type":124,"attrs":3184},{"class":843},{"type":2472,"attrs":3186},{"color":3187},"rgb(0, 0, 0)",{"type":71,"content":3189},[3190],{"text":3191,"type":75,"marks":3192},"If you’ve ever wished you could put your savings somewhere they could grow that wasn’t as risky as the stock market, a high-yield savings account could be for you. It’s an environment where you’ll earn more interest than you would in a traditional savings account, and there is no risk of loss in a high-yield savings account, up to the FDIC insurance limit. Here are some great choices right now, plus what you need to know to evaluate them. ",[3193],{"type":2472,"attrs":3194},{"color":3187},{"type":103,"attrs":3196,"content":3197},{"level":105},[3198],{"text":2572,"type":75,"marks":3199},[3200],{"type":2472,"attrs":3201},{"color":3187},{"type":71,"content":3203},[3204,3209,3219,3224,3233],{"text":3205,"type":75,"marks":3206},"A high-yield savings account is similar to a traditional savings account, except it pays significantly more in interest on the funds deposited. ",[3207],{"type":2472,"attrs":3208},{"color":3187},{"text":3210,"type":75,"marks":3211},"According to data from the FDIC",[3212,3215,3218],{"type":80,"attrs":3213},{"href":3214,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.fdic.gov/regulations/resources/rates/#one",{"type":2472,"attrs":3216},{"color":3217},"rgb(17, 85, 204)",{"type":2507},{"text":3220,"type":75,"marks":3221},", the national average APY  (",[3222],{"type":2472,"attrs":3223},{"color":3187},{"text":3225,"type":75,"marks":3226},"annual percentage yields",[3227,3230,3232],{"type":80,"attrs":3228},{"href":3229,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/what-is-annual-percentage-yield/",{"type":2472,"attrs":3231},{"color":3217},{"type":2507},{"text":3234,"type":75,"marks":3235},") for a savings account is currently 0.30%. Compare that to some of the top high-yield savings accounts — which boast APYs just over 4.0% — and it’s easy to see the appeal. ",[3236],{"type":2472,"attrs":3237},{"color":3187},{"type":71,"content":3239},[3240],{"text":3241,"type":75,"marks":3242},"The downsides are that there may be limitations on the number of times you can withdraw and transfer money from the account. Many high-yield savings accounts require a minimum deposit, and, though high-yield accounts pay more in interest than regular savings accounts, you still may not earn enough to keep up with inflation (today, the rate of inflation is higher than the interest rate paid on high-yield savings accounts). ",[3243],{"type":2472,"attrs":3244},{"color":3187},{"type":71,"content":3246},[3247,3252,3261,3266,3275],{"text":3248,"type":75,"marks":3249},"Another benefit to these types of savings accounts is that they’re more flexible than CDs (",[3250],{"type":2472,"attrs":3251},{"color":3187},{"text":3253,"type":75,"marks":3254},"certificates of deposit",[3255,3258,3260],{"type":80,"attrs":3256},{"href":3257,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.chase.com/personal/banking/education/basics/define-certificate-of-deposit",{"type":2472,"attrs":3259},{"color":3217},{"type":2507},{"text":3262,"type":75,"marks":3263},"), which require you to keep your money locked in for a set term. High-yield savings accounts are also much less risky than the stock market. As such, they can be ideal for hitting short-term savings goals, like beefing up ",[3264],{"type":2472,"attrs":3265},{"color":3187},{"text":3267,"type":75,"marks":3268},"your emergency fund",[3269,3272,3274],{"type":80,"attrs":3270},{"href":3271,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.earnest.com/blog/how-much-should-you-save-in-your-emergency-fund/",{"type":2472,"attrs":3273},{"color":3217},{"type":2507},{"text":3276,"type":75,"marks":3277}," or socking away cash for a down payment on a home.",[3278],{"type":2472,"attrs":3279},{"color":3187},{"type":103,"attrs":3281,"content":3282},{"level":105},[3283],{"text":3284,"type":75,"marks":3285},"Great high-yield savings accounts – March 2023",[3286],{"type":2472,"attrs":3287},{"color":3187},{"type":71,"content":3289},[3290],{"text":3291,"type":75,"marks":3292},"High-yield savings accounts can vary widely. Each one has a different APY, minimum balance, and fee schedule. Here are some great  options for March 2023.",[3293],{"type":2472,"attrs":3294},{"color":3187},{"type":103,"attrs":3296,"content":3297},{"level":256},[3298],{"text":3299,"type":75,"marks":3300},"1. MySavingsDirect: 4.35% APY, $1 minimum opening deposit",[3301],{"type":2472,"attrs":3302},{"color":2474},{"type":71,"content":3304},[3305,3310,3319],{"text":3306,"type":75,"marks":3307},"A division of Emigrant Bank, ",[3308],{"type":2472,"attrs":3309},{"color":2474},{"text":3311,"type":75,"marks":3312},"MySavingsDirect",[3313,3316,3318],{"type":80,"attrs":3314},{"href":3315,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.mysavingsdirect.com/securebanking/login.do",{"type":2472,"attrs":3317},{"color":83},{"type":2507},{"text":3320,"type":75,"marks":3321}," allows customers to open a high-yield online savings account with as little as $1. The bank has a competitive APY — the highest rate on our list — but it comes with some limitations. You’ll need to mail a check to fund your account, and MySavingsDirect offers neither ATM access or mobile check deposit. On the plus side, you won’t have to pay a monthly fee or maintain a minimum balance to keep the account open. ",[3322],{"type":2472,"attrs":3323},{"color":83},{"type":103,"attrs":3325,"content":3326},{"level":256},[3327],{"text":3328,"type":75,"marks":3329},"2. UFB Direct: 4.21% APY, No minimum opening deposit",[3330],{"type":2472,"attrs":3331},{"color":2474},{"type":71,"content":3333},[3334,3343],{"text":3335,"type":75,"marks":3336},"UFB Direct",[3337,3340,3342],{"type":80,"attrs":3338},{"href":3339,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.ufbdirect.com/",{"type":2472,"attrs":3341},{"color":2474},{"type":2507},{"text":3344,"type":75,"marks":3345}," (a division of Axos Bank) offers a high-yield savings account with competitive interest rates. The 4.21% APY is attractive, as are the zero minimum balance requirement and total lack of maintenance fees. What sets UFB apart, though, is that it offers ATM access, which few online banks do. The account also permits mobile check deposits. ",[3346],{"type":2472,"attrs":3347},{"color":83},{"type":103,"attrs":3349,"content":3350},{"level":256},[3351],{"text":3352,"type":75,"marks":3353},"3. Popular Direct: 4.16% APY, $5,000 minimum opening deposit",[3354],{"type":2472,"attrs":3355},{"color":2474},{"type":71,"content":3357},[3358,3367],{"text":3359,"type":75,"marks":3360},"Popular Direct’s High Rise Savings",[3361,3364,3366],{"type":80,"attrs":3362},{"href":3363,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.populardirect.com/products/savings",{"type":2472,"attrs":3365},{"color":2474},{"type":2507},{"text":3368,"type":75,"marks":3369}," account requires a steep opening deposit, but you get what you pay for. This account offers one of the best savings account rates of the year, and it requires zero monthly maintenance fees. (However, you will incur a $25 fee if you close the account within the first 180 days.) Account holders also get access to 24/7 customer support and an intuitive mobile app. ",[3370],{"type":2472,"attrs":3371},{"color":83},{"type":103,"attrs":3373,"content":3374},{"level":256},[3375],{"text":3376,"type":75,"marks":3377},"4. Bask Bank: 4.16% APY, No minimum opening deposit",[3378],{"type":2472,"attrs":3379},{"color":2474},{"type":71,"content":3381},[3382,3387,3396],{"text":3383,"type":75,"marks":3384},"A division of Texas Capital Bank, ",[3385],{"type":2472,"attrs":3386},{"color":2474},{"text":3388,"type":75,"marks":3389},"Bask Bank",[3390,3393,3395],{"type":80,"attrs":3391},{"href":3392,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.baskbank.com/products/interest-savings-account",{"type":2472,"attrs":3394},{"color":83},{"type":2507},{"text":3397,"type":75,"marks":3398}," offers online-only Interest Savings accounts with competitive rates. While fairly new to the game, Bask is already proving itself to be a top competitor in terms of a high APY, zero minimum balance requirement, and zero monthly fees. There’s also no minimum opening deposit to open a new account. The biggest downside is account access: you’ll need to link to an external bank account and initiate a bank transfer to deposit or withdraw money. As of now, Bask Bank does not allow joint accounts. ",[3399],{"type":2472,"attrs":3400},{"color":83},{"type":103,"attrs":3402,"content":3403},{"level":256},[3404],{"text":3405,"type":75,"marks":3406},"5. Salem Five Direct: 4.10% APY, $10 minimum opening deposit",[3407],{"type":2472,"attrs":3408},{"color":2474},{"type":71,"content":3410},[3411,3420],{"text":3412,"type":75,"marks":3413},"Salem Five Direct",[3414,3417,3419],{"type":80,"attrs":3415},{"href":3416,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.salemfivedirect.com/#eonesavings",{"type":2472,"attrs":3418},{"color":2474},{"type":2507},{"text":3421,"type":75,"marks":3422}," became the first online bank in the U.S. back in 1995, and it’s still a major contender today. The APY on a Salem Five Direct high-yield savings account is among the highest on this list, and they’ll pay it on balances up to $1 million. You can open a Salem Five Direct account with an opening deposit of just $10. (Disclaimer: this account is only available to customers who don’t already have a checking or savings account with Salem Five Bank.) ",[3423],{"type":2472,"attrs":3424},{"color":83},{"type":103,"attrs":3426,"content":3427},{"level":256},[3428],{"text":3429,"type":75,"marks":3430},"6. CIT Bank: 4.05% APY, $100 minimum opening deposit",[3431],{"type":2472,"attrs":3432},{"color":2474},{"type":71,"content":3434},[3435,3444],{"text":3436,"type":75,"marks":3437},"CIT Bank",[3438,3441,3443],{"type":80,"attrs":3439},{"href":3440,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.cit.com/cit-bank/bank/savings/savings-connect-account",{"type":2472,"attrs":3442},{"color":2474},{"type":2507},{"text":3445,"type":75,"marks":3446}," offers a high-interest savings account called Savings Connect, which you can open with a starting balance of $100. After that, there’s no monthly service fee. CIT ranks high on customer support availability with live chat and automated phone assistance options available 24/7. This account is also one of the few to offer debit card access. You can make deposits via transfer, or deposit checks using their mobile banking app. ",[3447],{"type":2472,"attrs":3448},{"color":83},{"type":103,"attrs":3450,"content":3451},{"level":256},[3452],{"text":3453,"type":75,"marks":3454},"7. PNC Bank: 4.00% APY, No minimum opening deposit",[3455],{"type":2472,"attrs":3456},{"color":2474},{"type":71,"content":3458},[3459,3468,3473,3482],{"text":3460,"type":75,"marks":3461},"PNC’s digital high yield savings account",[3462,3465,3467],{"type":80,"attrs":3463},{"href":3464,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.pnc.com/en/personal-banking/banking/savings/high-yield-savings.html",{"type":2472,"attrs":3466},{"color":2474},{"type":2507},{"text":3469,"type":75,"marks":3470}," doesn’t charge monthly maintenance fees or require an opening deposit. Its minimum balance is also quite low: you can earn 4% APY as long as you maintain $1 in the account. It’s important to note, however, that the account is only available in select markets, and you may not be eligible if you live in ",[3471],{"type":2472,"attrs":3472},{"color":83},{"text":3474,"type":75,"marks":3475},"certain states",[3476,3479,3481],{"type":80,"attrs":3477},{"href":3478,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.pnc.com/en/personal-banking/banking/savings/high-yield-savings.html#",{"type":2472,"attrs":3480},{"color":83},{"type":2507},{"text":3483,"type":75,"marks":3484},". There’s also a $25 fee if you close the account within the first 180 days.",[3485],{"type":2472,"attrs":3486},{"color":83},{"type":103,"attrs":3488,"content":3489},{"level":256},[3490],{"text":3491,"type":75,"marks":3492},"8. LendingClub Bank: 4.00% APY, $100 minimum opening deposit",[3493],{"type":2472,"attrs":3494},{"color":2474},{"type":71,"content":3496},[3497,3502,3511],{"text":3498,"type":75,"marks":3499},"With no monthly service fees, no minimum daily balance, and a generous APY,  ",[3500],{"type":2472,"attrs":3501},{"color":2474},{"text":3503,"type":75,"marks":3504},"LendingClub Bank's",[3505,3508,3510],{"type":80,"attrs":3506},{"href":3507,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.lendingclub.com/personal-banking/high-yield-savings-pd",{"type":2472,"attrs":3509},{"color":83},{"type":2507},{"text":3512,"type":75,"marks":3513}," high-yield savings account is a top choice for many customers. Better yet: this account comes with an ATM card, giving customers access to more than 325,000 machines worldwide (all with zero ATM fees). You can also deposit checks via the mobile app, set up direct deposits, and transfer money from external banks. The only downside is that there’s a $100 deposit required to open the account. ",[3514],{"type":2472,"attrs":3515},{"color":83},{"type":103,"attrs":3517,"content":3518},{"level":256},[3519],{"text":3520,"type":75,"marks":3521},"9. Synchrony Bank: 3.75% APY, No minimum opening deposit",[3522],{"type":2472,"attrs":3523},{"color":2474},{"type":71,"content":3525},[3526,3531,3540],{"text":3527,"type":75,"marks":3528},"With ",[3529],{"type":2472,"attrs":3530},{"color":2474},{"text":3532,"type":75,"marks":3533},"Synchrony Bank’s",[3534,3537,3539],{"type":80,"attrs":3535},{"href":3536,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.synchronybank.com/banking/high-yield-savings/",{"type":2472,"attrs":3538},{"color":83},{"type":2507},{"text":3541,"type":75,"marks":3542}," high-yield savings account, you’ll never have to pay monthly fees, make a minimum deposit, or maintain a minimum balance. The account also provides ATM access with unlimited ATM transactions. While there are fees associated with ATM use, the bank will refund $5 worth of domestic ATM fees monthly. You’ll also have access to your money through wire transfers (up to three free per statement cycle) and electronic transfers to outside accounts. The bank’s streamlined app is another perk; it earns consistently high reviews from customers. ",[3543],{"type":2472,"attrs":3544},{"color":83},{"type":103,"attrs":3546,"content":3547},{"level":256},[3548],{"text":3549,"type":75,"marks":3550},"10. SoFi: 