UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003 or

[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number    000-25621



E-LOAN, INC.



|Delaware                                                       | 77-0460084                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number)

5875 Arnold Road, Suite 100
Dublin, California   94568

(925) 241-2400







Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
    Yes  
x    No

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
    Yes  
 ̈    No

As of July 31, 2003, 60,297,504 shares of the Registrant's Common Stock,
$0.001 par value per share, were issued and outstanding.









E-LOAN, INC.
      QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED June 30, 2003
                                TABLE OF CONTENTS



|PART I.   FINANCIAL INFORMATION                                                                                       | Page No.
|--------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                      |         
|Item 1.   Interim Financial Statements
                  (unaudited):                                                 |         
|                                                                                                                      |         
|Balance Sheets as of December 31, 2002 and June 30, 2003                                                              | **      
|                                                                                                                      |         
|Statements of Operations for the
    three and six months ended June 30, 2002 and 2003                                | **      
|                                                                                                                      |         
|Statements of Cash Flows for the
    six months ended June 30, 2002 and 2003                                          | **      
|                                                                                                                      |         
|Notes to Unaudited Financial Statements                                                                               | **      
|                                                                                                                      |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | **      
|                                                                                                                      |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                  | **      
|                                                                                                                      |         
|Item 4.   Controls and Procedures                                                                                     | **      
|                                                                                                                      |         
|PART II.  OTHER INFORMATION                                                                                           |         
|                                                                                                                      |         
|Item 1.   Legal Proceedings                                                                                           | **      
|                                                                                                                      |         
|Item 2.   Changes in Securities and Use of Proceeds                                                                   | **      
|                                                                                                                      |         
|Item 3.   Defaults Upon Senior Securities                                                                             | **      
|                                                                                                                      |         
|Item 4.   Submission of Matters to a Vote of Security Holders                                                         | **      
|                                                                                                                      |         
|Item 5.   Other Information                                                                                           | **      
|                                                                                                                      |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                            | **      
|                                                                                                                      |         
|Signature                                                                                                             | **      

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PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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E-LOAN, INC.
BALANCE SHEETS
(IN THOUSANDS)

---

`December 31,  June 30,
                                                                                   2002         2003
                                                                                -----------  -----------
                                                                                             (unaudited)
ASSETS
Current assets:
    Cash and cash equivalents (includes $2,500 of restricted cash)............ $    36,321  $    43,880
    Loans held-for-sale.......................................................     393,386      301,192
    Accounts receivable, prepaids and other current assets....................      10,779       24,658
                                                                                -----------  -----------
          Total current assets................................................     440,486      369,730
Fixed assets, net.............................................................       6,262        8,576
Retained interests in auto loans - trading....................................       3,969        8,999
Deposits......................................................................       1,319           22
                                                                               $-----------  -----------
           Total assets.......................................................     452,036  $   387,327
                                                                                ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:                                                           $
    Warehouse and other lines payable.........................................     383,647  $   293,491
    Accounts payable, accrued expenses and other current liabilities..........      12,339       17,803
    Capital lease obligation, current portion.................................          10           --
    Notes payable, current portion............................................          --        4,150
                                                                                -----------  -----------
           Total current liabilities..........................................     395,996      315,444
                                                                                -----------  -----------
           Total liabilities..................................................     395,996      315,444
                                                                                -----------  -----------
Commitments and contingencies (Note 12):
Stockholders' equity:
    Preferred stock, 5,000,000 $0.001 par value shares authorized at
      December 31, 2002 and June 30, 2003; 0 shares issued and
      outstanding at December 31, 2002 and June 30, 2003......................          --           --
    Common stock, 150,000,000 $0.001 par value shares authorized at
      December 31, 2002 and June 30, 2003; 59,420,446 and
      60,831,372 shares issued and outstanding at December 31, 2002
      and June 30, 2003.......................................................          59           61
Additional paid-in capital....................................................     262,194      263,627
Accumulated deficit...........................................................    (206,213)    (191,805)
                                                                                -----------  -----------
           Total stockholders' equity.........................................      56,040       71,883
                                                                                -----------  -----------
           Total liabilities and stockholders' equity......................... $   452,036  $   387,327
                                                                                ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

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`Three Months Ended        Six Months Ended
                                                                 June 30,                  June 30,
                                                            2002         2003         2002         2003
                                                         -----------  -----------  -----------  -----------
Revenues (Note 10)..................................... $    20,986  $    45,883  $    41,752  $    81,872

Operating expenses:
    Operations (Note 11)...............................      11,327       20,521       22,179       37,524
    Sales and marketing................................       6,138       11,433       11,275       19,925
    Technology.........................................       1,240        2,294        2,669        3,980
    General and administrative.........................       1,347        2,807        2,980        4,730
                                                         -----------  -----------  -----------  -----------
           Total operating expenses....................      20,052       37,055       39,103       66,159
                                                         -----------  -----------  -----------  -----------
Income from operations.................................         934        8,828        2,649       15,713
Other income, net......................................          39          286          (18)         548
                                                         -----------  -----------  -----------  -----------
Income before taxes....................................         973        9,114        2,631       16,261
Income taxes...........................................         (29)      (1,038)         (83)      (1,853)
                                                         -----------  -----------  -----------  -----------
Net income............................................. $       944  $     8,076  $     2,548  $    14,408
                                                         ===========  ===========  ===========  ===========

Net income per share:
    Basic.............................................. $      0.02  $      0.13  $      0.05  $      0.24
                                                         ===========  ===========  ===========  ===========
    Diluted............................................ $      0.02  $      0.12  $      0.04  $      0.22
                                                         ===========  ===========  ===========  ===========

    Weighted-average shares - basic....................      58,084       60,177       56,057       59,888
                                                         ===========  ===========  ===========  ===========
    Weighted-average shares - diluted..................      59,903       66,708       60,165       65,302
                                                         ===========  ===========  ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

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`Six Months Ended
                                                                          June 30,
                                                                    2002         2003
                                                                 -----------  -----------
Cash flows from operating activities:
   Net income.................................................. $     2,548  $    14,408
   Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization of fixed assets.............       1,943        2,370
     Changes in operating assets and liabilities:
       Loans held-for-sale.....................................      73,878       92,194
       Retained interests in auto loans - trading..............          --       (5,030)
       Accounts receivable, prepaids and deposits..............      (8,066)     (12,582)
       Accounts payable, accrued expenses and
         other payables........................................        (621)       5,465
                                                                 -----------  -----------
         Net cash provided by operating activities.............      69,682       96,825
                                                                 -----------  -----------
Cash flows from investing activities:
   Acquisition of fixed assets.................................      (1,711)      (4,684)
                                                                 -----------  -----------
         Net cash used in investing activities                       (1,711)      (4,684)
                                                                 -----------  -----------
Cash flows from financing activities:
   Proceeds from issuance of common stock, net.................          36        1,434
   Proceeds from notes payable.................................          --        4,150
   Proceeds from warehouse and other lines payable.............   2,047,234    2,565,628
   Repayments of warehouse and other lines payable.............  (2,117,899)  (2,655,784)
   Payments on obligations under capital leases, net...........        (145)         (10)
                                                                 -----------  -----------
         Net cash used in financing activities.................     (70,774)     (84,582)
                                                                 -----------  -----------
Net (decrease)/increase in cash................................      (2,803)       7,559
Cash and cash equivalents, beginning of period.................      32,538       36,321
                                                                 -----------  -----------
Cash and cash equivalents, end of period....................... $    29,735  $    43,880
                                                                 ===========  ===========
Supplemental cash flow information:
   Cash paid for interest...................................... $     3,463  $     5,206
                                                                 ===========  ===========
Non-cash financing activities:
   Conversion of convertible debt into common stock............ $     5,000  $        --
                                                                 ===========  ===========`

The accompanying notes are an integral part of these financial statements.

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E-LOAN, INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS



1.	THE COMPANY

E-LOAN, Inc. (the "Company") was incorporated on August
26, 1996 and began marketing its services in June 1997. The Company is a
consumer direct lender and debt advisor, providing borrowers with home purchase
and refinance mortgage loans, home equity loans and home equity lines of credit
and auto loans. The Company operates as a single operating segment.

2.	BASIS OF PRESENTATION

Interim Financial Information (unaudited)

The accompanying financial statements as of June 30, 2002
and 2003 are unaudited. The unaudited interim financial statements have been
prepared on the same basis as the annual financial statements and, in the
opinion of management, reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the Company's financial
position, results of operations and cash flows as of June 30, 2002 and 2003.
These financial statements and notes thereto are unaudited and should be read in
conjunction with the Company's audited financial statements included in the
Company's 10-K for the year ended December 31, 2002. The results for the three
and six months ended June 30, 2003 are not necessarily indicative of the
expected results for the year ending December 31, 2003.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

Reclassification

Certain amounts in the financial statements have been
reclassified to conform to the 2003 presentation.

