Varo Bank Introduces Line of Credit Option with Fixed Pricing
Varo logo

Varo Bank Introduces Line of Credit Option with Fixed Pricing

Varo has announced the impending launch of a new borrowing option for customers.

About the feature:

This week, Varo Bank revealed its new Varo Line of Credit. With this feature, customers can get approval for a line of credit ranging from $600 to $2,000. According to the bank, this feature will have transparent fixed pricing rather than charging interest. It will also be free of any late fees.

As for how customers will gain approval for a Line of Credit, Varo says it will use proprietary underwriting technology and will also base its decision on a user’s banking history with Varo. This includes deposit frequency, on-time payments for Varo Advance, and more.

Despite being billed as a “line of credit,” Varo’s upcoming feature bears resemblance to a personal loan as well. An FAQ for the product states that customers will repay funds over the course of three to 12 months depending on the amount borrowed and will pay a one-time fee. Then, funds will be deposited into a user’s Varo account. Once approved for a Line of Credit, users won’t need to reapply. However, customers will need to fully repay previous draws before requesting a new one.

Varo Line of Credit is expected to launch this summer while a waitlist for the product is now open.

What they’re saying:

Commenting on the upcoming Line of Credit product, Varo Bank CEO Colin Walsh stated, “Varo Bank is continuing to demonstrate its commitment to helping the majority of Americans who are feeling increased fiscal pressure combat money-related stress and improve their financial lives. Varo Line of Credit is a first-of-its-kind lending product that will help people borrow at a transparent cost when life happens and they need extra cash.”

My thoughts:

On the surface, the Varo Line of Credit might sound like a good alternative to traditional credit cards or loans. Unfortunately, as Axios points out, this flat fee could work out to be a much higher APR than credit cards. For example, they note that a $2,000 one-year loan using this feature comes with a fee of $400 — which works out to a 34.6% APR if you were to calculate it in regular loan terms (whereas most would assume it’s a 20% APR since $400 is 20% of $2,000).

Setting that aside, I’m a little confused about how this Varo Line of Credit is different from the bank’s Varo Advance feature aside from the amount accessible. I suppose that’s exactly the difference, but Varo has already expanded that program, so it seems as though they could just continue that theme. Varo Super Advance, perhaps?

Overall, while I don’t think this is a great deal, I can see how it could appeal to people in a time of need. After all, even if it does end up costing a bit more, the predictability of the payment may be attractive. Of course, I’ll also need to see more details when the feature actually launches.


Kyle Burbank

Head Writer ~ Fioney
Kyle is the head writer for Fioney. He is a personal finance nerd, constantly looking for new apps and services to test and incorporate into his own financial game plan. In addition to his role at Fioney, he's written for other publications including Born2Invest, Lifehack, and Laughing Place, as well as his own site Money@30. He also creates personal finance and travel-related videos for Fioney's YouTube channel, which has garnered more than 2 million views. Currently, Kyle resides in Springfield, Missouri with his wife of 10 years. Together, they enjoy traveling (including visiting Disney Parks around the world), dining, and playing with their dog Rigby.

Other Articles by Kyle Burbank

Bilt and Blade logos on NY skyline

Bilt Announces Partnership with Blade Helicopter Service

Bilt is bringing more perks to its most loyal customers thanks to a new partnership. About the partnership: This week, Bilt Rewards revealed a collaboration with Blade. As part of this partnership, not only will Bilt members earn bonus rewards on Blade bookings but elite members will also enjoy special benefits from the helicopter taxi service. Now, Bilt Platinum elite customers will receive one complimentary Blade flight per year. This...
Ramp logo

Spend Management FinTech Ramp Raises $150 Million

The FinTech startup Ramp has revealed its latest "mega-round." About the round: This week, Ramp announced that it had raised $150 million. The Series D-2 was co-led by Khosla Ventures and Founders Fund. Additionally, new investors Sequoia Capital, Greylock, and 8VC joined existing investors Thrive Capital, General Catalyst, Sands Capital, D1 Capital Partners, Lux Capital, Iconiq Capital, Definition Capital, Contrary Capital, and others in participating in the round. To date,...
man holding a small model house

Lessons From a First-Time Home Buyer: The Worst Parts of Homeownership So Far

As you can probably imagine, making the jump from being a long-time apartment dweller to a first-time homeowner has been drastic. On the whole, the changes have been positive (which is why we chose to buy in the first place). But, of course, there are some downsides too — including some that I didn't really think about ahead of time. With that in mind, I wanted to share some of...
The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories:, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...

FedEx Announces Winners of 11th Annual 2023 Small Business Grant Contest

Nearly three months after the entry period ended, FedEx has announced the winners of its 11th annual Small Business Grant Content. This year's event saw more than $300,000 in funds going to a variety of small businesses across the nation. Last month, the company revealed 100 finalists, with that list now being narrowed down to just 10 winners. This year's grand prize winners included KindVR, The Cupcake Collection, Up In...