3.75% APY, No minimum opening deposit",[3551],{"type":2472,"attrs":3552},{"color":2474},{"type":71,"content":3554},[3555,3564],{"text":3556,"type":75,"marks":3557},"SoFi’s Checking and Savings Account",[3558,3561,3563],{"type":80,"attrs":3559},{"href":3560,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.sofi.com/banking/savings-account/",{"type":2472,"attrs":3562},{"color":2474},{"type":2507},{"text":3565,"type":75,"marks":3566}," combines the best features of savings and checking accounts — all with a higher APY than many of its competitors. (Note that the APY is conditional; you can earn 3.75% on your savings and 2.50% on your checking balances, but only if you set up a direct deposit.) SoFi also stands out for its welcome bonus. You could earn $50 to $300, depending on how many direct deposits you make in a 30-day period. The account offers free ATM access and comes with “Money Vaults,” a tool to organize your money for specific savings goals. ",[3567],{"type":2472,"attrs":3568},{"color":83},{"type":103,"attrs":3570,"content":3571},{"level":256},[3572],{"text":3573,"type":75,"marks":3574},"11. Capital One: 3.30% APY, No minimum opening deposit ",[3575],{"type":2472,"attrs":3576},{"color":2474},{"type":71,"content":3578},[3579,3584,3593],{"text":3580,"type":75,"marks":3581},"While Capital One is perhaps best known as a credit card company, it also offers a number of high-quality banking services. Its ",[3582],{"type":2472,"attrs":3583},{"color":2474},{"text":3585,"type":75,"marks":3586},"360 Performance Savings",[3587,3590,3592],{"type":80,"attrs":3588},{"href":3589,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.capitalone.com/bank/savings-accounts/online-performance-savings-account/",{"type":2472,"attrs":3591},{"color":83},{"type":2507},{"text":3594,"type":75,"marks":3595},", for example, is one of the more competitive high-yield savings accounts on the market. There is no minimum balance requirement and no monthly fee, and it takes as little as five minutes to open a free account. That makes this a great option for high and low savers alike. The account permits mobile check deposit as well as electronic transfers. To make withdrawals, you can either schedule a transfer or withdraw cash by visiting a branch.",[3596],{"type":2472,"attrs":3597},{"color":83},{"type":103,"attrs":3599,"content":3600},{"level":256},[3601],{"text":3602,"type":75,"marks":3603},"12. Marcus by Goldman Sachs: 3.30% APY, No minimum opening deposit",[3604],{"type":2472,"attrs":3605},{"color":2474},{"type":71,"content":3607},[3608,3613,3622],{"text":3609,"type":75,"marks":3610},"With no minimum deposit and no fee, ",[3611],{"type":2472,"attrs":3612},{"color":2474},{"text":3614,"type":75,"marks":3615},"Marcus by Goldman Sachs",[3616,3619,3621],{"type":80,"attrs":3617},{"href":3618,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.marcus.com/us/en/savings/high-yield-savings",{"type":2472,"attrs":3620},{"color":83},{"type":2507},{"text":3623,"type":75,"marks":3624}," is a great choice for new savers. One downside: Marcus does not offer check-writing or mobile check deposit options. In fact, the only way to deposit a check is to mail it to the bank. Withdrawals are a little easier: you can request an ACH transfer by phone or do a free wire transfer to a linked account at another bank. ",[3625],{"type":2472,"attrs":3626},{"color":83},{"type":103,"attrs":3628,"content":3629},{"level":256},[3630],{"text":3631,"type":75,"marks":3632},"13. Ally Bank: 3.30% APY, No minimum balance",[3633],{"type":2472,"attrs":3634},{"color":2474},{"type":71,"content":3636},[3637,3646],{"text":3638,"type":75,"marks":3639},"Ally Bank",[3640,3643,3645],{"type":80,"attrs":3641},{"href":3642,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.ally.com/bank/online-savings-account/",{"type":2472,"attrs":3644},{"color":2474},{"type":2507},{"text":3647,"type":75,"marks":3648}," offers a strong APY, has no minimum balance requirements, and charges no monthly maintenance fees. You can get ATM access if you have an Ally checking account, and the bank will reimburse up to $10 per month in out-of-network ATM fees. You can also deposit checks through the mobile app. The downside is that Ally’s fees can add up. You get six free withdrawals or transfers per statement cycle, but after that, there’s a $10 fee per transaction. Ally also charges a $25 overdraft fee. ",[3649],{"type":2472,"attrs":3650},{"color":83},{"type":103,"attrs":3652,"content":3653},{"level":105},[3654],{"text":3655,"type":75,"marks":3656},"How to pick a high-yield savings account",[3657],{"type":2472,"attrs":3658},{"color":2474},{"type":71,"content":3660},[3661],{"text":3662,"type":75,"marks":3663},"When selecting a high-yield savings account that best suits your needs, you’ll want to keep a few things in mind:",[3664],{"type":2472,"attrs":3665},{"color":2474},{"type":113,"content":3667},[3668,3683,3698,3713,3728,3743],{"type":116,"content":3669},[3670],{"type":71,"content":3671},[3672,3678],{"text":3673,"type":75,"marks":3674},"APY: ",[3675,3676],{"type":111},{"type":2472,"attrs":3677},{"color":2474},{"text":3679,"type":75,"marks":3680},"Annual percentage yield is what you’ll earn on the money you put into your savings account. The higher this number, the more you’ll make.",[3681],{"type":2472,"attrs":3682},{"color":83},{"type":116,"content":3684},[3685],{"type":71,"content":3686},[3687,3693],{"text":3688,"type":75,"marks":3689},"Account fees:",[3690,3691],{"type":111},{"type":2472,"attrs":3692},{"color":83},{"text":3694,"type":75,"marks":3695}," High monthly fees can eat into your gains. Examine the fee schedule for each account, and make sure you know what you need to do to avoid them.",[3696],{"type":2472,"attrs":3697},{"color":83},{"type":116,"content":3699},[3700],{"type":71,"content":3701},[3702,3708],{"text":3703,"type":75,"marks":3704},"Minimum balance:",[3705,3706],{"type":111},{"type":2472,"attrs":3707},{"color":83},{"text":3709,"type":75,"marks":3710}," Some accounts require a minimum balance to stay open. Make sure this is an amount you’re comfortable leaving in your account. Also make sure you know the penalties for dropping below that balance.",[3711],{"type":2472,"attrs":3712},{"color":83},{"type":116,"content":3714},[3715],{"type":71,"content":3716},[3717,3723],{"text":3718,"type":75,"marks":3719},"Minimum opening deposit:",[3720,3721],{"type":111},{"type":2472,"attrs":3722},{"color":83},{"text":3724,"type":75,"marks":3725}," While many banks will open your account for free, some require an initial deposit of anywhere from $10 to $5,000.",[3726],{"type":2472,"attrs":3727},{"color":83},{"type":116,"content":3729},[3730],{"type":71,"content":3731},[3732,3738],{"text":3733,"type":75,"marks":3734},"Deposits and withdrawals:",[3735,3736],{"type":111},{"type":2472,"attrs":3737},{"color":83},{"text":3739,"type":75,"marks":3740}," Make sure you can access your money in a way that’s convenient for you. Only some accounts offer ATM cards, and many of these charge ATM fees. Many also limit the number of withdrawals you can make each month. If you plan to deposit checks, check whether there’s a mobile app that will let you do so from the comfort of your home.",[3741],{"type":2472,"attrs":3742},{"color":83},{"type":116,"content":3744},[3745],{"type":71,"content":3746},[3747,3753],{"text":3748,"type":75,"marks":3749},"Member FDIC:",[3750,3751],{"type":111},{"type":2472,"attrs":3752},{"color":83},{"text":3754,"type":75,"marks":3755}," Credit unions usually insure their deposit accounts through the National Credit Union Administration (NCUA). Banks, on the other hand, are protected by the Federal Deposit Insurance Corporation (FDIC). Through the FDIC, high-yield savings accounts are federally insured up to $250,000 per depositor. Most brick-and-mortar banks and big national banks (like American Express or Barclays) are FDIC-insured, but it’s always worth checking just to make sure.",[3756],{"type":2472,"attrs":3757},{"color":83},{"type":103,"attrs":3759,"content":3760},{"level":105},[3761],{"text":3762,"type":75,"marks":3763},"Benefits of a high-yield savings account",[3764],{"type":2472,"attrs":3765},{"color":3187},{"type":113,"content":3767},[3768,3788,3803],{"type":116,"content":3769},[3770],{"type":71,"content":3771},[3772,3778,3783],{"text":3773,"type":75,"marks":3774},"Significantly higher interest rates than a traditional savings account.",[3775,3776],{"type":111},{"type":2472,"attrs":3777},{"color":3187},{"text":3779,"type":75,"marks":3780}," The higher the interest rate, the more you’ll make from the money you deposit, ",[3781],{"type":2472,"attrs":3782},{"color":3187},{"text":3784,"type":75,"marks":3785},"thanks to compound interest.",[3786],{"type":2472,"attrs":3787},{"color":2474},{"type":116,"content":3789},[3790],{"type":71,"content":3791},[3792,3798],{"text":3793,"type":75,"marks":3794},"Don’t require you to store your money for a set period of time",[3795,3796],{"type":111},{"type":2472,"attrs":3797},{"color":3187},{"text":3799,"type":75,"marks":3800},". A CD account is another popular place to store money when you want to earn high interest. The downside to a CD account, however, is that you have to commit to keeping your money in it for a set term. If you want to take it out, you’ll have to pay a fee. High-yield savings accounts require no such commitment, though you may be limited in the number of times you can withdraw or transfer your money per month.",[3801],{"type":2472,"attrs":3802},{"color":3187},{"type":116,"content":3804},[3805],{"type":71,"content":3806},[3807,3813,3818,3827],{"text":3808,"type":75,"marks":3809},"Safer than the stock market. ",[3810,3811],{"type":111},{"type":2472,"attrs":3812},{"color":3187},{"text":3814,"type":75,"marks":3815},"High-yield savings accounts are best for storing money you don’t need right now, but may in the near future. Take an emergency fund for example. You don’t need it urgently, but you may need it for an unexpected expense. If you put your money in the stock market, it’s likely to generate a higher return than a high-yield savings account in the long-term. But in the short term, the stock market is volatile and could result in you losing a significant portion of your emergency fund. If you’re trying to store your emergency fund, or save up to buy a house or car in the next few years, you don’t want to risk losing that money in one fell swoop. High-yield savings accounts are a safe way to earn more than what you would usually earn by keeping your money in a traditional savings account. For longer-term goals like ",[3816],{"type":2472,"attrs":3817},{"color":3187},{"text":3819,"type":75,"marks":3820},"saving for retirement",[3821,3824,3826],{"type":80,"attrs":3822},{"href":3823,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.earnest.com/blog/what-is-a-roth-ira/",{"type":2472,"attrs":3825},{"color":3217},{"type":2507},{"text":3828,"type":75,"marks":3829},", however, there are other, better places to put your money. ",[3830],{"type":2472,"attrs":3831},{"color":3187},{"type":103,"attrs":3833,"content":3834},{"level":105},[3835],{"text":3836,"type":75,"marks":3837},"Disadvantages of a high-yield savings account",[3838],{"type":2472,"attrs":3839},{"color":3187},{"type":113,"content":3841},[3842,3857,3872,3887],{"type":116,"content":3843},[3844],{"type":71,"content":3845},[3846,3852],{"text":3847,"type":75,"marks":3848},"Not for everyday banking. ",[3849,3850],{"type":111},{"type":2472,"attrs":3851},{"color":3187},{"text":3853,"type":75,"marks":3854},"If you’re thinking you’ll be able to use your high-yield savings account like a second checking account, think again. These accounts aren’t ideal for people who move their money around a lot, because federal law only requires banks to allow you to withdraw or transfer funds a total of six times per month without fees.",[3855],{"type":2472,"attrs":3856},{"color":3187},{"type":116,"content":3858},[3859],{"type":71,"content":3860},[3861,3867],{"text":3862,"type":75,"marks":3863},"More hoops to jump through",[3864,3865],{"type":111},{"type":2472,"attrs":3866},{"color":3187},{"text":3868,"type":75,"marks":3869},". It’s not just limitations on moving your money that you’ll have to deal with when you open a high-yield savings account. There’s often a minimum account balance and maybe even a minimum initial deposit, too.",[3870],{"type":2472,"attrs":3871},{"color":3187},{"type":116,"content":3873},[3874],{"type":71,"content":3875},[3876,3882],{"text":3877,"type":75,"marks":3878},"Bad for building long-term wealth.",[3879,3880],{"type":111},{"type":2472,"attrs":3881},{"color":3187},{"text":3883,"type":75,"marks":3884}," High-yield savings accounts can enable you to earn more than you would in a traditional savings account. However, the interest you earn, even in a high-yield savings account, may not be enough to keep pace with inflation.",[3885],{"type":2472,"attrs":3886},{"color":3187},{"type":116,"content":3888},[3889],{"type":71,"content":3890},[3891,3897,3902,3907,3912,3921,3926,3935],{"text":3892,"type":75,"marks":3893},"Rates aren’t locked.",[3894,3895],{"type":111},{"type":2472,"attrs":3896},{"color":3187},{"text":3898,"type":75,"marks":3899}," That 4.0% interest rate might look appealing, but there’s no guarantee it will remain that high.",[3900],{"type":2472,"attrs":3901},{"color":3187},{"text":472,"type":75,"marks":3903},[3904],{"type":2472,"attrs":3905},{"color":3906},"rgb(61, 133, 198)",{"text":3908,"type":75,"marks":3909},"Interest rates offered by U.S. banks can go up or down according to the Federal Reserve’s interest rates. When the Fed raises rates, you may ",[3910],{"type":2472,"attrs":3911},{"color":2474},{"text":3913,"type":75,"marks":3914},"get a higher APY",[3915,3918,3920],{"type":80,"attrs":3916},{"href":3917,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.cnbc.com/select/how-the-fed-raising-interest-rates-again-affects-your-savings-account/",{"type":2472,"attrs":3919},{"color":83},{"type":2507},{"text":3922,"type":75,"marks":3923},". Conversely, if they choose to drop the ",[3924],{"type":2472,"attrs":3925},{"color":83},{"text":3927,"type":75,"marks":3928},"federal funds rate",[3929,3932,3934],{"type":80,"attrs":3930},{"href":3931,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.forbes.com/advisor/investing/federal-funds-rate/#:~:text=The%20Federal%20Open%20Markets%20Committee,currently%204.25%25%20to%204.50%25.",{"type":2472,"attrs":3933},{"color":83},{"type":2507},{"text":3936,"type":75,"marks":3937},", your interest