3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid monetary
instruments with an original maturity of three months or less from the date of
purchase, to be cash equivalents. Both cash equivalents and short term
investments are considered available-for-sale securities and are carried at
amortized cost, which approximates fair value. As more fully described in Note
8, the Company must maintain a minimum cash and cash equivalents balance of the
higher of $15 million (including Restricted Cash) or the highest amount required
by any other lender or agreement. The following summarizes cash and cash
equivalents at December 31, 2002 and June 30, 2003 (dollars in thousands):

`December 31,  June 30,
                                                    2002         2003
                                                 -----------  -----------
Cash........................................... $    33,821  $    41,380
Restricted cash................................       2,500        2,500
                                                 -----------  -----------
                                                $    36,321  $    43,880
                                                 ===========  ===========`

Derivative instruments

On January 1, 2001, the Company adopted Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative and
Hedging Activities" ("SFAS 133"), as subsequently amended by
Statement of Financial Accounting No. 138.  In accounting for its derivative
financial instruments, SFAS 133 requires an entity to recognize all derivative
assets or liabilities in the statement of financial condition and measure those
instruments at fair value.  The accounting for changes in fair value of the
derivative depends on the intended use of the derivative and the resulting
designation.  An entity that elects to apply hedge accounting is required to
establish at the inception of the hedge, the method it will use in assessing the
effectiveness of the hedging derivative and the measurement approach for
determining the ineffectiveness of the hedge.  These methods must be consistent
with the entity's approach to managing risk.  The Company is a party to rate
lock commitments to fund loans at interest rates previously agreed (locked) by
both the Company and the borrower for specified periods of time. When the
borrower locks their interest rate, the Company extends a put option to the
borrower, whereby the borrower is not obligated to enter into the loan
agreement, but the Company must honor the interest rate for the specified time
period.  Under SFAS 133 interest rate locks are derivatives.  The Company is
exposed to interest rate risk during the accumulation of interest rate lock
commitments and loans prior to sale. The Company utilizes either a best efforts
sell forward commitment or a mandatory sell forward commitment to economically
hedge the changes in fair value of the loan due to changes in market interest
rates.  Both best efforts and mandatory sell forward commitments are derivatives
under SFAS 133.  Throughout the lock period the changes in the market value of
interest rate lock commitments, best efforts and mandatory sell forward
commitments are recorded as unrealized gains and losses and are included in the
statement of operations in mortgage revenue.
Once the loan is funded the Company hedges changes
in the fair value of the loan, if not previously hedged at time of lock through
use of a best efforts sell forward agreement, with a forward delivery commitment
at a specified price.

The Company's management has made complex judgments in their
application of SFAS 133.  The judgments include the identification of hedging
instruments, hedged items, nature of the risk being hedged, and how the hedging
instrument's effectiveness will be assessed.  The Company designates forward
delivery commitments, where the company intends to deliver the underlying loan
into the commitment, as a fair value SFAS 133 hedge at the commitment date.   In
addition, the Company designates all non-mandatory forward sale agreements as
fair value SFAS 133 hedges for underlying loans at funding date.  The Company
does not designate mandatory sell forward agreements as SFAS 133 hedges but does
utilize them to economically hedge the changes in fair value of rate lock
commitments with borrowers for which a non-mandatory forward sale agreement has
not been obtained.  The Company did not have a material gain or loss
representing the amount of hedge ineffectiveness related to non-mandatory
forward sale agreements or delivery commitments during the three and six months
ended June 30, 2003.  The effect on the Company's income statement from applying
SFAS 133 was a $2.4 million loss and a $7.4 million loss, included in mortgage
revenues for the three and six months ended June 30, 2003, respectively.

Sale of auto loans to qualified special purpose entity

On June 17, 2002, the Company entered into an arrangement
to sell auto loan receivables to a qualified special purpose entity ("QSPE"), E-Loan Auto
Fund One, LLC ("E-Loan Auto"). These transactions involve
the Company surrendering control over these assets to assure that the sold
assets have been isolated from the Company and its creditors. As E-Loan Auto has
met the appropriate tests to be considered a QSPE, the assets and liabilities of
E-Loan Auto are not consolidated in the financial statements of the Company. E-Loan Auto
has obtained a secured borrowing facility from Merrill Lynch Bank USA
to finance all purchases of loans from the Company. The Company recognizes a
gain on the sale of auto loan receivables to E-Loan Auto in the period the sale
occurs, which represents the difference between the sale proceeds to the Company
and the Company's net carrying value of the receivables. Included in the
proceeds received by the Company from the sale of loans is a beneficial interest
related to loans owned by the QSPE, which is reflected on the Company's balance
sheet as a retained interest asset. These retained interest assets are recorded
on the balance sheet at fair value as trading assets, and are marked to market
at each subsequent reporting period. In order to determine the fair value
management estimates future excess cash flows to be received by the Company over
the life of the loans. The Company makes various assumptions in order to
determine the fair value of the estimated future excess cash flows to be
generated by the auto loans sold to the QSPE. The most significant assumptions
are the cumulative credit losses to be incurred on the pool of auto loan
receivables sold, prepayment rates of the auto loans and the rate at which the
estimated future excess cash flows are discounted. The assumptions used
represent the Company's best estimates, and the use of different assumptions
could produce different financial results. The Company will continue to monitor
and may update its assumptions over time.

Net Income Per Share

The Company computes net income per share in
accordance with SFAS No. 128, Earnings per Share. Under the provisions of
SFAS No. 128 basic net income per share is computed by dividing the net income
available to common stockholders for the period by the weighted average number
of common shares outstanding during the period. Diluted net income per share is
computed by dividing the net income available to common stockholders for the
period by the weighted average number of common and potential dilutive shares
outstanding during the period, to the extent such potential dilutive shares are
dilutive. Potential dilutive shares are composed of incremental common shares
issuable upon the exercise of stock options and warrants, and the conversion of
debt into common stock.

`Three Months Ended        Six Months Ended
                                                          June 30,                  June 30,
                                                    2002         2003         2002         2003
                                                 -----------  -----------  -----------  -----------
                                                     (In Thousands)            (In Thousands)
  Numerator:
    Net income................................. $       944  $     8,076  $     2,548  $    14,408
    Interest expense from convertible note.....           3           --          152           --
                                                 -----------  -----------  -----------  -----------
    Net income assuming dilution............... $       947  $     8,076  $     2,700  $    14,408
                                                 ===========  ===========  ===========  ===========
  Denominator:
    Weighted average shares, basic.............      58,084       60,177       56,057       59,888
    Effect of potentially dilutive securities:
      Convertible note.........................         839           --        2,778           --
      Warrants.................................          37          767           60          669
      Employee Stock Option Plan...............         943        5,764        1,270        4,745
                                                 -----------  -----------  -----------  -----------
    Weighted average number of shares
      assuming dilution........................      59,903       66,708       60,165       65,302
                                                 ===========  ===========  ===========  ===========

  Diluted net income per share................. $      0.02  $      0.12  $      0.04  $      0.22
                                                 ===========  ===========  ===========  ===========`

Recent Accounting Pronouncements

In November 2002, the FASB issued FIN 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (an interpretation of FASB Statements No. 5, 57, and 107
and rescission of FASB interpretation No. 34)". This Interpretation
addresses the disclosures to be made by a guarantor in its interim and annual
financial statements about its obligations under certain guarantees that it has
issued. It also requires a guarantor to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. This Interpretation also incorporates, without change,
the guidance in FASB Interpretation No. 34, Disclosure of Indirect Guarantees of
Indebtedness of Others, which is being superseded. The initial recognition and
initial measurement provisions of this Interpretation are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002,
irrespective of the guarantor's fiscal year-end. The disclosure requirements in
this Interpretation are effective for financial statements of interim or annual
periods ending after December 15, 2002. The adoption of this interpretation will
have no effect on the Company's financial statements.

In January 2003, the FASB issued FIN 46, "Consolidation of Variable
Interest Entities -- an interpretation of ARB No. 51"("FIN
46").  The objective of this Interpretation is not to restrict the
use of variable interest entities but to improve financial reporting by
enterprises involved with variable interest entities.  FIN 46 states that a
business enterprise with a controlling financial interest in a variable interest
entity should include the assets, liabilities, and results of the activities of
the variable interest entity in consolidated financial statements with those of
the business enterprise. FIN 46 applied immediately to variable interest
entities created after January 31, 2003, and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first
fiscal year or interim period beginning after June 15, 2003, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2003. The adoption of this interpretation will have
no effect on the Company's financial statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities" ("SFAS No.
149").  SFAS No. 149 amends and clarifies financial accounting and
reporting for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives) and for
hedging activities under FASB Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities.  This Statement requires that contracts
with comparable characteristics be accounted for consistently as either
derivatives or hybrid instruments. This Statement is effective for contracts
entered into or modified after June 30, 2003, and for hedging relationships
designated after June 30, 2003.  The adoption of this statement will have no
effect on the Company's financial statements.

4.	LOANS HELD-FOR-SALE

The inventory of mortgage and home equity loans consists
primarily of first and second trust deed mortgage loans and home equity lines of
credit on residential properties located throughout the United States. All
mortgage and home equity loans held-for-sale are pledged as collateral for
borrowings at December 31, 2002 and June 30, 2003 (see Note 8).