rate could take a hit. This is unlike a CD, where the interest rate is usually locked in for the term of the CD.",[3938],{"type":2472,"attrs":3939},{"color":83},{"type":103,"attrs":3941,"content":3942},{"level":105},[3943],{"text":3042,"type":75,"marks":3944},[3945],{"type":2472,"attrs":3946},{"color":3187},{"type":71,"content":3948},[3949,3954,3963,3968,3977],{"text":3950,"type":75,"marks":3951},"A high-yield savings account is perfect for storing an emergency fund, ",[3952],{"type":2472,"attrs":3953},{"color":3187},{"text":3955,"type":75,"marks":3956},"a windfall",[3957,3960,3962],{"type":80,"attrs":3958},{"href":3959,"uuid":83,"anchor":83,"target":83,"linktype":86},"https://www.earnest.com/blog/what-to-do-with-tax-refund/",{"type":2472,"attrs":3961},{"color":3217},{"type":2507},{"text":3964,"type":75,"marks":3965},", or funds for a big purchase that you plan to make within the next five years. When you’re selecting a financial institution to open an account with, make sure to evaluate not just their APY, but also their terms and conditions. It’s important to know the rules of each account. After all, you don’t want to get caught paying fees you didn’t know existed. Also consider alternatives, like CD accounts and",[3966],{"type":2472,"attrs":3967},{"color":3187},{"text":3969,"type":75,"marks":3970}," money market accounts",[3971,3974,3976],{"type":80,"attrs":3972},{"href":3973,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/what-is-a-money-market-account-en-915/",{"type":2472,"attrs":3975},{"color":3217},{"type":2507},{"text":3978,"type":75,"marks":3979},", before you pull the trigger on a high-yield savings account. ",[3980],{"type":2472,"attrs":3981},{"color":3187},{"type":71,"content":3983},[3984,3988,3995,3999,4000,4001],{"text":3057,"type":75,"marks":3985},[3986],{"type":2472,"attrs":3987},{"color":3187},{"text":614,"type":75,"marks":3989},[3990,3992,3994],{"type":80,"attrs":3991},{"href":832,"uuid":83,"anchor":83,"target":85,"linktype":86},{"type":2472,"attrs":3993},{"color":3217},{"type":2507},{"text":3069,"type":75,"marks":3996},[3997],{"type":2472,"attrs":3998},{"color":3187},{"type":1535},{"type":1535},{"text":839,"type":75,"marks":4002},[4003,4005],{"type":124,"attrs":4004},{"class":843},{"type":2472,"attrs":4006},{"color":3187},{"type":71,"content":4008},[4009],{"text":4010,"type":75,"marks":4011},"Information in this blog, including the rates advertised, are current as of 04/25/2023 and subject to change. ",[4012,4014],{"type":124,"attrs":4013},{"class":843},{"type":2472,"attrs":4015},{"color":3187},{"type":68,"content":4017},[4018],{"type":71},"\u003C!--#storyblok#{\"name\": 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\"651798218\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":4051,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":4060,"containerClasses":18,"useBackgroundImage":44,"_editable":4061},[4052],{"_uid":860,"component":861,"backToTopBtn":4053,"_editable":4059},[4054],{"url":4055,"_uid":866,"icon":4056,"text":868,"color":32,"event":18,"sizing":4057,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":4058},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798218\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798218\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798218\"}-->","https://www.marketplace.navient.com/blog/best-high-yield-savings-account/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798218\"}-->","best-high-yield-savings-account","navient_marketplace/blog/best-high-yield-savings-account",140,[],"015453b5-a2d6-4ec4-ac1f-e3a99750ce98","2023-05-03T19:33:52.878Z",[],{"name":4072,"created_at":4073,"published_at":4074,"updated_at":4075,"id":4076,"uuid":4077,"content":4078,"slug":4674,"full_slug":4675,"sort_by_date":83,"position":4676,"tag_list":4677,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":4678,"first_published_at":4069,"release_id":83,"lang":891,"path":83,"alternates":4679,"default_full_slug":83,"translated_slugs":83},"Are High-Yield Savings Accounts Worth It?","2025-04-07T18:31:53.752Z","2025-12-26T13:45:25.979Z","2025-12-26T13:45:26.005Z",651798219,"f57a30a1-ef8a-420d-be4c-837fb5c69406",{"seo":4079,"_uid":20,"body":4082,"author":2452,"category":3139,"featured":44,"component":881,"canonicalTag":4672,"_editable":4673},{"_uid":15,"title":4080,"plugin":17,"og_image":18,"og_title":18,"description":4081,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Are High Yield Savings Accounts Worth It? - Navient Marketplace","Are high-yield savings accounts worth it? Not for everyone. Here are reasons for, and against, opening a high-yield savings account. ",[4083,4092,4660],{"id":23,"_uid":24,"image":4084,"intro":4085,"author":2446,"classes":4086,"category":18,"featured":44,"blogTitle":4089,"component":46,"imageLink":4090,"blendImage":44,"authorRoute":2452,"publishedDate":2453,"backgroundColor":50,"_editable":4091},"//a.storyblok.com/f/110029/1398x934/83c543ca7e/high-yield.png","While it’s true that they’re a great place to grow your savings, they may not be the best option in certain cases.",[4087],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":4088},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798219\"}-->","Are High-Yield Savings Accounts Worth It? Here’s How to Tell","/images/high-yield.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798219\"}-->",{"_uid":53,"bloks":4093,"classes":851,"component":852,"mobileClasses":18,"containerContent":4658,"_editable":4659},[4094],{"_uid":56,"bloks":4095,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":4657},[4096,4635],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":4097,"alignSelf":662,"component":663,"_editable":4634},[4098],{"_uid":64,"color":65,"classes":66,"content":18,"richText":4099,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":4630,"_editable":4633},{"type":68,"content":4100},[4101,4107,4111,4118,4150,4157,4161,4183,4187,4200,4204,4222,4226,4233,4237,4244,4251,4272,4279,4283,4287,4294,4301,4314,4321,4333,4337,4344,4357,4364,4368,4372,4413,4417,4477,4484,4488,4559,4566,4570,4577,4581,4585,4592,4596,4600,4606,4617,4623],{"type":71,"content":4102},[4103],{"text":2467,"type":75,"marks":4104},[4105],{"type":124,"attrs":4106},{"class":843},{"type":71,"content":4108},[4109],{"text":4110,"type":75},"High-interest savings accounts have gotten a lot of buzz over the last few years. If you’ve been following along, you might be asking yourself: Are high-yield savings accounts worth it? While it’s true that they’re a great place to grow your savings, they may not be the best option in certain cases. Sometimes a checking account, the stock market, or another interest-bearing savings account may be a better bet. So how can you tell if a high-yield account is right for you? ",{"type":103,"attrs":4112,"content":4113},{"level":105},[4114],{"text":4115,"type":75,"marks":4116},"Key takeaways ",[4117],{"type":111},{"type":113,"content":4119},[4120,4126,4132,4138,4144],{"type":116,"content":4121},[4122],{"type":71,"content":4123},[4124],{"text":4125,"type":75},"A high-yield savings account is a savings account that allows you to earn compound interest on your funds. ",{"type":116,"content":4127},[4128],{"type":71,"content":4129},[4130],{"text":4131,"type":75},"High-yield savings accounts have significantly higher interest rates than traditional savings accounts.",{"type":116,"content":4133},[4134],{"type":71,"content":4135},[4136],{"text":4137,"type":75},"High-yield savings accounts are most useful for building up short-term savings, like an emergency fund or a down payment for a home.",{"type":116,"content":4139},[4140],{"type":71,"content":4141},[4142],{"text":4143,"type":75},"High-yield savings accounts are less useful when your savings goals involve building long-term wealth. They’re also not ideal for everyday banking. ",{"type":116,"content":4145},[4146],{"type":71,"content":4147},[4148],{"text":4149,"type":75},"Popular alternatives to high-yield savings accounts include CD accounts and money market accounts.",{"type":103,"attrs":4151,"content":4152},{"level":105},[4153],{"text":4154,"type":75,"marks":4155},"What is a high-yield savings account?",[4156],{"type":111},{"type":71,"content":4158},[4159],{"text":4160,"type":75},"A high-yield savings account is like a traditional savings account but with one major difference: its APYs (annual percentage yields) are significantly higher. ",{"type":71,"content":4162},[4163,4165,4172,4174,4181],{"text":4164,"type":75},"Let’s look at some numbers to illustrate. With a traditional savings account, you might get an interest rate that’s a fraction of a percentage point. (For example, the Bank of America Advantage Savings account offers an ",{"text":4166,"type":75,"marks":4167},"APY of 0.01%",[4168,4171],{"type":80,"attrs":4169},{"href":4170,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.forbes.com/advisor/banking/savings/bank-of-america-savings-account-interest-rate",{"type":2507},{"text":4173,"type":75},".) High-yield savings accounts, on the other hand, usually offer savers much higher rates. Currently, the best high-yield savings accounts ",{"text":4175,"type":75,"marks":4176},"offer variable APYs over 4.0%.",[4177,4180],{"type":80,"attrs":4178},{"href":4179,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/best-high-yield-savings-accounts-4770633",{"type":2507},{"text":4182,"type":75}," That’s about 15 to 25 times higher than what you’d get with a traditional savings account.",{"type":71,"content":4184},[4185],{"text":4186,"type":75},"So, how exactly does that affect your savings? If you put $10,000 into the Bank of America Advantage Savings account and let it sit for three years without making any further deposits, you would earn $5 in that time. That would give you a total of $10,005 at the end of those three years, provided that your interest rate remained the same.",{"type":71,"content":4188},[4189,4191,4198],{"text":4190,"type":75},"Now let’s see what would happen if you put $10,000 into a competitive high-yield savings account instead. Say you deposited your money in a Betterment account, for example (Betterment ",{"text":4192,"type":75,"marks":4193},"currently offers APYs up to 4.0%",[4194,4197],{"type":80,"attrs":4195},{"href":4196,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.betterment.com/cash-reserve",{"type":2507},{"text":4199,"type":75},"). Not only would you make more money per year with this rate, but the interest is compounded. That means you make money on your initial balance as well as on your interest earnings. Thanks to compound interest, you would earn $1,272 over three years, provided that the rates didn’t change. In the end, you’d have a total of $11,272 in savings. ",{"type":71,"content":4201},[4202],{"text":4203,"type":75},"Though $1,272 might not seem like much over three years, it’s $1,267 more than you’d have otherwise. Better yet, you didn’t have to do anything other than move your money to a different account. ",{"type":71,"content":4205},[4206,4211,4213,4216,4218],{"text":4207,"type":75,"marks":4208},"*",[4209],{"type":4210},"italic",{"text":4212,"type":75},"Hypothetical",{"text":472,"type":75,"marks":4214},[4215],{"type":4210},{"text":4217,"type":75},"scenario",{"text":4219,"type":75,"marks":4220},", results may vary",[4221],{"type":4210},{"type":71,"content":4223},[4224],{"text":4225,"type":75},"While that might seem appealing, it’s important to note that high-yield savings accounts aren’t always worth it. There are certain scenarios in which you’re better off choosing an account that more effectively meets your financial goals. Here’s how to decide if a high-yield savings account is right for you.",{"type":103,"attrs":4227,"content":4228},{"level":105},[4229],{"text":4230,"type":75,"marks":4231},"Are high-yield savings accounts worth it? ",[4232],{"type":111},{"type":71,"content":4234},[4235],{"text":4236,"type":75},"A high-interest savings account can be an easy way to grow your money, but it’s not always the answer. Here are some scenarios to illustrate. ",{"type":103,"attrs":4238,"content":4239},{"level":256},[4240],{"text":4241,"type":75,"marks":4242},"When opening a high-yield savings account may be worth it ",[4243],{"type":111},{"type":103,"attrs":4245,"content":4246},{"level":335},[4247],{"text":4248,"type":75,"marks":4249},"When you’re building an emergency fund",[4250],{"type":111},{"type":71,"content":4252},[4253,4255,4261,4263,4270],{"text":4254,"type":75},"Experts recommend having ",{"text":4256,"type":75,"marks":4257},"enough cash in your emergency fund",[4258,4260],{"type":80,"attrs":4259},{"href":3271,"uuid":83,"anchor":83,"target":85,"linktype":86},{"type":2507},{"text":4262,"type":75}," to cover three to six months’ worth of expenses. Saving that much can be tough. Though you might be tempted to build your emergency fund via investing, the stock market can be particularly volatile short-term. The S&P 500 may deliver an ",{"text":4264,"type":75,"marks":4265},"average return of 11% per year",[4266,4269],{"type":80,"attrs":4267},{"href":4268,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp",{"type":2507},{"text":4271,"type":75},", but that’s just an average. In many years, you could end up with less money than you started with. A high-yield savings account, on the other hand, can help you grow an emergency fund at a higher APY than a traditional savings account can offer — and without the risk of losing it all overnight. ",{"type":103,"attrs":4273,"content":4274},{"level":335},[4275],{"text":4276,"type":75,"marks":4277},"When you’re saving up for a big purchase in the next few years",[4278],{"type":111},{"type":71,"content":4280},[4281],{"text":4282,"type":75},"Just as a high-yield savings account is a great way to build an emergency fund, it’s also a great way to grow short-term savings. That makes a high-yield savings account an ideal way to save for big purchases you intend to make in the next few years. ",{"type":71,"content":4284},[4285],{"text":4286,"type":75},"If you plan to buy a home, for example, a high-yield savings account will allow you to insulate your money from the volatility of the stock market while earning a higher rate of return. It’s a great balance between the safety of a traditional bank account and the ROI (return on investment) of the stock market. ",{"type":103,"attrs":4288,"content":4289},{"level":256},[4290],{"text":4291,"type":75,"marks":4292},"When opening a high-yield savings account doesn’t make sense ",[4293],{"type":111},{"type":103,"attrs":4295,"content":4296},{"level":335},[4297],{"text":4298,"type":75,"marks":4299},"When you want to build long-term wealth ",[4300],{"type":111},{"type":71,"content":4302},[4303,4305,4312],{"text":4304,"type":75},"Generally, a high-yield savings account will offer a higher APY than a traditional savings account will. Even so, the interest you earn won’t likely be enough to keep up with inflation. So, while your money might grow in a high-yield savings account, the value of the dollar is likely to decrease at an even faster rate than you earn interest. That means it’s not an effective way to build wealth over time. If you’re hoping to save for retirement or your kid’s college fund, for example, you’re better off investing in an account that offers a higher rate of return over time, ",{"text":4306,"type":75,"marks":4307},"like a 401k or IRA.",[4308,4311],{"type":80,"attrs":4309},{"href":4310,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.nerdwallet.com/article/investing/how-to-save-for-retirement",{"type":2507},{"text":4313,"type":75}," ",{"type":103,"attrs":4315,"content":4316},{"level":335},[4317],{"text":4318,"type":75,"marks":4319},"If you want an account for everyday banking ",[4320],{"type":111},{"type":71,"content":4322},[4323,4325,4332],{"text":4324,"type":75},"In the past, banks were federally mandated to limit the number of times you could move your money around in a high-yield savings account. They only allowed an account holder to transfer or withdraw money from a high-yield savings account six times per month. Then, in 2020, this federal mandate was lifted, in part to provide financial relief due to the pandemic. While some banks still keep the six-transfer limit in place, others place different limits at their discretion. Your bank may limit you to six transfers or withdrawals — or to 10, 20, ",{"text":4326,"type":75,"marks":4327},"or none at all.",[4328,4331],{"type":80,"attrs":4329},{"href":4330,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.bankrate.com/banking/federal-reserve-lifts-regulation-d-withdrawal-limit/",{"type":2507},{"text":4313,"type":75},{"type":71,"content":4334},[4335],{"text":4336,"type":75},"If you exceed your bank’s limit, you may have to pay penalties and fees. For this reason, you shouldn’t think of a high-yield savings account as a checking account. Nor should you plan to pay off credit card statements or other regular bills with it. If you use it this way, you may be in for some expensive surprises. Not only that, but high-yield savings accounts don’t come with ATM cards, debit cards, or checks. That means you can’t withdraw money as readily as you would with a checking account, even if you wanted to.",{"type":103,"attrs":4338,"content":4339},{"level":335},[4340],{"text":4341,"type":75,"marks":4342},"If you want some of the highest APY possible ",[4343],{"type":111},{"type":71,"content":4345},[4346,4348,4355],{"text":4347,"type":75},"Though high-yield savings accounts offer higher APYs than traditional deposit accounts, there are accounts that offer even higher yields. While some of the best high-yield savings accounts currently offer 3.0 to 4.0% APYs on your balance, some one-year CD (certificate of deposit) accounts offer ",{"text":4349,"type":75,"marks":4350},"upwards of 5.0%",[4351,4354],{"type":80,"attrs":4352},{"href":4353,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.investopedia.com/best-1-year-cd-rates-4796650",{"type":2507},{"text":4356,"type":75},". The only downside to a CD is that your money isn’t as accessible as it would be in a high-yield savings account. When you open a one-year CD, for example, you agree not to touch your money at all during that year. If you do make a withdrawal during that predetermined period of time, you risk paying high penalties.  ",{"type":103,"attrs":4358,"content":4359},{"level":105},[4360],{"text":4361,"type":75,"marks":4362},"Pros and cons of a high-yield savings account",[4363],{"type":111},{"type":71,"content":4365},[4366],{"text":4367,"type":75},"Still not sure if a high-yield savings account is for you? Here are some of the biggest pros and cons: ",{"type":71,"content":4369},[4370],{"text":4371,"type":75},"Pros: ",{"type":113,"content":4373},[4374,4393,4403],{"type":116,"content":4375},[4376],{"type":71,"content":4377},[4378,4382,4384,4391],{"text":4379,"type":75,"marks":4380},"High-interest:",[4381],{"type":111},{"text":4383,"type":75}," High-yield savings accounts are interest-bearing, and they offer rates higher than most savings accounts. As of April 2023, the national average APY for traditional savings accounts was ",{"text":4385,"type":75,"marks":4386},"just 0.39%",[4387,4390],{"type":80,"attrs":4388},{"href":4389,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.fdic.gov/resources/bankers/national-rates/",{"type":2507},{"text":4392,"type":75},". In contrast, many high yield online savings accounts offer APYs over 4%.",{"type":116,"content":4394},[4395],{"type":71,"content":4396},[4397,4401],{"text":4398,"type":75,"marks":4399},"FDIC Insured",[4400],{"type":111},{"text":4402,"type":75},": At banks, high-yield savings accounts are insured by the Federal Deposit Insurance Corporation for up to $250,000 per depositor. At credit unions, they’re insured by the National Credit Union administration. That means that even if the bank fails, the Fed will reimburse you for balances of up to $250,000.",{"type":116,"content":4404},[4405],{"type":71,"content":4406},[4407,4411],{"text":4408,"type":75,"marks":4409},"Insulated from losses",[4410],{"type":111},{"text":4412,"type":75},": In addition to being FDIC-insured, high-yield savings accounts are insulated from the short-term volatility of the stock market. When you deposit money into a high-yield savings account, you can be confident your savings won’t lose value in the way an investment in the stock market could.",{"type":71,"content":4414},[4415],{"text":4416,"type":75},"Cons:",{"type":113,"content":4418},[4419,4438,4457,4467],{"type":116,"content":4420},[4421],{"type":71,"content":4422},[4423,4427,4429,4436],{"text":4424,"type":75,"marks":4425},"Variable rates",[4426],{"type":111},{"text":4428,"type":75},": Though high-yield savings accounts offer relatively high interest rates, these are “variable” interest rates. Unlike fixed interest rates, variable rates tend to fluctuate based on national trends. (To see how rates are trending currently, you can check out the ",{"text":4430,"type":75,"marks":4431},"Federal Funds Rate",[4432,4435],{"type":80,"attrs":4433},{"href":4434,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.newyorkfed.org/markets/reference-rates/effr",{"type":2507},{"text":4437,"type":75},", a benchmark rate set by the U.S. Federal Reserve.) Variable rates are subject to change at any time. So, while you may see a high-yield savings account advertising a 4% APY, it’s possible that this rate could drop while your money is in the account.",{"type":116,"content":4439},[4440],{"type":71,"content":4441},[4442,4446,4448,4455],{"text":4443,"type":75,"marks":4444},"Won’t keep up with inflation",[4445],{"type":111},{"text":4447,"type":75},": High-yield savings accounts allow you to grow your balance relatively quickly — but likely not quickly enough to keep up with inflation. Over the last few years, inflation has been ",{"text":4449,"type":75,"marks":4450},"growing at a rate of around 6%",[4451,4454],{"type":80,"attrs":4452},{"href":4453,"uuid":83,"anchor":83,"target":85,"linktype":86},"https://www.usinflationcalculator.com/inflation/current-inflation-rates/#:~:text=The%20annual%20inflation%20rate%20for,Department%20data%20published%20Feb.%2014.",{"type":2507},{"text":4456,"type":75},". Top high-yield savings accounts, however, offer APYs of just over 4%.",{"type":116,"content":4458},[4459],{"type":71,"content":4460},[4461,4465],{"text":4462,"type":75,"marks":4463},"More requirements than a traditional savings account: ",[4464],{"type":111},{"text":4466,"type":75},"High-yield savings accounts may require minimum deposits and/or minimum account balances. If you fail to meet these minimums, you may have to pay penalties or have your account closed. Many high-yield accounts also require monthly fees.",{"type":116,"content":4468},[4469],{"type":71,"content":4470},[4471,4475],{"text":4472,"type":75,"marks":4473},"Not as accessible as a money market account or checking account",[4474],{"type":111},{"text":4476,"type":75},": A high-yield savings account isn’t the place to store money that you intend to use regularly. Some banks may limit you to six withdrawals or transfers per month. If you exceed that limit, you could incur fees.  ",{"type":103,"attrs":4478,"content":4479},{"level":105},[4480],{"text":4481,"type":75,"marks":4482},"How to pick a high-yield savings account ",[4483],{"type":111},{"type":71,"content":4485},[4486],{"text":4487,"type":75},"A number of big national banks, including Capital One, American Express, and Marcus by Goldman Sachs all offer high-yield savings accounts. There are also a number of reputable online banks that offer high-yield online savings accounts. With so many options, you might be tempted to just pick whichever account has the highest interest rate. But there’s more to it than that. Here are some questions you should ask yourself before you open one.",{"type":113,"content":4489},[4490,4500,4510,4520,4529,4539,4549],{"type":116,"content":4491},[4492],{"type":71,"content":4493},[4494,4498],{"text":4495,"type":75,"marks":4496},"Required initial deposit:",[4497],{"type":111},{"text":4499,"type":75}," Do you have to make a minimum deposit to open the account? If there is a required minimum, is it an amount you can afford?",{"type":116,"content":4501},[4502],{"type":71,"content":4503},[4504,4508],{"text":4505,"type":75,"marks":4506},"FDIC insurance",[4507],{"type":111},{"text":4509,"type":75},": Is the account federally insured? (Look for “member FDIC” on the account disclosures. This will ensure that your money is protected even if the bank fails.)",{"type":116,"content":4511},[4512],{"type":71,"content":4513},[4514,4518],{"text":4515,"type":75,"marks":4516},"Minimum balance requirements: ",[4517],{"type":111},{"text":4519,"type":75},"Will you have to keep a minimum amount of money in the account at all times? If your balance falls below this amount, will you have to pay fees or forfeit your account?",{"type":116,"content":4521},[4522],{"type":71,"content":4523},[4524,4527],{"text":1964,"type":75,"marks":4525},[4526],{"type":111},{"text":4528,"type":75},": Are you being offered a high APY? While APY isn’t the only thing you should look for, it is among the most important.",{"type":116,"content":4530},[4531],{"type":71,"content":4532},[4533,4537],{"text":4534,"type":75,"marks":4535},"Fees",[4536],{"type":111},{"text":4538,"type":75},": What fees are associated with the account? Are there monthly maintenance fees? What kinds of actions will trigger penalties?",{"type":116,"content":4540},[4541],{"type":71,"content":4542},[4543,4547],{"text":4544,"type":75,"marks":4545},"Online access",[4546],{"type":111},{"text":4548,"type":75},": Are you able to bank online? Can you make deposits or transfers via a website or mobile app, or do you have to do it all in person? Is direct deposit available?",{"type":116,"content":4550},[4551],{"type":71,"content":4552},[4553,4557],{"text":4554,"type":75,"marks":4555},"Withdrawal limits",[4556],{"type":111},{"text":4558,"type":75},": Will you be limited to six monthly withdrawals or transfers? Will you have sufficiently easy access to your money if you need it? ",{"type":103,"attrs":4560,"content":4561},{"level":105},[4562],{"text":4563,"type":75,"marks":4564},"Alternatives to a high-yield savings account ",[4565],{"type":111},{"type":71,"content":4567},[4568],{"text":4569,"type":75},"High-yield savings accounts aren’t for everyone. Here are some alternatives worth considering. ",{"type":103,"attrs":4571,"content":4572},{"level":256},[4573],{"text":4574,"type":75,"marks":4575},"A money market account",[4576],{"type":111},{"type":71,"content":4578},[4579],{"text":4580,"type":75},"A money market account (MMA) is similar to a high-yield savings account in that it offers the depositor a higher interest rate than a traditional savings account. MMAs are also lower-risk than most investment accounts.",{"type":71,"content":4582},[4583],{"text":4584,"type":75},"Unlike high-yield savings accounts, though, money market accounts usually come with ATM cards and check-writing privileges. In essence, they're like a hybrid between a checking account and a high-yield savings account. MMAs typically offer higher APYs than traditional bank accounts, but they give you easier access to your money than high-yield savings accounts do. ",{"type":103,"attrs":4586,"content":4587},{"level":256},[4588],{"text":4589,"type":75,"marks":4590},"A CD account",[4591],{"type":111},{"type":71,"content":4593},[4594],{"text":4595,"type":75},"A CD account is another type of savings account that pays interest on your deposits. When you open one, you agree to leave your money in the CD for a specific period of time — anywhere from three months to five years. During that time, you cannot withdraw your funds or transfer them elsewhere. ",{"type":71,"content":4597},[4598],{"text":4599,"type":75},"In return, the bank will pay you interest on the amount you've invested. This interest rate will be higher than what you would earn with an ordinary savings account, and likely higher than what you’d get with a high-yield savings account, as well. That’s because banks know they can count on your money during this period. They can use it as collateral for loans or investments they’ve made with their own funds. Because this is valuable to the bank, they’re willing to offer you a higher rate of return. What’s more, the interest rate on a CD is fixed. This offers more stability than the variable interest rate you’d get with a high-yield savings account. ",{"type":103,"attrs":4601,"content":4602},{"level":105},[4603],{"text":3042,"type":75,"marks":4604},[4605],{"type":111},{"type":71,"content":4607},[4608,4610,4615],{"text":4609,"type":75},"You can open a high-yield savings account at most financial institutions, including brick-and-mortar banks, online banks, and credit unions. However, it’s not always easy to see all your options in one place. That’s where ",{"text":614,"type":75,"marks":4611},[4612,4614],{"type":80,"attrs":4613},{"href":832,"uuid":83,"anchor":83,"target":85,"linktype":86},{"type":2507},{"text":4616,"type":75}," comes in. A vast online platform showcasing tons of available financial products, Navient Marketplace is a one-stop shop for all your personal finance needs. It’s also completely free to try out. You can research your options, compare and contrast banks, and pick the one that best suits your financial goals.",{"type":71,"content":4618},[4619],{"text":839,"type":75,"marks":4620},[4621],{"type":124,"attrs":4622},{"class":843},{"type":71,"content":4624},[4625],{"text":4626,"type":75,"marks":4627},"Information in this blog, including the rates advertised, are current as of 4/25/2023 and subject to change.",[4628],{"type":124,"attrs":4629},{"class":843},{"type":68,"content":4631},[4632],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798219\"}-->","\u003C!