The inventory of auto loans consists primarily of loans
against new and used automobiles located throughout the United States.  All of
the auto loans held-for-sale are pledged as collateral for borrowings at
December 31, 2002 and June 30, 2003 (see Note 8).  The following summarizes
loans held-for-sale at December 31, 2002 and June 30, 2003 (dollars in
thousands):

`Dec 31,   June 30,
                                            2002       2003
                                          ---------  ---------
Mortgage................................ $ 370,854  $ 268,031
Home equity.............................    17,851     24,882
Auto....................................     4,048      7,745
Net deferred origination revenue........       633        534
                                          ---------  ---------
                                         $ 393,386  $ 301,192
                                          =========  =========`

Included in loans held-for-sale is a SFAS 133 fair value
adjustment amount of $2.0 million and $0.2 million at December 31, 2002 and June
30, 2003, respectively. The SFAS 133 amount represents the change in fair value
from rate lock commitment date to funding of those loans held-for-sale.  The
total fair value of loans held-for-sale, including the expected embedded gain on
those loans, is $401.7 and $310.0 million at December 31, 2002 and June 30,
2003, respectively.

5. 	ACCOUNTS RECEIVABLE, PREPAIDS AND OTHER CURRENT ASSETS

The following summarizes accounts receivable, prepaids
and other current assets at December 31, 2002 and June 30, 2003 (dollars in
thousands):

`Dec 31,   June 30,
                                            2002       2003
                                          ---------  ---------
Prepaids................................ $   3,511  $   3,601
Accounts receivable.....................     4,152     17,643
Interest receivable.....................     1,432      1,158
SFAS 133................................       956      1,476
Deferred tax asset......................       728        728
Deposits................................        --         52
                                          ---------  ---------
                                         $  10,779  $  24,658
                                          =========  =========`

Included in prepaids at December 31, 2002 and June 30, 2003 are prepayments
for sales and marketing in the amounts of $0.6 and $1.8 million, respectively.
Included in accounts receivable is the receivable due to the Company from sales
of mortgage loans on its sale agreement with Greenwich Capital Financial
Products, Inc. ("Greenwich Capital") in the amounts of $1.9 million
and $12.9 million at December 31, 2002 and June 30, 2003, respectively (see Note
8).  SFAS 133 is related to the fair value of derivatives at December 31, 2002
and June 30, 2003.

6.	RETAINED INTERESTS IN AUTO LOANS

In June 2002, the Company created a qualified special
purpose entity, E-Loan Auto Fund One, LLC ("E-Loan Auto"), which purchases prime
auto loans from the Company and then holds the loans.  For the three and six
months ended June 30, 2003, the Company sold $115.1 million and $238.6 million
in auto loans to E-Loan Auto and recognized $1.7 million and $3.4 million in
related non-cash gain on sale.  In exchange for the loans sold, the Company
received cash of $114.5 million and $237.4 million from E-Loan Auto and a
retained interest valued at $2.3 million and $4.6 million in the loans sold to
E-Loan Auto. From inception through June 30, 2003, the Company has sold $412.0
million in auto loans to E-Loan Auto and recognized $6.5 million in related non-cash
gain on sale. For the three months ended June 30, 2003, the average loan
characteristics on auto loans sold to E-Loan Auto were $19,096 loan size, 731
credit score, 17% new versus used car, and an average APR of 5.11%.  The retained interest
represents the Company's portion of the present value of the expected excess
cash flows over the life of the loans, remaining after payment of interest,
servicing fees and credit losses. Included in the retained interest is a
contributed basis in the loans sold to E-Loan Auto of 0.5%. The contributed
basis is the difference between the loan amount and the cash sale proceeds
received from E-Loan Auto of 99.5% (of the unpaid principal balance), which
represents over collateralization in those loans.
Cash flows are to be distributed by E-Loan Auto in the following
manner: first to the hedge counterparty, second to the servicer, custodian and
administrator, third to the lender for interest expense, fourth to the lender
for principal payments, fifth to the Company and the lender any remaining cash
flows, to be split 85% and 15%, respectively, up to $600 million in
originations. After $600 million in originations, all remaining cash flows will
be paid directly to the Company.  The servicing fee is passed through to a sub-servicer
of the Company, and as such the Company does not capitalize a servicing
asset for the loans sold to E-Loan Auto, since the cost to sub-service equals
the servicing fee.

The following table provides a summary of activity in the
retained interests in auto loans:



|Beginning Balance 01/01/03                     | $      3,969
|---------------------------------------------- | ------------
|Contributed basis in loans sold to E-Loan
Auto | 1,193       
|Non-cash gain on sale                          | 3,389       
|Accretion of present value discount            | 448         
|Ending Balance 06/30/03                        | $     8,999 



At June 30, 2003, key valuation assumptions used to value the
retained interests and the sensitivity of those assumptions to immediate 10% and
25% adverse changes in those assumptions are as follows:

|                                                                | June 30, 2003(dollars in thousands)
|--------------------------------------------------------------- | -----------------------------------
|Balance sheet carrying value of retained
interests - fair value | $8,999                             
|Weighted-average life (in months)                               | 52.6                               
|Prepayment speed assumptions (ABS)                              | 1.2                                
|Impact on fair value of 10% adverse change
(1.32)               | ($781)                             
|Impact on fair value of 25% adverse change
(1.50)               | ($1,064)                           
|Expected credit losses (life of loan loss
rate)                 | 72 bps                             
|Impact on fair value of 10% adverse change
(79 bps)             | ($790)                             
|Impact on fair value of 25% adverse change
(90 bps)             | ($1,089)                           
|Residual cash flows discount rate (average
annual rate)         | 12.0%                              
|Impact on fair value of 10% adverse change
(13.2%)              | ($780)                             
|Impact on fair value of 25% adverse change
(15.0%)              | ($1,051)                           



These sensitivities are hypothetical and should be used with
caution.  As the figures indicate, changes in fair value of the retained
interests based on a variation in assumptions generally cannot be extrapolated
because the relationship of the change in assumption to the change in fair value
may not be linear.  Also in the above table, the effect of a variation in a
particular assumption on the fair value of the retained interest is calculated
without changing any other assumption; in reality, changes in one factor may
result in changes in another (for example, increases in market interest rates
may result in lower prepayments but increased credit losses), which might
magnify or counteract the sensitivities.

The discount rate was determined by assessing the risk
related to the asset to account for the present value of the cash flows to be
received over the life of the loans. As a result, the retained interest asset is
an interest earning asset, with interest income accreted over time at the
discount rate and included in Other Income, net. The loss rates were determined
by researching existing data on losses obtained from credit rating agencies and
analyzed by credit tiers (i.e. credit score ranges) to determine loss rates
specific to credit tiers, as opposed to an averaged rate. The Company then
compared these rates to those of two major national banks to ensure its loss
rates are within a range of what other market participants would estimate. The
prepayment speed projects prepayments on a monthly percentage of the original
loan balance. All assumptions will be monitored over time and may be updated to
reflect actual performance.

7.	NOTES PAYABLE

On June 30, 2003, the Company obtained a $5 million line of credit from
Wells Fargo Bank, National Association to support working capital needs. The
interest rate charged on borrowings against these funds is based on LIBOR plus
2% and  is payable monthly. The line of credit expires on June 30, 2004.

8.	WAREHOUSE AND OTHER LINES PAYABLE

As of June 30, 2003, the Company had a warehouse line of
credit for borrowings of up to $175 million for the interim financing of
mortgage loans with GMAC Bank. The interest rate charged on borrowings against
these funds is variable based on LIBOR plus various percentage points.
Borrowings are collateralized by the related mortgage loans held-for-sale.  This
line of credit agreement generally requires the Company to comply with various
financial and non-financial covenants.  In particular, the Company must maintain
a minimum unrestricted cash balance of $12.5 million. The Company was in
compliance with these covenants during the three and six months ended and at
June 30, 2003. The committed line of credit expires on September 30, 2003.

As of June 30, 2003, the Company had a warehouse line of
credit for borrowings of up to $75 million for the interim financing of mortgage
loans with Residential Funding Corporation. The interest rate charged on
borrowings against these funds is variable based on LIBOR plus various
percentage points. Borrowings are collateralized by the related mortgage loans
held-for-sale.  This line of credit agreement generally requires the Company to
comply with various financial and non-financial covenants.  In particular, the
Company must maintain a minimum unrestricted cash balance of $12.5 million. The
Company was not in compliance with its current ratio covenant for the months
ended April 30 and May 31, 2003 and subsequently obtained a waiver from the
lender. The Company was in compliance with all covenants as of June 30, 2003.
The committed line of credit expires on December 31, 2003.

As of June 30, 2003, the Company had an agreement to finance
up to $475 million of mortgage loan inventory pending sale of these loans to the
ultimate mortgage loan investors with Greenwich Capital.  Of this amount, $200
million is available in committed funds. This loan inventory financing is
secured by the related mortgage loans. The interest rate charged on borrowings
against these funds is based on LIBOR plus various percentage points. This
agreement includes various financial and non-financial covenants. In particular,
the Company must maintain a minimum cash and cash equivalents balance of the
higher of $15 million (including Restricted Cash) or the highest amount required
by any other lender or agreement. The Company was in compliance with these
covenants during the three and six months ended and at June 30, 2003. The line
expires on March 30, 2004.