--#storyblok#{\"name\": \"Column\", \"space\": \"157494\", \"uid\": \"c286affa-ee04-4348-8508-6e9f77932903\", \"id\": 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\"651798219\"}-->",{"id":18,"lg":18,"md":18,"sm":18,"_uid":856,"cols":18,"height":18,"classes":857,"columns":4661,"justify":18,"maxWidth":874,"component":875,"colClasses":876,"rowClasses":18,"mobileClasses":877,"backgroundColor":18,"backgroundImage":4670,"containerClasses":18,"useBackgroundImage":44,"_editable":4671},[4662],{"_uid":860,"component":861,"backToTopBtn":4663,"_editable":4669},[4664],{"url":4665,"_uid":866,"icon":4666,"text":868,"color":32,"event":18,"sizing":4667,"classes":870,"rounded":44,"outlined":44,"component":871,"textColor":685,"hoverBgColor":685,"mobileClasses":18,"hoverTextColor":696,"navigationType":18,"_editable":4668},{"id":18,"url":18,"linktype":865,"fieldtype":691,"cached_url":18},{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},[],"\u003C!--#storyblok#{\"name\": \"Button\", \"space\": \"157494\", \"uid\": \"d87937d9-6d46-4da0-813d-437561563b18\", \"id\": \"651798219\"}-->","\u003C!--#storyblok#{\"name\": \"BackToTop\", \"space\": \"157494\", \"uid\": \"c390fb05-75db-44ae-af73-2bbd7c809b57\", \"id\": \"651798219\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798219\"}-->","https://www.marketplace.navient.com/blog/are-high-yield-savings-accounts-worth-it/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798219\"}-->","are-high-yield-savings-accounts-worth-it","navient_marketplace/blog/are-high-yield-savings-accounts-worth-it",150,[],"d5f83e37-5082-49ba-909a-337dc8244df7",[],{"name":4681,"created_at":4682,"published_at":4683,"updated_at":4684,"id":4685,"uuid":4686,"content":4687,"slug":5153,"full_slug":5154,"sort_by_date":83,"position":5155,"tag_list":5156,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":5157,"first_published_at":5158,"release_id":83,"lang":891,"path":83,"alternates":5159,"default_full_slug":83,"translated_slugs":83},"Using a Personal Loan to Pay Off Credit Cards","2025-04-07T18:31:55.389Z","2026-04-01T17:18:52.331Z","2026-04-01T17:18:52.356Z",651798220,"aa5cae1d-c101-4e74-adf6-f8ae01857718",{"seo":4688,"_uid":20,"body":4691,"author":1673,"category":880,"featured":44,"component":881,"canonicalTag":5151,"_editable":5152},{"_uid":15,"title":4689,"plugin":17,"og_image":18,"og_title":18,"description":4690,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"Using a Personal Loan to Pay Off Credit Cards - Navient Marketplace","Using a personal loan to pay off credit card debt could save you a significant sum in interest. Learn pros, cons, alternatives, and lenders. ",[4692,4700,5139],{"id":23,"_uid":24,"image":4693,"intro":4694,"author":1668,"classes":4695,"category":18,"featured":44,"blogTitle":4681,"component":46,"imageLink":4698,"blendImage":44,"authorRoute":1673,"publishedDate":49,"backgroundColor":50,"_editable":4699},"//a.storyblok.com/f/110029/800x533/3bc798174c/personal-loan-to-pay-off-credit-card.png","One available option to pay off credit card debt it is to get a personal loan. Here, we'll explain this concept in detail.",[4696],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":4697},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798220\"}-->","/images/personal-loan-to-pay-off-credit-card.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798220\"}-->",{"_uid":53,"bloks":4701,"classes":851,"component":852,"mobileClasses":18,"containerContent":5137,"_editable":5138},[4702],{"_uid":56,"bloks":4703,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":5136},[4704,5110],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":4705,"alignSelf":662,"component":663,"_editable":5109},[4706],{"_uid":64,"color":65,"classes":66,"content":18,"richText":4707,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":5105,"_editable":5108},{"type":68,"content":4708},[4709,4722,4726,4732,4736,4749,4753,4760,4772,4779,4783,4790,4794,4816,4823,4827,4834,4847,4854,4858,4865,4869,4876,4880,4887,4895,4902,4906,4913,4926,4933,4937,4944,4948,4952,4956,4963,4967,4980,4987,5000,5004,5011,5024,5028,5032,5039,5043,5049,5053,5059,5063,5069,5073,5077,5084,5088,5099],{"type":71,"content":4710},[4711,4713,4720],{"text":4712,"type":75},"It can be easy to let credit card debt sneak up on you, especially if you have multiple cards. In fact, about ",{"text":4714,"type":75,"marks":4715},"60% of Americans",[4716],{"type":80,"attrs":4717},{"href":4718,"uuid":83,"anchor":83,"custom":4719,"target":85,"linktype":86},"https://www.bloomberg.com/news/articles/2022-09-19/more-americans-are-stuck-with-long-term-credit-card-debt?leadSource=uverify%20wall",{},{"text":4721,"type":75}," struggle with long-term credit card debt. Once you’re in debt, soaring interest rates can make it nearly impossible to get out of it. Fortunately, there are other options that could help you consolidate your debt, simplify your monthly payments, and even get a lower interest rate on the amount you owe.",{"type":71,"content":4723},[4724],{"text":4725,"type":75},"One of the easiest options is to get a personal loan to pay off credit card debt. Taking out a personal loan moves your debt from the credit card company to a loan servicer of your choice, which may offer better repayment terms and more flexibility than your current creditors. That could help you get out of debt faster and get back to pursuing your other financial goals.",{"type":103,"attrs":4727,"content":4728},{"level":105},[4729],{"text":1747,"type":75,"marks":4730},[4731],{"type":111},{"type":71,"content":4733},[4734],{"text":4735,"type":75},"A personal loan is a loan from a financial institution that can be used for a wide variety of purposes. First, the lender issues the borrower a one-time, lump-sum cash disbursement. Then the borrower repays the loan in a series of monthly payments over a specific period of time. That period, also known as the loan term, is usually two to ten years.",{"type":71,"content":4737},[4738,4740,4747],{"text":4739,"type":75},"You can use personal loans for almost any reason, including ",{"text":4741,"type":75,"marks":4742},"home renovations",[4743],{"type":80,"attrs":4744},{"href":4745,"uuid":83,"anchor":83,"custom":4746,"target":85,"linktype":86},"https://www.earnest.com/blog/home-improvement-loan-vs-home-equity-loan/",{},{"text":4748,"type":75},", medical expenses, or moving expenses. Another option is to use your lump sum of cash as a debt consolidation loan, as in, to pay off other debts from multiple sources. However, personal loan proceeds may not be used for secondary educational expenses, including refinancing federal or private student loans.",{"type":71,"content":4750},[4751],{"text":4752,"type":75},"The issue with credit cards is that they usually carry high interest rates. That can make your debt snowball faster than you can keep up with it. To take control of your debt, you can take out a personal loan, use that loan to pay off all your existing credit card debts, and then pay off the personal loan over time. This often puts you in a better financial situation since personal loans tend to have lower interest rates than credit cards do. Personal loans often have simpler monthly payment requirements and longer terms, as well.",{"type":103,"attrs":4754,"content":4755},{"level":105},[4756],{"text":4757,"type":75,"marks":4758},"Pros and cons of using a personal loan to pay off credit card debt",[4759],{"type":111},{"type":71,"content":4761},[4762,4764,4771],{"text":4763,"type":75},"Like any type of loan or debt, there are benefits and drawbacks associated with personal loans. Here are some of the pros and cons of ",{"text":4765,"type":75,"marks":4766},"using a personal loan to pay off a credit card",[4767],{"type":80,"attrs":4768},{"href":4769,"uuid":83,"anchor":83,"custom":4770,"target":85,"linktype":86},"https://www.bankrate.com/finance/credit-cards/take-out-personal-loan-to-pay-credit-card-bill/",{},{"text":317,"type":75},{"type":103,"attrs":4773,"content":4774},{"level":256},[4775],{"text":4776,"type":75,"marks":4777},"1. Lump sum is ideal for debt consolidation",[4778],{"type":111},{"type":71,"content":4780},[4781],{"text":4782,"type":75},"One of the biggest advantages of a personal loan is that the funds are available quickly. You can use a personal loan to pay off almost any kind of existing debt. That makes personal loans ideal for debt consolidation. You can use the lump to pay off your credit card debt, then make payments to your personal loan servicer instead. That takes your debt out of your creditors’ hands and moves it to a new lender of your choice.",{"type":103,"attrs":4784,"content":4785},{"level":256},[4786],{"text":4787,"type":75,"marks":4788},"2. Lower interest rates on average ",[4789],{"type":111},{"type":71,"content":4791},[4792],{"text":4793,"type":75},"Personal loans generally carry low interest rates relative to most credit cards. While credit cards may offer generous introductory terms, rates can become very high once those introductory periods expire.",{"type":71,"content":4795},[4796,4798,4805,4807,4814],{"text":4797,"type":75},"As of July 2022, ",{"text":4799,"type":75,"marks":4800},"the average personal loan rate was 10.28%",[4801],{"type":80,"attrs":4802},{"href":4803,"uuid":83,"anchor":83,"custom":4804,"target":85,"linktype":86},"https://www.bankrate.com/loans/personal-loans/pros-cons-of-personal-loans/",{},{"text":4806,"type":75},", while the average ",{"text":4808,"type":75,"marks":4809},"credit card rate",[4810],{"type":80,"attrs":4811},{"href":4812,"uuid":83,"anchor":83,"custom":4813,"target":85,"linktype":86},"https://www.bankrate.com/finance/credit-cards/current-interest-rates/",{},{"text":4815,"type":75}," was 16.80%. With a personal loan, you can effectively transform your credit card debt into a different type of debt with a much lower interest rate. That can help you save money and put you on the road to becoming debt-free faster.",{"type":103,"attrs":4817,"content":4818},{"level":256},[4819],{"text":4820,"type":75,"marks":4821},"3. Simpler payments",[4822],{"type":111},{"type":71,"content":4824},[4825],{"text":4826,"type":75},"Using a personal loan to pay off credit card debt is one way to simplify your monthly payments. If you have three credit cards with three different lenders, it can be tough to keep track of all those due dates, minimums, and interest rates. Consolidating all your credit card debt via personal loan will leave you with just one fixed rate, one fixed monthly payment, and one loan servicer to worry about.",{"type":103,"attrs":4828,"content":4829},{"level":256},[4830],{"text":4831,"type":75,"marks":4832},"4. Lower monthly payments",[4833],{"type":111},{"type":71,"content":4835},[4836,4838,4845],{"text":4837,"type":75},"Unlike ",{"text":4839,"type":75,"marks":4840},"other short-term loans",[4841],{"type":80,"attrs":4842},{"href":4843,"uuid":83,"anchor":83,"custom":4844,"target":85,"linktype":86},"https://www.earnest.com/blog/payday-loans-vs-personal-loans/",{},{"text":4846,"type":75},", personal loans tend to have lower interest rates and longer terms, which ensure more manageable monthly payments. Terms for personal loans range from two to ten years, depending on the lender.",{"type":103,"attrs":4848,"content":4849},{"level":256},[4850],{"text":4851,"type":75,"marks":4852},"5. Better alternative to a balance-transfer card",[4853],{"type":111},{"type":71,"content":4855},[4856],{"text":4857,"type":75},"Some people use balance-transfer cards to restructure their debt. A balance transfer is the process of taking out a new credit card and moving your existing credit-card balances to that new card. It’s effectively a type of loan consolidation, but it’s often more expensive in the long run than a personal loan. That’s because credit card issuers typically charge a fee based on the balance carried over. Plus, once the new card’s introductory period expires, you may be left with a higher interest rate than you had in the first place.",{"type":103,"attrs":4859,"content":4860},{"level":105},[4861],{"text":4862,"type":75,"marks":4863},"The disadvantages of a personal loan",[4864],{"type":111},{"type":71,"content":4866},[4867],{"text":4868,"type":75},"Personal loans do have some disadvantages, and they may not always make sense for your financial situation. Here are some things to consider before you apply for a personal loan.",{"type":103,"attrs":4870,"content":4871},{"level":256},[4872],{"text":4873,"type":75,"marks":4874},"1. You’ll take on additional debt",[4875],{"type":111},{"type":71,"content":4877},[4878],{"text":4879,"type":75},"Taking on more debt is only a good idea if you can be proactive about getting out of that debt. The old adage, “robbing Peter to pay Paul,” rings true with any sort of debt-consolidation tactic. If you take out a personal loan and pay off your credit card debt, then misuse credit cards again, you could find yourself in even more debt than you started with. If you can afford it, it’s often better to increase your monthly payment and aggressively pay down your debt than it is to take out a new loan.",{"type":103,"attrs":4881,"content":4882},{"level":256},[4883],{"text":4884,"type":75,"marks":4885},"2. It’s hard on borrowers with bad credit scores",[4886],{"type":111},{"type":71,"content":4888},[4889,4891,4892,4893],{"text":4890,"type":75},"When you apply for a personal loan, the lending institution will pull a credit report to determine your creditworthiness. They’ll then offer you an interest rate based on your financial situation and credit history. If you are already in trouble with delinquent credit card payments, or have bad credit for other reasons, you may not like your interest-rate offer. Lenders consider borrowers with poor credit a payback risk, which means they can’t afford to offer those borrowers a low interest rate. ",{"type":1535},{"type":1535},{"text":4894,"type":75},"High interest rates aren’t the only reason to avoid taking out a personal loan if you have bad credit. If you already struggle to pay off your credit cards on time, you may not have the tools you need to manage paying off a new loan. (Instead, check out the alternatives to personal loans listed below.)",{"type":103,"attrs":4896,"content":4897},{"level":256},[4898],{"text":4899,"type":75,"marks":4900},"3. There could be high fees",[4901],{"type":111},{"type":71,"content":4903},[4904],{"text":4905,"type":75},"Like many other loans, personal loans have fees associated with them. As a borrower, you can expect an origination fee to be added to your initial principal amount. (Origination fees typically cover the cost of processing the loan.) You will also incur late fees if you do not make payments on time. Late fees are usually a percentage of the loan amount, which can be very large depending on how much you borrow. Some servicers will also add prepayment penalties if you pay off the loan early.",{"type":103,"attrs":4907,"content":4908},{"level":256},[4909],{"text":4910,"type":75,"marks":4911},"4. You may have to offer collateral",[4912],{"type":111},{"type":71,"content":4914},[4915,4917,4924],{"text":4916,"type":75},"Some personal loans are ",{"text":4918,"type":75,"marks":4919},"secured loans",[4920],{"type":80,"attrs":4921},{"href":4922,"uuid":83,"anchor":83,"custom":4923,"target":85,"linktype":86},"https://www.earnest.com/blog/unsecured-vs-secured-personal-loans-101/",{},{"text":4925,"type":75},". This means they require collateral upfront. Secured loans tend to have lower interest rates than unsecured loans and better terms because the borrower is leveraging something of value in exchange for the loan. Collateral may also be required of borrowers with poor credit history to offset the risk to the lender. Types of collateral can include assets such as a car or a house. However, failure to repay the loan upon the agreed terms can result in forfeit of the leveraged asset.",{"type":103,"attrs":4927,"content":4928},{"level":105},[4929],{"text":4930,"type":75,"marks":4931},"Alternatives to using a personal loan to pay off credit cards",[4932],{"type":111},{"type":71,"content":4934},[4935],{"text":4936,"type":75},"If using a personal loan to pay off credit card debt sounds like it might not be right for you, consider the following alternatives:",{"type":103,"attrs":4938,"content":4939},{"level":256},[4940],{"text":4941,"type":75,"marks":4942},"Balance transfer card",[4943],{"type":111},{"type":71,"content":4945},[4946],{"text":4947,"type":75},"When someone applies for a new credit card and transfers all their existing credit-card balances to that new card, it’s called a “balance transfer.” This can be beneficial if the new credit card has a lower rate than your existing credit cards do. For instance, some introductory offers carry a 0% interest rate, which effectively eliminates the interest on your credit card debt — at least while the introductory period remains in effect.",{"type":71,"content":4949},[4950],{"text":4951,"type":75},"This may all sound good at first glance, but balance-transfer credit cards do have their downsides. Your new credit card issuer may charge a balance-transfer fee, for example. This is typically a percentage of the balance being transferred.",{"type":71,"content":4953},[4954],{"text":4955,"type":75},"As mentioned, introductory offers can be helpful, but they don’t last forever. The interest rate on the new card could end up higher than the rate of the old card after the introductory offer expires. If this is the case, then you could find yourself worse off than you were before. It’s also important to note that many of the better introductory offers are only available to those with excellent credit.",{"type":103,"attrs":4957,"content":4958},{"level":256},[4959],{"text":4960,"type":75,"marks":4961},"Home equity loan or HELOC",[4962],{"type":111},{"type":71,"content":4964},[4965],{"text":4966,"type":75},"A home equity line of credit (HELOC), is a revolving line of credit awarded to a homeowner based on the equity they have in their home. Home equity is a measure of how much of your home you own, and what the value of that ownership is. A revolving line of credit allows you to borrow money when needed, then pay interest on the money you borrow.",{"type":71,"content":4968},[4969,4971,4978],{"text":4970,"type":75},"Since HELOCs typically have better interest rates than credit cards do, you can use a HELOC as a consolidation loan. The tricky thing is that, when you apply for a line of credit in this way, you’re putting up your home as collateral. Failure to repay the loan within the terms could mean foreclosure on the home. For this reason, HELOCs are generally ",{"text":4972,"type":75,"marks":4973},"considered too risky",[4974],{"type":80,"attrs":4975},{"href":4976,"uuid":83,"anchor":83,"custom":4977,"target":85,"linktype":86},"https://www.bankrate.com/home-equity/should-i-use-heloc-to-pay-credit-card-debt/ ",{},{"text":4979,"type":75}," to be used to pay off credit card debt. Instead, they’re usually recommended for home improvements that will add greater value to your home.",{"type":103,"attrs":4981,"content":4982},{"level":256},[4983],{"text":4984,"type":75,"marks":4985},"Debt settlement",[4986],{"type":111},{"type":71,"content":4988},[4989,4991,4998],{"text":4990,"type":75},"There may be some scenarios in which you cannot pay down your credit card debt and do not qualify for an option such as a personal loan. Sometimes, you can negotiate with a lender to let you pay back only a portion of the debt you owe. This process is called ",{"text":4992,"type":75,"marks":4993},"debt settlement",[4994],{"type":80,"attrs":4995},{"href":4996,"uuid":83,"anchor":83,"custom":4997,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/what-are-debt-settlementdebt-relief-services-and-should-i-use-them-en-1457/",{},{"text":4999,"type":75},". During this process, a third party negotiates the amount you’ll pay, then guarantees your creditor that you will pay that settled amount in full.",{"type":71,"content":5001},[5002],{"text":5003,"type":75},"Debt settlement might sound appealing, but it can sometimes cause more harm than good. If a financial institution does agree to settle, you could end up with hefty fees from the third-party negotiator. Debt settlement can also negatively impact your credit score, which can take years to rebuild.",{"type":103,"attrs":5005,"content":5006},{"level":256},[5007],{"text":5008,"type":75,"marks":5009},"Debt avalanche or snowball method",[5010],{"type":111},{"type":71,"content":5012},[5013,5015,5022],{"text":5014,"type":75},"If you don’t qualify for a personal loan, you can pay off your credit cards the old-fashioned way with one of these two classic ",{"text":5016,"type":75,"marks":5017},"debt repayment strategies",[5018],{"type":80,"attrs":5019},{"href":5020,"uuid":83,"anchor":83,"custom":5021,"target":85,"linktype":86},"https://www.wellsfargo.com/goals-credit/smarter-credit/manage-your-debt/snowball-vs-avalanche-paydown/",{},{"text":5023,"type":75},": “Debt avalanche” or “debt snowball.”",{"type":71,"content":5025},[5026],{"text":5027,"type":75},"With the debt avalanche method, you continue to make minimum payments on all your outstanding debts while prioritizing paying off your highest interest-rate balances first. The debt avalanche method is the best way to pay off your debt while saving the most money on interest fees.",{"type":71,"content":5029},[5030],{"text":5031,"type":75},"With the debt snowball method, you continue to make the minimum payments on all your debts, but you prioritize paying off your smaller balances first. The debt snowball method will help settle your overall debt amount faster. By paying off loans when you can, you will ultimately reduce the debt you owe in total.",{"type":103,"attrs":5033,"content":5034},{"level":105},[5035],{"text":5036,"type":75,"marks":5037},"Where to get a personal loan to pay off credit card debt",[5038],{"type":111},{"type":71,"content":5040},[5041],{"text":5042,"type":75},"Many different financial institutions offer personal loans.  Each has benefits and drawbacks, so be sure to analyze your options before you move forward.",{"type":103,"attrs":5044,"content":5045},{"level":256},[5046],{"text":2270,"type":75,"marks":5047},[5048],{"type":111},{"type":71,"content":5050},[5051],{"text":5052,"type":75},"Obtaining a personal loan from a bank is one of the more traditional options. If you already hold a savings or checking account with the bank, this may be a good choice for you. That’s because bank members may receive more favorable rates, higher loan amounts, and faster application options than non-members. Banks typically require good credit to issue a personal loan, especially if you are not a member already. You’ll likely need to visit the bank in person to complete this process.",{"type":103,"attrs":5054,"content":5055},{"level":256},[5056],{"text":2257,"type":75,"marks":5057},[5058],{"type":111},{"type":71,"content":5060},[5061],{"text":5062,"type":75},"You can also take out a personal loan through a credit union. Because credit unions are member-owned, they often carry lower loan rates and fees, which could save you money over the life of the loan. Credit unions also tend to be more generous toward individuals with fair to bad credit. To apply for a loan, you’ll need to become a member, which is often easy and inexpensive to do.",{"type":103,"attrs":5064,"content":5065},{"level":256},[5066],{"text":2245,"type":75,"marks":5067},[5068],{"type":111},{"type":71,"content":5070},[5071],{"text":5072,"type":75},"One of the fastest ways to obtain a personal loan is through an online lender. Online lenders have the ability to approve and disburse your loan within a day or two. You can complete the entire loan application process online, and the funds go directly to your bank account.",{"type":71,"content":5074},[5075],{"text":5076,"type":75},"The downside to online lending is that borrowers rarely have an existing relationship with the institution. That means those with poor credit could receive higher rates than they might get from a bank or credit union where they’re already a member.",{"type":103,"attrs":5078,"content":5079},{"level":105},[5080],{"text":5081,"type":75,"marks":5082},"Find the best personal loan with Navient Marketplace",[5083],{"type":111},{"type":71,"content":5085},[5086],{"text":5087,"type":75},"Personal loans are a fast, simple way to consolidate credit card debt. They typically come with longer terms and lower interest rates than credit cards. That makes them a great way to lower your monthly payment, simplify your debt obligations, and get out of debt faster.",{"type":71,"content":5089},[5090,5092,5097],{"text":5091,"type":75},"If you’ve decided a personal loan is right for you, it’s time to find a lender. Start your search at ",{"text":614,"type":75,"marks":5093},[5094],{"type":80,"attrs":5095},{"href":832,"uuid":83,"anchor":83,"custom":5096,"target":85,"linktype":86},{},{"text":5098,"type":75},", an online platform designed to take the overwhelm out of the loan application process by organizing all your options in one place. Shop the marketplace today to find the best option for your personal finance needs.",{"type":71,"content":5100},[5101],{"text":839,"type":75,"marks":5102},[5103],{"type":124,"attrs":5104},{"class":843},{"type":68,"content":5106},[5107],{"type":71},"\u003C!--#storyblok#{\"name\": \"Typography\", \"space\": \"157494\", \"uid\": \"a64c4df0-154e-4c12-b867-678d292709f4\", \"id\": \"651798220\"}-->","\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\": \"651798220\"}-->",{"id":83,"alt":83,"name":18,"focus":83,"title":83,"filename":18,"copyright":83,"fieldtype":694},"\u003C!--#storyblok#{\"name\": \"Grid\", \"space\": \"157494\", \"uid\": \"33d3a06b-b58c-487e-92e7-fc588a9c1c78\", \"id\": \"651798220\"}-->","https://www.marketplace.navient.com/blog/personal-loan-to-pay-off-credit-card/","\u003C!--#storyblok#{\"name\": \"BlogPost\", \"space\": \"157494\", \"uid\": \"24614723-3c23-4d4f-990b-c49a1b45edce\", \"id\": \"651798220\"}-->","personal-loan-to-pay-off-credit-card","navient_marketplace/blog/personal-loan-to-pay-off-credit-card",160,[],"67346c84-3ad3-45f6-8207-e8a3740db1e0","2023-02-28T18:40:15.684Z",[],{"name":5161,"created_at":5162,"published_at":5163,"updated_at":5164,"id":5165,"uuid":5166,"content":5167,"slug":5820,"full_slug":5821,"sort_by_date":83,"position":5822,"tag_list":5823,"is_startpage":44,"parent_id":888,"meta_data":83,"group_id":5824,"first_published_at":5825,"release_id":83,"lang":891,"path":83,"alternates":5826,"default_full_slug":83,"translated_slugs":83},"What to Know About Personal Loans","2025-04-07T18:31:56.911Z","2026-04-01T17:19:24.240Z","2026-04-01T17:19:24.263Z",651798221,"df4f1cf3-de57-4fb7-9e14-323f52f8cdb7",{"seo":5168,"_uid":20,"body":5171,"author":1673,"category":880,"featured":44,"component":881,"canonicalTag":5818,"_editable":5819},{"_uid":15,"title":5169,"plugin":17,"og_image":18,"og_title":18,"description":5170,"twitter_image":18,"twitter_title":18,"og_description":18,"twitter_description":18},"What to Know About Personal Loans - Navient Marketplace","What to know about personal loans: They're flexible, lump-sum, and good for debt consolidation. But they may not be right for you. Get the details here. ",[5172,5180,5806],{"id":23,"_uid":24,"image":5173,"intro":5174,"author":1668,"classes":5175,"category":18,"featured":44,"blogTitle":5161,"component":46,"imageLink":5178,"blendImage":44,"authorRoute":1673,"publishedDate":49,"backgroundColor":50,"_editable":5179},"//a.storyblok.com/f/110029/800x532/2e35990a35/what-to-know-about-personal-loans.png","In this guide, we’ll discuss everything you need to know about personal loans, including where to get one and alternatives.",[5176],{"_uid":30,"component":31,"titleColor":32,"dateClasses":33,"titleClasses":34,"authorClasses":35,"subtitleColor":36,"subtitleClasses":37,"dateMobileClasses":38,"titleMobileClasses":39,"authorMobileClasses":40,"featuredMobileClasses":41,"subtitleMobileClasses":42,"_editable":5177},"\u003C!--#storyblok#{\"name\": \"BlogHeroStyle\", \"space\": \"157494\", \"uid\": \"6bc0d925-925b-40e2-8cb5-ac30d0086187\", \"id\": \"651798221\"}-->","/images/what-to-know-about-personal-loans.png","\u003C!