In addition, the Company has an uncommitted mortgage loan
purchase and sale agreement with Greenwich Capital. Under the terms of this
agreement, mortgage loans which are subject to a mandatory sell forward
commitment between the Company and an investor, but have not yet been purchased,
may be sold to Greenwich Capital with the accompanying trade assignment.  This
allows the Company to accelerate turnover and provide additional liquidity to
fund additional mortgage loans.  Revenue derived from sales under this agreement
is included as a receivable on the balance sheet (see Note 5). The balance of
loans sold related to these receivables was $48.7 million and $289.2 million as
of December 31, 2002 and June 30, 2003, respectively.

As of June 30, 2003, the Company had a $10 million line of
credit facility with Merrill Lynch Mortgage Capital, Inc. to support the interim
funding of auto loans prior to their sale to the ultimate auto loan purchaser.
The interest rate charged on this line is based on LIBOR plus various percentage
points.  This facility expires on July 13, 2004. This line includes various
financial and non-financial covenants. The Company was in compliance with these
covenants during the three and six months ended and at June 30, 2003.

The following summarizes warehouse and other lines payable at
December 31, 2002 and June 30, 2003 (dollars in  thousands):

`Dec 31,   June 30,
                                            2002       2003
                                          ---------  ---------
Warehouse lines - GMAC.................. $  68,955  $ 147,324
Warehouse lines - Greenwich.............   311,549    119,213
Warehouse lines - RFC...................        --     20,976
Line of credit - Auto...................     3,143      5,978
                                          ---------  ---------
                                         $ 383,647  $ 293,491
                                          =========  =========`

9.	ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES

The following summarizes accounts payable, accrued
expenses and other current liabilities at December 31, 2002 and June 30, 2003
(dollars in thousands):

`Dec 31,   June 30,
                                            2002       2003
                                          ---------  ---------
Accounts payable........................ $   4,637  $   9,167
Accrued compensation....................     2,710      4,717
Income tax payable......................     1,665        454
Other current liabilities...............     1,898        922
Reserves................................       900      2,067
Interest payable........................       529        476
                                          ---------  ---------
                                         $  12,339  $  17,803
                                          =========  =========`

Included in other current liabilities is an amount related to the fair value
of SFAS 133 derivatives of $1.7 and $0.8 million at December 31, 2002 and June
30, 2003, respectively.

Included in the accounts payable, accrued expenses and other
current liabilities is an amount related to reserves the Company established for
representation and warranties and premium repayment liability.  The Company
sells loans to loan purchasers on a servicing released basis without recourse.
As such, the risk of loss or default by the borrower has generally been assumed
by these purchasers. However, the Company is usually required by these
purchasers to make certain representations relating to credit information, loan
documentation and collateral. To the extent that the Company does not comply
with such representations, or there are early payment defaults, the Company may
be required to repurchase loans or indemnify these purchasers for any losses
from borrower defaults.  In connection with a majority of its loan sale
agreements, the Company is also responsible for a minimum number of payments to
be made on each loan, or else the Company may be required to refund the premium
paid to it by the loan purchaser.  As such, the Company records reserves based
on certain assumptions in anticipation of future losses as a result of current
activity.

Loss reserves due to violations of representations and
warranties are recorded based on a percentage of current month originations.
The Company currently calculates this loss rate exposure based on similar
lending portfolios.  Once the Company has endured a complete economic cycle, the
rate will be determined based on actual losses as a percentage of origination
volume on a historical basis.  Premium repayment reserves, generated through
early loan prepayments, are recorded based on a rate determined by calculating
actual prepayments as a percentage of originations on a historical basis applied
to current month originations.  The following illustrates the changes in the
reserve balance for the three and six months ended June 30, 2003 by product (in
thousands):

`Home
                           Mortgage    Equity      Auto       Total
                           ---------  ---------  ---------  ---------
Balance at 1/1/03........ $     618  $     161  $     121  $     900
   Increase to reserve...       743        201        119      1,063
   Losses incurred.......      (285)       (73)       (34)      (392)
                           ---------  ---------  ---------  ---------
Balance at 03/31/03...... $   1,076  $     289  $     206  $   1,571
   Increase to reserve...       455        385         18        858
   Losses incurred.......       (77)      (284)        (1)      (362)
                           ---------  ---------  ---------  ---------
Balance at 06/30/03...... $   1,454  $     390  $     223  $   2,067
                           =========  =========  =========  =========`

10.	REVENUES AND OTHER INCOME, NET

The following table provides the components of revenues
(in thousands):

`Three Months Ended     Six Months Ended
                                                     June 30,               June 30,
                                                 2002       2003        2002       2003
                                               ---------  ---------   ---------  ---------
Revenues:
   Mortgage.................................. $  11,738  $  31,505   $  24,553  $  55,356
   Interest income on mortgage loans.........     2,985      5,152       5,975     10,016
   Home equity...............................     3,267      5,334       5,551      9,273
   Interest income on home equity loans......       519        682         757      1,106
   Auto......................................     2,250      2,817       4,548      5,473
   Other.....................................       227        393         368        648
                                               ---------  ---------   ---------  ---------
         Total revenues...................... $  20,986  $  45,883   $  41,752  $  81,872
                                               =========  =========   =========  =========`

The following table provides the components of other income,
net (in thousands):

`Three Months Ended     Six Months Ended
                                                     June 30,               June 30,
                                                 2002       2003        2002       2003
                                               ---------  ---------   ---------  ---------
Interest on short-term investments........... $      55  $      70   $     140  $     102
Interest on retained interest asset..........        --        218          --        448
Interest expense on non-warehouse
   facility borrowings.......................       (16)        (7)       (158)        (7)
Other........................................        --          5          --          5
                                               ---------  ---------   ---------  ---------
                                              $      39  $     286   $     (18) $     548
                                               =========  =========   =========  =========`

11.	OPERATING EXPENSES

The following table provides the components of operating
expenses (in thousands):

`Three Months Ended     Six Months Ended
                                                    June 30,               June 30,
                                                 2002       2003        2002       2003
                                               ---------  ---------   ---------  ---------
Compensation and benefits.................... $   9,457  $  16,713   $  18,680  $  30,199
Processing costs.............................       910        630       1,445      1,491
Advertising and marketing....................     4,938     10,171       9,154     17,436
Professional services........................       648      2,266       1,383      3,485
Occupancy costs..............................     1,006      1,618       1,919      3,119
Computer and internet........................       220        508         507        857
General and administrative...................     1,274      1,944       2,706      3,514
Interest expense on warehouse borrowings.....     1,599      3,205       3,309      6,058
                                               ---------  ---------   ---------  ---------
         Total operating expenses............ $  20,052  $  37,055   $  39,103  $  66,159
                                               =========  =========   =========  =========`

Commissions and bonus compensation comprised 21% and 30% of total
compensation and benefits in the three months ended June 30, 2002 and 2003.
Commissions and bonus compensation comprised 22% and 27% of total compensation
and benefits in the six months ended June 30, 2002 and 2003.

The following table provides detail of the operations component of total
operating expenses classified by the following revenue-related categories (in
thousands):

`Three Months Ended      Six Months Ended
                                                   June 30,                June 30,
                                              2002        2003        2002        2003
                                           ----------  ----------  ----------  ----------
Mortgage ................................ $    5,967  $   10,613  $   11,817  $   19,115
Interest expense on mortgage loans.......      1,301       2,505       2,813       4,904
Home equity..............................      1,844       3,170       3,175       6,199
Interest expense on home equity loans....        241         531         351         820
Auto.....................................      1,940       3,702       3,952       6,486
Other....................................         34          --          71          --
                                           ----------  ----------  ----------  ----------
Total operations......................... $   11,327  $   20,521  $   22,179  $   37,524
                                           ==========  ==========  ==========  ==========`



12.	COMMITMENTS AND CONTINGENCIES

FINANCIAL INSTRUMENT CONTINGENCIES

E-LOAN originates mortgage and home equity loans and
manages the market risk related to these loans through various hedging
programs.

Loan commitments and hedging activities

The Company originates mortgage loans and sells them
primarily through whole loan sales. The market values of mortgage loans are
sensitive to changes in market interest rates. If interest rates rise between
the time the Company enters into a rate lock with the borrower, the subsequent
funding of the loan and the time the mortgage loans are committed for sale,
there may be a decline in the market value of the mortgage loans. To protect
against such possible declines, the Company has adopted an economic hedging
strategy.

Individual mortgage loan risks are aggregated by loan type
and pipeline production status and matched, based on duration, with the
appropriate hedging instrument, thus mitigating basis risk
until closing and delivery. The Company currently hedges its mortgage pipeline
through mandatory forward sales of Fannie Mae mortgage-backed securities and
both mandatory and non-mandatory forward sale agreements with the ultimate
investor. The Company determines which alternative provides the best execution
in the secondary market.