--#storyblok#{\"name\": \"BlogHero\", \"space\": \"157494\", \"uid\": \"02557530-adb9-49fb-9319-277497a70cb8\", \"id\": \"651798221\"}-->",{"_uid":53,"bloks":5181,"classes":851,"component":852,"mobileClasses":18,"containerContent":5804,"_editable":5805},[5182],{"_uid":56,"bloks":5183,"classes":18,"justify":662,"component":849,"mobileClasses":18,"_editable":5803},[5184,5777],{"lg":59,"md":59,"sm":60,"_uid":61,"cols":60,"bloks":5185,"alignSelf":662,"component":663,"_editable":5776},[5186],{"_uid":64,"color":65,"classes":66,"content":18,"richText":5187,"component":655,"mobileClasses":656,"enableRichText":657,"richTextMobile":5772,"_editable":5775},{"type":68,"content":5188},[5189,5193,5197,5204,5248,5255,5259,5263,5267,5279,5286,5290,5336,5343,5347,5354,5358,5365,5369,5376,5389,5396,5417,5424,5428,5435,5439,5446,5458,5465,5469,5476,5480,5484,5491,5495,5508,5528,5535,5539,5546,5559,5566,5579,5586,5590,5597,5601,5608,5612,5619,5623,5630,5634,5638,5645,5653,5657,5664,5668,5674,5678,5682,5688,5692,5696,5700,5704,5711,5715,5719,5726,5730,5743,5749,5753,5765],{"type":71,"content":5190},[5191],{"text":5192,"type":75},"Personal loans are a versatile source of funding that can be used for almost anything. They’re a popular solution for everything from funding big home improvement projects to covering unexpected expenses. They’re also popular to use as a debt consolidation loan, which can help you lower your interest rates and get out of debt faster.",{"type":71,"content":5194},[5195],{"text":5196,"type":75},"Any time you take out a loan, it’s important to research your options and determine whether or not it’s the right fit for your financial situation. In this article, we’ll discuss everything you need to know about personal loans, including how personal loans work, where you can get one, and what alternatives to consider.",{"type":103,"attrs":5198,"content":5199},{"level":105},[5200],{"text":5201,"type":75,"marks":5202},"What to know about personal loans: key takeaways",[5203],{"type":111},{"type":113,"content":5205},[5206,5215,5224,5233,5242],{"type":116,"content":5207},[5208],{"type":71,"content":5209},[5210],{"text":5211,"type":75,"marks":5212},"A personal loan is a lump sum of money that can be used for almost any purpose.",[5213],{"type":124,"attrs":5214},{"class":126},{"type":116,"content":5216},[5217],{"type":71,"content":5218},[5219],{"text":5220,"type":75,"marks":5221},"Individuals with high credit scores and low existing debt will likely get the best rates.",[5222],{"type":124,"attrs":5223},{"class":126},{"type":116,"content":5225},[5226],{"type":71,"content":5227},[5228],{"text":5229,"type":75,"marks":5230},"Borrowers can use personal loans to consolidate their existing credit card debt into one monthly loan payment.",[5231],{"type":124,"attrs":5232},{"class":126},{"type":116,"content":5234},[5235],{"type":71,"content":5236},[5237],{"text":5238,"type":75,"marks":5239},"Banks, credit unions, and online lenders are a few of the most popular sources of personal loans.",[5240],{"type":124,"attrs":5241},{"class":126},{"type":116,"content":5243},[5244],{"type":71,"content":5245},[5246],{"text":5247,"type":75},"Personal loans are suited for debt consolidation, critical expenses, and purchases that will help you build equity. They’re not recommended for everyday or non-essential expenditures.",{"type":103,"attrs":5249,"content":5250},{"level":105},[5251],{"text":5252,"type":75,"marks":5253},"What are personal loans and how do they work?",[5254],{"type":111},{"type":71,"content":5256},[5257],{"text":5258,"type":75},"A personal loan is a type of installment loan that can be used for a wide variety of purposes. The money is handed over in a lump sum, leaving the borrower to do almost anything they want with it. Some of the most popular uses for personal loans include debt consolidation, home repairs, and medical expenses. However, loan proceeds may not be used for postsecondary educational expenses, including refinancing federal or private student loans.",{"type":71,"content":5260},[5261],{"text":5262,"type":75},"So, how exactly do personal loans work?",{"type":71,"content":5264},[5265],{"text":5266,"type":75},"First, the borrower submits a loan application to a lender, like a bank or credit union. The lender then checks the borrower’s credit score, debt history, and other markers of creditworthiness. If the borrower passes the credit check, the lender will then hand over a set amount of money, which must be paid back over a fixed period of time with interest.",{"type":71,"content":5268},[5269,5271,5277],{"text":5270,"type":75},"The interest rates on personal loans are often lower than you’d find on other types of short-term debt, like credit cards or ",{"text":5272,"type":75,"marks":5273},"payday loans",[5274],{"type":80,"attrs":5275},{"href":4843,"uuid":83,"anchor":83,"custom":5276,"target":85,"linktype":86},{},{"text":5278,"type":75},". That said, personal loan interest rates do vary depending on the type of loan and the creditworthiness of the borrower. ",{"type":103,"attrs":5280,"content":5281},{"level":105},[5282],{"text":5283,"type":75,"marks":5284},"The different types of personal loans available",[5285],{"type":111},{"type":71,"content":5287},[5288],{"text":5289,"type":75},"There are a few different types of personal loans available, each with its own benefits and drawbacks. Let’s take a look at the three most common types of personal loans: secured, unsecured, and peer-to-peer.",{"type":113,"content":5291},[5292,5303,5323],{"type":116,"content":5293},[5294],{"type":71,"content":5295},[5296,5301],{"text":196,"type":75,"marks":5297},[5298],{"type":80,"attrs":5299},{"href":4922,"uuid":83,"anchor":83,"custom":5300,"target":85,"linktype":86},{},{"text":5302,"type":75}," are backed by collateral, such as a home or car. If the borrower defaults on the loan, the lender can seize the collateral to recover their money. This gives the lender an extra level of reassurance that they’ll be able to recoup their investment. For that reason, secured personal loans tend to have lower interest rates than unsecured personal loans.",{"type":116,"content":5304},[5305],{"type":71,"content":5306},[5307,5313,5315,5322],{"text":186,"type":75,"marks":5308},[5309],{"type":80,"attrs":5310},{"href":5311,"uuid":83,"anchor":83,"custom":5312,"target":85,"linktype":86},"https://www.cnbc.com/select/secured-loans-vs-unsecured-loans/",{},{"text":5314,"type":75}," do not require any collateral. So, if the borrower defaults, the lender has no way to recoup their money except through legal action. For that reason,  lenders face more risk with unsecured loans, which is why these types of loans usually come with higher interest rates. They are typically given to borrowers with ",{"text":5316,"type":75,"marks":5317},"good credit scores",[5318],{"type":80,"attrs":5319},{"href":5320,"uuid":83,"anchor":83,"custom":5321,"target":85,"linktype":86},"https://www.earnest.com/blog/personal-financial-health/",{},{"text":317,"type":75},{"type":116,"content":5324},[5325],{"type":71,"content":5326},[5327,5334],{"text":5328,"type":75,"marks":5329},"Peer-to-peer (P2P)",[5330],{"type":80,"attrs":5331},{"href":5332,"uuid":83,"anchor":83,"custom":5333,"target":85,"linktype":86},"https://www.investopedia.com/terms/p/peer-to-peer-lending.asp",{},{"text":5335,"type":75}," lending describes a newer type of loan setup that connects borrowers and lenders directly without using a bank or credit union as an intermediary. This type of loan typically comes with lower interest rates than other types of personal loans since there’s no middleman.",{"type":103,"attrs":5337,"content":5338},{"level":105},[5339],{"text":5340,"type":75,"marks":5341},"The benefits of personal loans",[5342],{"type":111},{"type":71,"content":5344},[5345],{"text":5346,"type":75},"There are a number of benefits to taking out a personal loan. Here are a few of their best qualities:",{"type":103,"attrs":5348,"content":5349},{"level":256},[5350],{"text":5351,"type":75,"marks":5352},"Flexible",[5353],{"type":111},{"type":71,"content":5355},[5356],{"text":5357,"type":75},"Personal loans offer borrowers more flexibility than other types of loans. This is because personal loans can be used for almost any purpose, whereas other types of loans are typically tied to something specific, such as purchasing a car or a home. Need to use part of the loan to pay off some debt, and the rest to finance a home repair? With a personal loan, that’s no problem",{"type":103,"attrs":5359,"content":5360},{"level":256},[5361],{"text":5362,"type":75,"marks":5363},"Disbursed in one lump sum",[5364],{"type":111},{"type":71,"content":5366},[5367],{"text":5368,"type":75},"Most personal loans are disbursed in a lump sum. This means you receive the entire amount of the loan at once, rather than receiving it in installments. When you have the money all at once, you’re free to use the whole loan immediately (to pay off a high-interest credit card in its entirety, for example), and it’s easier to stay organized since everyone involved knows exactly how much money needs to be paid back and when. ",{"type":103,"attrs":5370,"content":5371},{"level":256},[5372],{"text":5373,"type":75,"marks":5374},"Good for refinancing high-interest debt",[5375],{"type":111},{"type":71,"content":5377},[5378,5380,5387],{"text":5379,"type":75},"Personal loans are a good option for ",{"text":5381,"type":75,"marks":5382},"refinancing high-interest debt",[5383],{"type":80,"attrs":5384},{"href":5385,"uuid":83,"anchor":83,"custom":5386,"target":85,"linktype":86},"https://www.earnest.com/blog/refinance-credit-card-debt/",{},{"text":5388,"type":75},". When you have multiple debts with different interest rates, it can be difficult to keep track of what you’re paying and how much interest you’re accumulating. A personal loan lets you effectively transfer all those debts to a single new loan. You’re left with a single bill and a single fixed interest rate to keep track of. In addition, personal loans usually have lower interest rates than credit cards. Refinancing your debt in this way can therefore save you money over the life of the loan by drastically reducing your total interest charges.",{"type":103,"attrs":5390,"content":5391},{"level":256},[5392],{"text":5393,"type":75,"marks":5394},"Lower Risk",[5395],{"type":111},{"type":71,"content":5397},[5398,5400,5406,5408,5415],{"text":5399,"type":75},"Unsecured personal loans are less risky for borrowers than many other types of loans. Take secured ",{"text":5401,"type":75,"marks":5402},"home equity loans",[5403],{"type":80,"attrs":5404},{"href":4745,"uuid":83,"anchor":83,"custom":5405,"target":85,"linktype":86},{},{"text":5407,"type":75},", for example. If you want to take out a loan to ",{"text":5409,"type":75,"marks":5410},"consolidate your high-interest debt",[5411],{"type":80,"attrs":5412},{"href":5413,"uuid":83,"anchor":83,"custom":5414,"target":85,"linktype":86},"https://www.earnest.com/blog/what-is-debt-consolidation/",{},{"text":5416,"type":75}," but don’t have much equity in your home yet, you could take out a personal loan instead. This would give you the funds you need without putting your home at risk.",{"type":103,"attrs":5418,"content":5419},{"level":105},[5420],{"text":5421,"type":75,"marks":5422},"How to get a personal loan",[5423],{"type":111},{"type":71,"content":5425},[5426],{"text":5427,"type":75},"There are a number of ways to get a personal loan, but the most common way is through a bank, online lender, or a credit union (a non-profit, community-based financial institution). Here’s what the process looks like:",{"type":103,"attrs":5429,"content":5430},{"level":256},[5431],{"text":5432,"type":75,"marks":5433},"1. Look for banks or credit unions that offer personal loans",[5434],{"type":111},{"type":71,"content":5436},[5437],{"text":5438,"type":75},"If you’ve decided a personal loan is for you, there are a few different places you can start your search. Which is best for you will depend on your situation.",{"type":103,"attrs":5440,"content":5441},{"level":335},[5442],{"text":5443,"type":75,"marks":5444},"A bank where you already have an account",[5445],{"type":111},{"type":71,"content":5447},[5448,5450,5457],{"text":5449,"type":75},"A great place to look for a personal loan is at an institution where you already have a bank account. This existing relationship may help you down the line when lenders want to know more about your financial history. Big banks tend to offer lower annual percentage rates (APRs) and higher loan amounts to individuals in good standing with them, but are less likely to offer a loan to someone ",{"text":5451,"type":75,"marks":5452},"with bad credit",[5453],{"type":80,"attrs":5454},{"href":5455,"uuid":83,"anchor":83,"custom":5456,"target":85,"linktype":86},"https://www.earnest.com/blog/build-credit-in-6-easy-smart-steps/",{},{"text":317,"type":75},{"type":103,"attrs":5459,"content":5460},{"level":335},[5461],{"text":5462,"type":75,"marks":5463},"A credit union if your credit score isn’t exceptional",[5464],{"type":111},{"type":71,"content":5466},[5467],{"text":5468,"type":75},"Credit unions tend to be more favorable for those with low to average credit. Credit union loan officers may be willing to consider other factors beyond your credit score to help you get a loan. Because credit unions are usually local or regional, you can expect more personal service throughout the process as well. The only catch is that to apply for a loan through a credit union, you must be a member, which usually requires a small fee.",{"type":103,"attrs":5470,"content":5471},{"level":335},[5472],{"text":5473,"type":75,"marks":5474},"An online lender if you’re looking for speed and convenience",[5475],{"type":111},{"type":71,"content":5477},[5478],{"text":5479,"type":75},"Another option is using an online lender. Online lenders allow you to quickly shop around and review multiple loan offers from the comfort of your home. Because you can compare so many options at once, it’s easier to figure out if you are getting a good rate.",{"type":71,"content":5481},[5482],{"text":5483,"type":75},"A potential downside to having an online lender is that you will need to use email, phone, or online chat to resolve any issues. With a bank or credit union, you can address questions by walking in and getting more personal service, which some borrowers prefer.",{"type":103,"attrs":5485,"content":5486},{"level":256},[5487],{"text":5488,"type":75,"marks":5489},"2. Compare interest rates between different financial institutions",[5490],{"type":111},{"type":71,"content":5492},[5493],{"text":5494,"type":75},"Each financial institution will likely offer you a different interest rate. Make sure to compare rates before you decide which one to go with.",{"type":71,"content":5496},[5497,5499,5506],{"text":5498,"type":75},"Each offer will be based on factors like your credit score, debt-to-income ratio, and credit history. Lenders will review this information by pulling your credit report. ",{"text":5500,"type":75,"marks":5501},"According to Experian",[5502],{"type":80,"attrs":5503},{"href":5504,"uuid":83,"anchor":83,"custom":5505,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/",{},{"text":5507,"type":75},", one of the “Big Three” credit bureaus, a “good” credit score is anything above 700, and an “excellent” score is 800 or more. The amount and term length of the loan will also affect the rates your lender can offer you. If you are in good financial standing and can commit to a shorter loan term, you will likely receive the best rates a lender can offer.",{"type":71,"content":5509},[5510,5512,5519,5521,5527],{"text":5511,"type":75},"While different borrowers will qualify for different interest rates, a “",{"text":5513,"type":75,"marks":5514},"good interest rate",[5515],{"type":80,"attrs":5516},{"href":5517,"uuid":83,"anchor":83,"custom":5518,"target":85,"linktype":86},"https://www.forbes.com/advisor/personal-loans/personal-loan-rates/#what_are_current_personal_loan_rates_section",{},{"text":5520,"type":75},"” is typically defined as one that falls below the national average. In August 2022, the national average interest rate for a personal loan was ",{"text":5522,"type":75,"marks":5523},"about 10%",[5524],{"type":80,"attrs":5525},{"href":275,"uuid":83,"anchor":83,"custom":5526,"target":85,"linktype":86},{},{"text":317,"type":75},{"type":103,"attrs":5529,"content":5530},{"level":256},[5531],{"text":5532,"type":75,"marks":5533},"3. Apply for a personal loan with the lender of your choice",[5534],{"type":111},{"type":71,"content":5536},[5537],{"text":5538,"type":75},"When you’ve decided on a lender, your next step is to fill out a loan application. During the application process, you will need to provide proof of identity, such as a driver’s license or passport, as well as your social security number. The lender will also want to verify your employer and income, so they may request a pay stub or W2 form, as well. Rental agreements or mortgage statements may be required to provide proof of address.",{"type":103,"attrs":5540,"content":5541},{"level":256},[5542],{"text":5543,"type":75,"marks":5544},"4. Wait for approval from your financial institution",[5545],{"type":111},{"type":71,"content":5547},[5548,5550,5557],{"text":5549,"type":75},"Once you submit your application, your lender will review it and let you know if you’ve been approved for a loan. ",{"text":5551,"type":75,"marks":5552},"Approval for a personal loan",[5553],{"type":80,"attrs":5554},{"href":5555,"uuid":83,"anchor":83,"custom":5556,"target":85,"linktype":86},"https://www.cusocal.org/how-long-does-it-take-to-get-a-personal-loan",{},{"text":5558,"type":75}," can take one to seven days. This can sometimes take longer if there’s a delay with your credit check or a backup at your bank or credit union. Applications tend to be approved more quickly with online lenders than with brick-and-mortar institutions.",{"type":103,"attrs":5560,"content":5561},{"level":256},[5562],{"text":5563,"type":75,"marks":5564},"5. Sign the agreement and receive your funds",[5565],{"type":111},{"type":71,"content":5567},[5568,5570,5577],{"text":5569,"type":75},"If you’re approved for a loan, the lender will send you a document outlining the terms of the loan agreement. Be sure to carefully read the fine print, as this document will include everything you’re about to commit to, including the total amount of the loan, the repayment terms, the loan APR, and the monthly installment amounts and deadlines. ",{"text":5571,"type":75,"marks":5572},"After you sign this agreement",[5573],{"type":80,"attrs":5574},{"href":5575,"uuid":83,"anchor":83,"custom":5576,"target":85,"linktype":86},"https://www.experian.com/blogs/ask-experian/how-long-does-it-take-to-get-a-personal-loan/",{},{"text":5578,"type":75},", the funds will be disbursed to you. At that point, you cannot change your mind and go back on the agreement.",{"type":103,"attrs":5580,"content":5581},{"level":256},[5582],{"text":5583,"type":75,"marks":5584},"6. Continue repaying the loan until your debts are paid off",[5585],{"type":111},{"type":71,"content":5587},[5588],{"text":5589,"type":75},"It’s important to make your loan payments on time. Lapses in payment will likely result in late fees. Failure to repay the loan will also carry serious penalties. You could be subject to more fees, damage to your credit score, collections calls, or even legal ramifications.",{"type":103,"attrs":5591,"content":5592},{"level":105},[5593],{"text":5594,"type":75,"marks":5595},"Things to consider before taking out a personal loan",[5596],{"type":111},{"type":71,"content":5598},[5599],{"text":5600,"type":75},"There are a number of things you need to consider before taking out a personal loan. Here are a few of the most important.",{"type":103,"attrs":5602,"content":5603},{"level":256},[5604],{"text":5605,"type":75,"marks":5606},"How much do you need?",[5607],{"type":111},{"type":71,"content":5609},[5610],{"text":5611,"type":75},"Personal loans typically range from $1,000 to $50,000. That’s a big range, which means you’ll need to decide how much money you need before you apply. Do some calculations to figure out how much you’ll need to cover your expected home repair, pay off your credit card debt, or achieve another financial goal. Then, take out only what you need. This will ensure you won’t incur unnecessary interest charges, and it will keep your monthly payments within reason.",{"type":103,"attrs":5613,"content":5614},{"level":256},[5615],{"text":5616,"type":75,"marks":5617},"What is the repayment schedule?",[5618],{"type":111},{"type":71,"content":5620},[5621],{"text":5622,"type":75},"Most personal loans have a repayment schedule, or loan term, of either three or five years1. Because personal loans are a type of installment loan, you will make monthly payments based on the amount you borrowed plus interest. These payments will continue until the loan is paid back in full. Before you sign off on a loan, make sure you can afford the monthly payments and that the repayment schedule aligns with your other financial goals.",{"type":103,"attrs":5624,"content":5625},{"level":256},[5626],{"text":5627,"type":75,"marks":5628},"What are the fees?",[5629],{"type":111},{"type":71,"content":5631},[5632],{"text":5633,"type":75},"Many personal loan servicers charge origination fees, late-payment fees, or prepayment penalties. Origination fees are associated with the administration and processing costs of the loan and are typically a small percentage of the overall loan amount. Late fees are incurred if you fall behind on payments. A late fee can be a set amount or a percentage of your monthly payments, depending on your loan servicer.",{"type":71,"content":5635},[5636],{"text":5637,"type":75},"Not all loan servicers charge prepayment penalties. However, some do charge a fee if you pay off the loan prior to the end of the term. Because lenders make money on interest charges, this is their way of locking you into the total cost of the loan. If you expect to pay off your loan quickly, either select a servicer that doesn’t charge prepayment penalties, or choose a loan with a shorter term.",{"type":103,"attrs":5639,"content":5640},{"level":256},[5641],{"text":5642,"type":75,"marks":5643},"Are there better payment options for your situation?",[5644],{"type":111},{"type":71,"content":5646},[5647,5649,5650,5651],{"text":5648,"type":75},"Personal loans might not be the best choice if low-interest, purpose-made loans exist for your situation. Medical bills can often be resolved with your healthcare provider at a low cost to you. Auto loans and mortgage loans are often better options for car and home purchases, and student loans give borrowers much more flexibility and protection, making them a better option than personal loans for paying college tuition and fees. ",{"type":1535},{"type":1535},{"text":5652,"type":75},"A home equity line of credit (HELOC) could suit your needs if you are looking to do home renovations. (That said, a HELOC is a type of secured loan, which means it could put your home at risk if you fail to pay it off on time.)",{"type":71,"content":5654},[5655],{"text":5656,"type":75},"If your credit history is weak and you are looking to build credit, a credit card may be a better option for you. You can read more about alternatives to personal loans below.",{"type":103,"attrs":5658,"content":5659},{"level":105},[5660],{"text":5661,"type":75,"marks":5662},"Alternatives to personal loans",[5663],{"type":111},{"type":71,"content":5665},[5666],{"text":5667,"type":75},"Personal loans aren’t the best option for every situation. Here are some alternatives to consider.",{"type":103,"attrs":5669,"content":5670},{"level":256},[5671],{"text":2309,"type":75,"marks":5672},[5673],{"type":111},{"type":71,"content":5675},[5676],{"text":5677,"type":75},"A cash-out refinance is when you replace your current home loan with a new (higher) mortgage for the existing value of the home, and receive the difference in funds for the equity you’ve built. You can use the extra cash to pay off high-interest debt, make home improvements, or cover unexpected expenses.",{"type":71,"content":5679},[5680],{"text":5681,"type":75},"A cash-out refinance can be a great way to get a lower interest rate on your mortgage and free up some extra cash at the same time. It's important to remember, however, that you will be paying off the new loan over a longer period of time. So make sure you're comfortable with the monthly payments (and total interest charges) before you apply.",{"type":103,"attrs":5683,"content":5684},{"level":256},[5685],{"text":2322,"type":75,"marks":5686},[5687],{"type":111},{"type":71,"content":5689},[5690],{"text":5691,"type":75},"A home equity loan is a type of secured loan in which the borrower uses their home as collateral. It is a lump sum of cash that you receive all at once. You must repay the entire loan amount plus interest over a fixed period of time, usually 5 to 10 years.",{"type":71,"content":5693},[5694],{"text":5695,"type":75},"This type of loan is usually used to finance major expenses such as tuition, medical bills, or home improvements. Home equity loans are available in both fixed-rate and variable-rate formats, and typically have lower interest rates than unsecured loans, including most personal loans.",{"type":71,"content":5697},[5698],{"text":5699,"type":75},"The amount you can borrow with a home equity loan depends on the value of the property you plan to use as collateral. (It will also depend on your credit score.) In most cases, homeowners can borrow up to 80% of the property's value.",{"type":71,"content":5701},[5702],{"text":5703,"type":75},"The biggest downside to home equity loans is that they put your house at risk. If you default on a home equity loan, you could lose your home.",{"type":103,"attrs":5705,"content":5706},{"level":256},[5707],{"text":5708,"type":75,"marks":5709},"Home equity line of credit (HELOC)",[5710],{"type":111},{"type":71,"content":5712},[5713],{"text":5714,"type":75},"Unlike a home equity loan, which is a lump-sum loan, a home equity line of credit (HELOC), is a pool of funds that you can take out and pay back on a revolving basis. With a HELOC, you can borrow as much or as little as you need up to your approved limit, and you only pay interest on the amount you actually borrow.",{"type":71,"content":5716},[5717],{"text":5718,"type":75},"HELOCs are popular because they offer more flexibility than traditional term loans. You can borrow what you need when you need it, and there are no prepayment penalties if you want to pay off the debt early. However, since interest rates for HELOCs are always variable, they can go up over time according to national trends. If rates go up, you could be stuck paying more money than you originally expected. ",{"type":103,"attrs":5720,"content":5721},{"level":256},[5722],{"text":5723,"type":75,"marks":5724},"Payday loans",[5725],{"type":111},{"type":71,"content":5727},[5728],{"text":5729,"type":75},"A payday loan is a short-term, high-interest loan, typically due around the time you receive your next paycheck. These loans are also sometimes referred to as cash advances.",{"type":71,"content":5731},[5732,5734,5741],{"text":5733,"type":75},"Payday loans are often characterized by very high interest rates — sometimes ",{"text":5735,"type":75,"marks":5736},"up to 400%",[5737],{"type":80,"attrs":5738},{"href":5739,"uuid":83,"anchor":83,"custom":5740,"target":85,"linktype":86},"https://www.consumerfinance.gov/ask-cfpb/my-payday-lender-said-my-loan-would-cost-15-percent-but-my-loan-documents-say-the-annual-percentage-rate-apr-is-almost-400-percent-what-is-an-apr-on-a-payday-loan-and-how-should-i-use-it-en-1625/",{},{"text":5742,"type":75}," — and they are particularly harmful to borrowers who cannot afford to repay them on time. Payday loans are generally only useful to people who need a small amount of cash quickly and cannot qualify for other, more forgiving loan options because of poor credit history. For that reason, they’re typically considered a last resort.",{"type":103,"attrs":5744,"content":5745},{"level":105},[5746],{"text":816,"type":75,"marks":5747},[5748],{"type":111},{"type":71,"content":5750},[5751],{"text":5752,"type":75},"Personal loans are a versatile line of funding that can be used for almost anything. While they are not right for everyone, they can be great for borrowers that have good credit and are looking to fund a large purchase or consolidate debt.",{"type":71,"content":5754},[5755,5757,5763],{"text":5756,"type":75},"If you've decided a personal loan is right for you, your next step is to start shopping for competitive loan offers to make sure you get the best rates. One of the best ways to do this is through the Navient Marketplace. This is a unique, comprehensive database of available lenders and loan options. It’s a great tool to find out what’s out there, compare loan offers, and find the solution that best fits your financial goals. 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