The Company believes that it has implemented a cost-effective
economic hedging program to provide a high level of protection against changes
in the market value of rate-lock commitments. However, an effective strategy is
complex and no hedging strategy can completely insulate the Company against such
changes.

At June 30, 2003, the Company had provided locks to originate
loans amounting to approximately $706.8 million (the "locked pipeline").  At
June 30, 2003, the Company had entered into non-mandatory forward loan sale
agreements amounting to approximately $531.9 million. These forward loan sale
agreements do not subject the Company to mandatory delivery and there is no
penalty if the Company does not deliver into the commitment. The Company is
exposed to the risk that these counterparties may be unable to meet the terms of
these sale agreements. The investors are well-established U.S. financial
institutions; the Company does not require collateral to support these
commitments, and there has been no failure on the part of the counterparties to
meet the terms of these agreements to date.

At June 30, 2003, the Company had entered into mandatory sell
forward commitments amounting to approximately $244.8 million. The Company
adjusts the amount of mandatory sell forward commitments held to offset changes
in the locked pipeline and changes in the market value of unsold loans.  At June
30, 2003, the Company had entered into $225.7 million of commitments with third
party investors to deliver loans related to funded loans held-for-sale.

Future Commitments

The Company has future payment commitments for
leases and non-cancelable TV media aggregating $5.6 million, $5.5 million, $2.7
million and $2.7 million for the years 2003, 2004, 2005 and 2006, respectively.
The Company has commitments of $9.3 million for the years 2007 and beyond.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and
results of operations of the Company should be read in conjunction with the
Financial Statements and the related Notes thereto included elsewhere in this
Form 10-Q. This discussion contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below, as well as
those discussed below under "Factors Affecting Future Operating Results." The
Company disclaims any obligation to update information contained in any forward-looking
statement. See "Forward-Looking Statements."

OVERVIEW

The Company is a consumer direct lender and debt advisor
whose revenues are derived primarily from the gain on sale of mortgage, home
equity and auto loans that it underwrites, funds and sells. The Company also
earns interest income on loans during the brief time they are held pending
sale.

MORTGAGE REVENUES

The Company's mortgage revenues are primarily derived from
the origination and sale of self-funded loans. In prior years the Company
derived a portion of its mortgage revenues from the brokering of loans.
Brokered loans are funded through lending partners and the Company never takes
title to the mortgage loan.  Beginning in 2002, the Company no longer brokered
mortgage loans.  Self-funded loans are funded through the Company's own
warehouse lines of credit and sold to mortgage loan purchasers typically within
thirty days. Self-funded loan revenues consist of proceeds in excess of the
carrying value of the loan and origination fees less certain direct origination
costs. These revenues are recognized at the time the loan is sold.

INTEREST INCOME ON MORTGAGE AND HOME EQUITY LOANS

The Company generates revenues from interest income on self-funded
mortgage and home equity loans.  The revenues realized are based on the
loan amount multiplied by the contractual interest rate from the time of funding
by the Company through time of sale.  These revenues are recognized as earned
during the period from funding to sale.

HOME EQUITY REVENUES

The Company's home equity revenues are derived from the
origination and sale of self-funded loans. Self-funded loans are funded through
the Company's own warehouse lines of credit and sold to home equity loan
purchasers typically within sixty days. Self-funded loan revenues consist of
proceeds in excess of the carrying value of the loan, origination fees less
certain direct origination costs and other processing fees. These revenues are
recognized at the time the loan is sold.

AUTO REVENUES

The Company funds auto loans using a line of credit and then
sells them to either earn a gain on sale or a flat fee, depending on who the
loans are sold to.  Prime auto loans are sold to a qualified special purpose
entity (QSPE) as more fully described below.  Sub-prime auto loans are sold to
sub-prime auto loan purchasers.

In July 2002, the Company began selling self-funded prime
auto loans to a QSPE (see "Critical Accounting Policies").  Revenues from these
sales consist of the discounted cash flows net of interest, servicing fees and
credit losses.  Revenues on prime auto loan sales are recognized when the loan
is sold to the QSPE.

The Company's auto revenues on sub-prime loans are derived
from the origination and sale of self-funded loans and from the brokering of
auto loans. Auto brokerage revenues are comprised of a set origination fee.
These revenues are recognized at the time a loan is closed. Self-funded loans
are funded through an auto line of credit and sold to auto loan purchasers
typically within ten business days. In April 2001, the Company began funding its
auto loans prior to sale with borrowings against an auto line of credit. Self-funded
loan revenues consist of the mark-up to the lending partner's loan price
or a set origination fee. These revenues are recognized at the time a loan is
sold.

OTHER REVENUES

The Company generates revenues from fees paid by
various partners in exchange for consumer loan applications generated by
advertising such partners' products on the Company's website.  The current
consumer loan programs offered include credit cards and unsecured personal
loans.  Additionally, the Company earns revenue from its credit report services.
Other revenues generated approximately 1% of the total revenues in the three and
six months ended June 30, 2002 and 2003.

RESULTS OF OPERATIONS

The following table sets forth certain items from the
Company's statements of operations as a percentage of total revenues for the
periods indicated:

`Three Months Ended        Six Months Ended
                                                                  June 30,                  June 30,
                                                            2002         2003         2002         2003
                                                         -----------  -----------  -----------  -----------
Revenues ..............................................         100%         100%         100%         100%

Operating expenses:
    Operations (Note 11)...............................          54%          45%          53%          46%
    Sales and marketing................................          29%          25%          27%          24%
    Technology.........................................           6%           5%           6%           5%
    General and administrative.........................           6%           6%           7%           6%
                                                         -----------  -----------  -----------  -----------
           Total operating expenses....................          95%          81%          93%          81%
                                                         -----------  -----------  -----------  -----------
Income from operations.................................           4%          19%           6%          19%
Other income, net......................................           0%           1%          -0%           1%
                                                         -----------  -----------  -----------  -----------
Income before taxes....................................           5%          20%           6%          20%
Income taxes...........................................          -0%          -2%          -0%          -2%
                                                         -----------  -----------  -----------  -----------
Net income.............................................           4%          18%           6%          18%
                                                         ===========  ===========  ===========  ===========`

Revenues

The following table provides the components of revenue shown as
a percentage of total revenues:

`Three Months Ended     Six Months Ended
                                                      June 30,               June 30,
                                                 2002       2003        2002       2003
                                               ---------  ---------   ---------  ---------
Revenues:
   Mortgage..................................        56 %       69 %        59 %       68 %
   Interest income on mortgage loans.........        14 %       11 %        14 %       12 %
   Home equity...............................        16 %       12 %        13 %       11 %
   Interest income on home equity loans......         2 %        1 %         2 %        1 %
   Auto......................................        11 %        6 %        11 %        7 %
   Other.....................................         1 %        1 %         1 %        1 %
                                               ---------  ---------   ---------  ---------
         Total revenues......................       100 %      100 %       100 %      100 %
                                               =========  =========   =========  =========`

Revenues increased $24.9 million to $45.9
million for the three months ended June 30, 2003 from $21.0 million for the
three months ended June 30, 2002. Revenues increased $40.1 million to $81.9
million for the six months ended June 30, 2003 from $41.8 million for the six
months ended June 30, 2002.  A significant portion of these increases resulted
from growth in the dollar volume of mortgage and home equity loans closed and
sold, as well as an increase in mortgage revenue earned per loan. Mortgage
revenues increased $19.8 million to $31.5 million for the three months ended
June 30, 2003 from $11.7 million for the three months ended June 30, 2002.
Mortgage revenues increased $30.8 million to $55.4 million for the six months
ended June 30, 2003 from $24.6 million for the six months ended June 30, 2002.
Prime refinance mortgages accounted for 75% and 68% of mortgage closed loan
volume and 72% and 67% of mortgage revenue in the three months ended June 30,
2002 and 2003, respectively.  The Company expects refinance activity to decline
in the second half of 2003 and that growth in purchase and non-prime mortgages
will help offset the decline in refinance volume. The Company expects mortgage
revenue (excluding interest income) in 2003 to exceed 2002 levels. Home equity
revenues increased $2.0 million to $5.3 million for the three months ended June
30, 2003 from $3.3 million for the three months ended June 30, 2002. Home equity
revenues increased $3.7 million to $9.3 million for the six months ended June
30, 2003 from $5.6 million for the six months ended June 30, 2002. The Company
expects that home equity revenues will grow throughout 2003 as volumes increase.
Revenues also increased due to an increase in interest income earned on mortgage
and home equity loans. Auto revenues increased $0.6 million to $2.8 million for
the three months ended June 30, 2003 from $2.2 million for the three months
ended June 30, 2002.  Auto revenues increased $0.9 million to $5.5 million for
the six months ended June 30, 2003 from $4.6 million for the six months ended
June 30, 2002.  Auto refinance loans accounted for 18% and 40% of auto closed
loan volume in the three months ended June 30, 2002 and 2003, respectively.
The increase in
auto revenues from the three and six months ended June 30, 2002 to the three and
six months ended June 30, 2003 is largely a result of the new QSPE structure
introduced in June 2002 that improved our ability to offer competitive rates to
consumers which increased prime auto loan volume. The Company expects that auto
revenues will grow throughout 2003 as prime auto loan volumes increase.

The following table summarizes dollar volume of loans closed and sold and the
revenue in both dollars and average basis points ("BPS") (dollars in
thousands except BPS):

`Three Months Ended      Six Months Ended
                                                   June 30,                June 30,
                                              2002        2003        2002        2003
                                           ----------  ----------  ----------  ----------
Mortgage
$ Volume                                  $  766,494  $1,214,742  $1,683,296  $2,324,750
Revenue                                   $   11,738  $   31,505  $   24,553  $   55,356
BPS                                              153         259         146         238

Home Equity
$ Volume                                  $  124,125  $  192,169  $  221,773  $  359,958
Revenue                                   $    3,267  $    5,334  $    5,551  $    9,273
BPS                                              263         278         250         258

Auto
$ Volume                                  $  150,733  $  164,729  $  291,196  $  332,835
Revenue                                   $    2,250  $    2,817  $    4,548  $    5,473
BPS                                              149         171         156         164`

The following table reflects the percentages of the Company's
mortgage closed loan volume from purchase and refinance loans as compared to the
total market (according to Mortgage Bankers Association of America) through
2003.  The Mortgage Bankers Association of America data for the second quarter
of 2003 below represents its estimate as of  July 14, 2003:

`2000      2001      2002      Q1 03     Q2 03
                  --------- --------- --------- --------- ---------
E-LOAN Mortgage*
    Purchase         61%       16%       21%       25%       32%
    Refinance        39%       84%       79%       75%       68%

Total Market*
    Purchase         81%       43%       41%       29%       32%
    Refinance        19%       57%       59%       71%       68%`

* Excludes home equity and auto loan volume

Operating Expenses

Total Operating Expenses. Total operating expenses
increased $17.0 million to $37.1 million for the three months ended June 30,
2003 from $20.1 million for the three months ended June 30, 2002.  Total
operating expenses increased $27.1 million to $66.2 million for the six months
ended June 30, 2003 from $39.1 million for the six months ended June 30, 2002.
The increase was primarily due to increases in interest expense on warehouse
borrowings, due to higher volumes, as well as increases in compensation and
benefits due to growth in headcount.  Total operating expenses also increased
due to additional advertising and marketing spend.



Operations.

The following table provides detail of the Company's
operations expenses classified by the following revenue-related categories
(dollars in thousands):

`Three Months Ended      Six Months Ended
                                                  June 30,                June 30,
                                              2002        2003        2002        2003
                                           ----------  ----------  ----------  ----------
Mortgage ................................ $    5,967  $   10,613  $   11,817  $   19,115
Interest expense on mortgage loans.......      1,301       2,505       2,813       4,904
Home equity..............................      1,844       3,170       3,175       6,199
Interest expense on home equity loans....        241         531         351         820
Auto.....................................      1,940       3,702       3,952       6,486
Other....................................         34          --          71          --
                                           ----------  ----------  ----------  ----------
Total operations......................... $   11,327  $   20,521  $   22,179  $   37,524
                                           ==========  ==========  ==========  ==========`

Operations expense increased $9.2 million to $20.5 million
for the three months ended June 30, 2003 from $11.3 million for the three months
ended June 30, 2002.  Operations expense increased $15.3 million to $37.5
million for the six months ended June 30, 2003 from $22.2 million for the six
months ended June 30, 2002.  Operations expense decreased as a percentage of
revenue from 54% to 45% and 53% to 46% for the three and six months ended June
30, 2002 and 2003, respectively.  The increase in absolute dollars is primarily
due to increases in mortgage, home equity and auto operations expenses, due to
higher volumes. In the quarter, auto operations expense included expenses of
approximately $1.0 million related to the one-time transition of auto operations
from Florida to California.  The Company completed the transition in June, which
resulted in a total expense of $1.3 million for the six months ended June 30,
2003.

Direct Margin. Direct margin is defined as
revenue minus operations expense, which includes variable and fixed
expenses.

The following table provides detail of the Company's direct
margin classified by the following revenue-related categories (dollars in
thousands):

`Three Months Ended      Six Months Ended
                                                  June 30,                June 30,
                                              2002        2003        2002        2003
                                           ----------  ----------  ----------  ----------
Mortgage................................. $    5,771  $   20,892  $   12,737  $   36,241
Mortgage interest margin.................      1,684       2,647       3,162       5,112
Home equity..............................      1,423       2,164       2,376       3,074
Home equity interest margin..............        278         151         406         286
Auto.....................................        310        (885)        588      (1,013)
Other....................................        193         393         304         648
                                           ----------  ----------  ----------  ----------
Total direct margin...................... $    9,659  $   25,362  $   19,573  $   44,348
                                           ==========  ==========  ==========  ==========`

Direct margin increased $15.7 million to $25.4 million for
the three months ended June 30, 2003 from $9.7 million for the three months
ended June 30, 2002.  Direct margin increased $24.8 million to $44.3 million for
the six months ended June 30, 2003 from $19.5 million for the six months ended
June 30, 2002.  The growth in direct margin is due largely to the contribution
from mortgage volume coupled with technology and process improvements.
Additionally, the increase in direct margin is due to the positive spread of
interest income over interest expense.  The Company anticipates that mortgage
revenue per loan and the spread of interest income over interest expense will
decline throughout 2003, as the overall level of refinance activity declines and
competitive pricing pressure increases. Auto direct margin was negative in the
three and six months ended June 30, 2003 due to the one-time expense of
approximately $1.0 million and $1.3 million for the three and six months ended
June 30, 2003 related to the transition of auto operations from Florida to
California.

Sales and Marketing. Sales and marketing
expense is primarily comprised of expenses related to advertising, promotion and
distribution partnerships and employee compensation and other expenses related
to personnel.  Sales and marketing expense increased $5.3 million to $11.4
million for the three months ended June 30, 2003 from $6.1 million for the three
months ended June 30, 2002.  Sales and marketing expense increased $8.6 million
to $19.9 million for the six months ended June 30, 2003 from $11.3 million for
the six months ended June 30, 2002.  Sales and marketing expense decreased as a
percentage of revenue from 29% to 25% for the three months ended June 30, 2002
and 2003, respectively, and decreased as a percentage of revenue from 27% to 24%
for the six months ended June 30, 2002 and 2003, respectively.  Sales and
marketing expenses are expected to increase to approximately 26% of total
revenues in the latter half of 2003.

Technology. Technology expense includes
employee compensation, the introduction of new technologies and the support of
E-LOAN's existing technological infrastructure. Technology expense increased
$1.1 million to $2.3 million for the three months ended June 30, 2003 from $1.2
million for the three months ended June 30, 2002.   Technology expense increased
$1.3 million to $4.0 million for the six months ended June 30, 2003 from $2.7
million for the six months ended June 30, 2002. Technology expense decreased as
a percentage of revenue from 6% to 5% for the three and six months ended June
30, 2002 and 2003, respectively. Technology expenses are expected to
stay fairly constant in absolute dollars in the upcoming quarters.

General and Administrative. General and
administrative expense is primarily comprised of employee compensation and
professional services. General and administrative expense increased $1.5 million
to $2.8 million for the three months ended June 30, 2003 from $1.3 million for
the three months ended June 30, 2002. General and administrative expense
increased $1.7 million to $4.7 million for the six months ended June 30, 2003
from $3.0 million for the six months ended June 30, 2002. General and
administrative expense remained constant as a percentage of revenue at 6% for
the three months ended June 30, 2002 and 2003, respectively and decreased as a
percentage of revenue from 7% to 6% for the six months ended June 30, 2002 and
2003, respectively.  General and administrative expenses are expected to stay
fairly constant in absolute dollars in the upcoming quarters.

Other Income, net.  Other income, net,
increased $0.2 million to $0.3 million for the three months ended June 30, 2003
from income of $0.1 million for the three months ended June 30, 2002.  Other
income, net, increased $0.5 million to $0.5 million for the six months ended
June 30, 2003 from income of $0 million for the six months ended June 30, 2002.
The increase is primarily attributable to the interest income generated from the
retained interest asset.

CRITICAL ACCOUNTING POLICIES

The consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the U.S., which
require the Company to make estimates and assumptions (see Note 2 to the
consolidated financial statements).  The Company believes that of its
significant accounting policies (see Note 3 to the consolidated financial
statements), the following may involve a higher degree of judgment and
complexity.

Retained interest in auto loans. On June 17, 2002, the
Company entered into an arrangement to sell auto loan receivables to a qualified
special purpose entity (QSPE), E-Loan Auto Fund One, LLC ("E-Loan
Auto"). These transactions involve the Company surrendering control over
these assets to assure that the sold assets have been isolated from the Company
and its creditors. As E-Loan Auto has met the appropriate tests to be considered
a QSPE the assets and liabilities of E-Loan Auto are appropriately not
consolidated in financial statements of the Company. E-Loan Auto has obtained a
secured borrowing facility from Merrill Lynch Bank USA to finance all purchases
of loans from the Company. The Company recognizes a gain on the sale of auto
loan receivables to E-Loan Auto in the period in which the sale occurs, which
represents the difference between the sale proceeds to the Company and the
Company's net carrying value of the receivables. Included in the proceeds
received by the Company from the sale of loans is a beneficial interest related
to loans owned by the QSPE, which is reflected on the Company's balance sheet as
a retained interest asset. These retained interest assets are recorded on the
balance sheet at fair value as trading assets, and are marked to market at each
subsequent reporting period.  In order to determine the fair value management
estimates future excess cash flows to be received by the Company over the life
of the loans. The Company makes various assumptions in order to determine the
fair value of the estimated future excess cash flows to be generated by the auto
loans sold to the QSPE. The most significant assumptions are the cumulative
credit losses to be incurred on the pool of auto loan receivables sold,
prepayment rates of the auto loans and the rate at which the estimated future
excess cash flows are discounted. The assumptions used represent the Company's
best estimates, and the use of different assumptions could produce different
financial results. The Company will continue to monitor and may update its
assumptions over time.

Valuation of derivative instruments.

The Company's management has made complex judgments in their
application of SFAS 133.  The judgments include the identification of hedging
instruments, hedged items, nature of the risk being hedged, and how the hedging
instrument's effectiveness will be assessed.  The Company designates forward
delivery commitments, where the company intends to deliver the underlying loan
into the commitment, as a fair value SFAS 133 hedge at the commitment date.   In
addition, the Company designates all non-mandatory forward sale agreements as
fair value SFAS 133 hedges for underlying loans at funding date.  The Company
does not designate mandatory sell forward agreements as SFAS 133 hedges but does
utilize them to economically hedge the changes in fair value of rate lock
commitments with borrowers for which a non-mandatory forward sale agreement has
not been obtained.  The Company did not have a material gain or loss
representing the amount of hedge ineffectiveness related to non-mandatory
forward sale agreements or delivery commitments during the three and six months
ended June 30, 2003.

Capitalized software.  In 1999, the Company adopted
SOP 98-1,Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use, which requires that the Company expense computer software
costs as they are incurred in the preliminary project stage. Once the
capitalization criteria of the SOP have been met, external direct costs of
materials and services consumed in developing or obtaining internal-use computer
software and payroll and payroll related costs for employees who are directly
associated with and who devote time to the internal-use computer software are
capitalized. Capitalized costs are generally amortized over one to three years
on a straight-line basis. As of June 30, 2003, the Company had capitalized
approximately $6.3 million in internally developed software costs of which $3.2
million had been amortized.

Reserves for loan originations.  The Company sells
loans to loan purchasers on a servicing released basis without recourse.  As
such, the risk of loss or default by the borrower has generally been assumed by
these purchasers. However, the Company is usually required by these purchasers
to make certain representations relating to credit information, loan
documentation and collateral. To the extent that the Company does not comply
with such representations, or there are early payment defaults, the Company may
be required to repurchase loans or indemnify these purchasers for any losses
from borrower defaults.  In connection with a majority of its loan sales
agreements, the Company is also responsible for a minimum number of payments to
be made on each loan, or else the Company may be required to refund the premium
paid to it by the loan purchaser.  As such, the Company records reserves based
on certain assumptions in anticipation of future losses as a result of current
activity.

Loan loss reserves due to violations of representations and
warranties are recorded based on a percentage of current month originations.
The Company currently calculates this loss rate exposure based on similar
lending portfolios.  Once the Company has endured a complete economic cycle, the
rate will be determined based on actual losses as a percentage of origination
volume on a historical basis.  Premium repayment reserves, generated through
early loan prepayments, are recorded based on a rate determined by calculating
actual prepayments as a percentage of originations on a historical basis applied
to current month originations.

Stock Compensation. The Company accounts for
stock-based employee compensation arrangements in accordance with the provisions of
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued
to Employees and related interpretations, and complies with the disclosure
requirements of SFAS No. 123, Accounting for Stock-Based Compensation.
Under APB No. 25, compensation expense is based on the excess of the estimated
fair value of the Company's stock over the exercise price, if any, on the date
of grant. The Company accounts for stock issued to non-employees in accordance
with the provisions of SFAS No. 123 and the Emerging Issues Task Force Consensus
in Issue No. 96-18, Accounting for Equity Instruments That Are Issued to
Non-Employees for Acquiring, or in Conjunction with Selling, Goods or
Services.

Deferred Tax Asset. The Company accounts for income
taxes using the liability method in accordance with SFAS No. 109, Accounting
for Income Taxes. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amounts expected
to be realized. Management evaluates the recoverability of the deferred tax
assets and the level of the valuation allowance. At such time as it is
determined that it is more likely than not that the deferred tax asset will be
realizable, the valuation allowance will be reduced.  Due to the uncertainty
surrounding the realization of favorable attributes in future tax returns, the
Company has recorded a valuation allowance against its net deferred tax assets
at June 30, 2003. The Company did not set up a valuation allowance against the
state deferred tax asset that arose in 2002 because it is expected to be fully
realized in 2003. The provision for income tax expense represents taxes payable
for the current period, plus the net change in deferred tax assets and
liabilities.

LIQUIDITY AND CAPITAL RESOURCES

The Company's sources of cash include cash from the
sale of mortgage, home equity and auto loans, borrowings under warehouse lines
of credit and other credit facilities, brokerage fees, interest income, credit
card referrals and the sale of debt and equity securities in both private and
public transactions. The Company's uses of cash include the funding of mortgage,
home equity and auto loans, repayment of amounts borrowed under warehouse lines
of credit, operating expenses, payment of interest, and capital expenditures
primarily comprised of furniture, fixtures, computer equipment, software and
leasehold improvements.

Net cash provided by operating activities was $69.7 million
and $96.8 million for the six months ended June 30, 2002 and 2003, respectively.
Net cash provided by operating activities during the six months ended June 30,
2002 and 2003 was primarily due to the cash provided from the decrease in loans
held-for-sale plus net income, off-set by the use of cash due to the increase of
the retained interest in auto loans.  The decrease in loans held-for-sale as of
June 30, 2002 and 2003 is due to the amount of loan sales in the quarter
exceeding the amount of loans funded.  A funded loan remains held-for-sale until
it is sold. During the six months ended June 30, 2003, the Company sold
substantially all of the loans included in the loan balance at December 31,
2002, as well as substantially all of the loans funded during the six months
ended June 30, 2003.  This had a positive impact on revenue in the current
quarter as we recognize revenue on self-funded loans at time of sale.

Net cash used in investing activities was $1.7 million and
$4.7 million for the six months ended June 30, 2002 and 2003, respectively.  Net
cash used in investing activities was primarily for the purchase of software,
furniture, equipment and leasehold improvements.

Net cash used in financing activities was $70.8
million and $84.6 million for the six months ended June 30, 2002 and 2003,
respectively.  Net cash used in financing activities during the six months ended
June 30, 2002 and 2003 was primarily from net repayments on the Company's
warehouse lines of credit and other credit facilities.

The Company has a warehouse line of credit for
borrowings of up to $175 million for the interim financing of mortgage loans
with GMAC Bank. The interest rate charged on borrowings against these funds is
variable based on LIBOR plus various percentage points. Borrowings are
collateralized by the related mortgage loans held-for-sale. The committed line
of credit expires on September 30, 2003. Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines. This
line of credit agreement generally requires the Company to comply with various
financial and non-financial covenants. In particular, the Company must maintain
a minimum unrestricted cash balance of $12.5 million in addition to the
requirement that the Company maintain at least one other warehouse facility of
no less than $100 million. Failure to comply with these, or any other covenants,
could result in the obligation to repay all amounts then outstanding. The
Company was in compliance with all covenants for this agreement during the three
and six months ended and at June 30, 2003.

The Company has a warehouse line of credit for borrowings of
up to $75 million for the interim financing of mortgage loans with Residential
Funding Corporation. The interest rate charged on borrowings against these funds
is variable based on LIBOR plus various percentage points. Borrowings are
collateralized by the related mortgage loans held-for-sale. The committed line
of credit expires on December 31, 2003. Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines. This
line of credit agreement generally requires the Company to comply with various
financial and non-financial covenants. In particular, the Company must maintain
a minimum unrestricted cash balance of $12.5 million in addition to the
requirement that the Company maintain at least one other warehouse facility of
no less than $100 million. Failure to comply with these, or any other covenants,
could result in the obligation to repay all amounts then outstanding. The
Company was not in compliance with its current ratio covenant for this agreement
for the months ended April 30, and May 31, 2003, and subsequently obtained a
waiver from the lender. The Company was in compliance with all covenants as of
June 30, 2003.

The Company has an agreement to finance up to $475 million of
mortgage loan inventory pending sale of these loans to the ultimate mortgage
loan investors with Greenwich Capital. Of this amount, $200 million is available
in committed funds. This loan inventory financing is secured by the related
mortgage loans. The interest rate charged on borrowings against these funds is
based on LIBOR plus various percentage points.  The line requires the
restriction of $2.5 million in cash as additional collateral.  The line expires
March 30, 2004. Upon expiration, management believes it will either renew its
existing line or obtain sufficient additional lines. This agreement includes
various financial and non-financial covenants. In particular, the Company must
maintain a minimum cash and cash equivalents balance of the higher of $15
million (including Restricted Cash) or the highest amount required by any other
lender or agreement. Additionally, the Company is required to maintain at least
one other warehouse facility of no less than $50 million. Failure to comply with
these, or any other covenants, could result in the obligation to repay all
amounts then outstanding.  The Company was in compliance with all debt covenants
for this agreement during the three and six months ended and at June 30, 2003.

In addition, the Company has an uncommitted mortgage loan
purchase and sale agreement with Greenwich Capital.  Under the terms of this
agreement, mortgage loans which are subject to a "take-out" commitment
between the Company and an investor, but have not yet been purchased, may be
sold to Greenwich Capital with the accompanying trade assignment.  This allows
the Company to accelerate turnover and provide additional liquidity to fund
additional mortgage loans.

The Company has a $10 million line of credit facility with
Merrill Lynch Mortgage Capital, Inc. to support the interim funding of auto
loans prior to the sale to the ultimate auto loan purchaser. The interest rate
charged on this line is based on LIBOR plus various percentage points. This
facility expires on July 13, 2004. Upon expiration, management believes it will
either renew its existing line or obtain sufficient additional lines.  The
Company was in compliance with all debt covenants for this agreement during the
three and six months ended and at June 30, 2003.

In 2002, the Company sold the majority of its sub-prime auto
loans to three auto loan purchasers, Americredit Financial Inc. ("Americredit"),
Triad Financial Corporation d.b.a. Roadloans and Transouth Financial Corporation.  In
October 2002, the Company terminated its agreement with Americredit, its largest
sub-prime auto loan purchaser.  The Company subsequently entered into an
agreement with Household Automotive Credit Corporation as a sub-prime auto loan purchaser to
replace Americredit.  However, the Company's management does not anticipate that
its current sub-prime auto loan purchasers, without Americredit, will support
the same loan volume.

In June 2002, the Company created a qualified special purpose
entity, E-Loan Auto Fund One, LLC ("E-Loan Auto"), which purchases prime auto
loans from the Company and then holds the loans. E-Loan Auto finances its
purchases through a $800 million credit facility with Merrill Lynch Bank USA,
which can support originations through July 13, 2005.  Borrowings are
collateralized by the related auto loans held by E-Loan Auto.  The Company is
not obligated to repay any balance outstanding under the credit facility that
exists between E-Loan Auto and Merrill Lynch Bank USA. Upon expiration, the
Company anticipates that E-Loan Auto will either renew its existing line or
obtain sufficient additional lines.

On June 30, 2003, the Company obtained a $5 million line of
credit from Wells Fargo Bank, National Association. The interest rate charged on
borrowings against these funds is based on LIBOR plus 2% and is payable monthly.
The line expires on June 30, 2004.

The Company believes that its existing cash and cash
equivalents as of June 30, 2003 will be sufficient to fund its operating
activities, capital expenditures and other obligations for the next twelve
months.  However, if during that period or thereafter the Company is not
successful in generating sufficient cash flow from operations, or in raising
additional funds when required in sufficient amounts and on terms acceptable to
the Company, it could have a material adverse effect on the Company's business,
results of operations and financial condition. If additional funds are raised
through the issuance of equity securities, the percentage ownership of its then-
current stockholders would be reduced.

FORWARD LOOKING STATEMENTS

The statements contained in this Report that are not
historical facts are "forward-looking statements" (as such term is defined in
Section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934), which can be identified by the use of forward-looking
terminology such as "estimated," "projects," "anticipated," "expects,"
"intends," "believes," or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. These forward-looking statements, such as the Company's plans to
increase the number of purchase loans, the relative importance of loans E-LOAN
originates and sells and growth in the number of applications received,
statements regarding development of E-LOAN's business, future operating results,
anticipated capital expenditures, the expectations as to the use of capital
resources and the availability of additional financing, and other statements
contained in this Report regarding matters that are not historical facts, are
only estimates or predictions and cannot be relied upon. No assurance can be
given that future results will be achieved; actual events or results may differ
materially as a result of risks facing the company or actual results differing
from the assumption underlying such statements. Such risks and assumptions
include, but are not limited to, E-LOAN's ability to access additional debt or
equity financing in the future, secure replacement lines of credit for mortgage
and auto loans, respond to increasing competition, secure additional loan
purchasers, manage growth of E-LOAN's operations, as well as regulatory,
legislative, and judicial developments that could cause actual results to vary
materially from the future results indicated, expressed or implied in such
forward-looking statements. All written and oral forward-looking statements made
in connection with this Report which are attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the "Factors
Affecting Future Operating Results" and other cautionary statements included
herein. The Company disclaims any obligation to update information contained in
any forward-looking statement.

FACTORS AFFECTING FUTURE OPERATING RESULTS

The following important factors, among others, could
cause actual results to differ materially from those contained in forward-looking
statements made in this report or presented elsewhere by management from
time to time.

While We Achieved Our First Profitable Year During Fiscal
2002, We Have a History of Losses, and We May Not Be Able to Maintain
Profitability

While we achieved our first profitable year during 2002,
we have an accumulated deficit of $191.8 million, as of June 30, 2003.  Because
we expect that our operating costs will increase to accommodate expected growth
in loan applications, we will need to generate significant revenues to maintain
profitability. We may not sustain or increase profitability on a quarterly or
annual basis in the future.  If revenues grow more slowly than we anticipate, or
if operating expenses exceed our expectations or cannot be adjusted accordingly,
our business, results of operations and financial condition will be adversely
affected.

We Have a Limited Operating History and Consequently Face
Significant Risks and Challenges in Building Our Business

We were incorporated in August 1996, initiated our online
mortgage operations in June 1997 and acquired our online auto operations in
September 1999. We cannot assure you that we will be able to operate
successfully if a downturn in the mortgage or auto business occurs. As a result
of our limited operating history, our recent growth and our reporting
responsibilities as a public company, we may need to expand operational,
financial and administrative systems and control procedures to enable us to
further train and manage our employees and coordinate the efforts of our
underwriting, accounting, finance, marketing, and operations departments.

Our Quarterly Financial Results Are Vulnerable to
Significant Fluctuations and Seasonality, Which Could Adversely Affect Our Stock
Price

Our revenues and operating results may vary significantly
from quarter to quarter due to a number of factors. Certain months or quarters
have historically experienced a greater volume of purchase money mortgage and
auto loan applications and funded loans. As a result, we believe that quarter-to-quarter
comparisons of our operating results are not a good indication of our
future performance. It is possible that in some future periods our operating
results may be below the expectations of public market analysts and investors.
In this event, the price of our common stock may fall.

Interest Rate Fluctuations Could Significantly Reduce
Customers' Incentive to Refinance Existing Mortgage Loans

A significant percentage of our mortgage customers use
our services to refinance existing mortgages and they are motivated to do so
primarily when interest rates fall below the rates of their existing mortgages.
In the event interest rates significantly increase, consumers' incentive to
refinance will be greatly reduced and the number of loans that we originate
could significantly decline.

Our Ability to Engage in Profitable Secondary Sales of
Loans May Also Be Adversely Affected by Increases in Interest Rates

The mortgage loan purchase commitments we obtain are
contingent upon our delivery of the relevant loans to the purchasers within
specified periods. To the extent that we are unable to deliver the loans within
the specified periods and interest rates increase during those periods, we may
experience no gain or even a loss on the sale of these loans. In addition, any
increase in interest rates will increase the cost of maintaining our warehouse
and repurchase lines of credit on which we depend to fund the loans we
originate. The interest direct margin earned on loans held-for-sale
significantly benefited from the spread between long-term and short-term
interest rates starting in 2001 and continuing through the second quarter of
2003.  Based on historical trends, we would not expect the same level of benefit
from interest rate spreads in a normal market. We have implemented a hedging
program to manage the risk of loss due to fluctuations in interest rates, but
our hedging efforts may not be successful, and no hedging strategy can
completely eliminate interest rate risk. A sharp decrease in interest rates over
a short period may cause customers who have interest rates on mortgage loans
committed through us to either delay closing their loans or refinance with
another lender. If this occurs in significant numbers, it may have an adverse
effect on our business or quarterly results of operations.

Our Hedging Strategy May Not Succeed in Reducing Our
Exposure to Losses Caused by Fluctuations in Interest Rates

We attempt to manage our interest rate risk exposure
through hedging transactions using a combination of forward sales of mortgage-backed
securities and forward whole-loan sales to fix the sales price of loans
we expect to fund. An effective hedging strategy is complex, and we have limited
experience administering a hedging program. A successful hedging program depends
in part on our ability to properly estimate the number of loans that will
actually close and is subject to fluctuations in the prices of mortgage-backed
securities, which do not necessarily move in tandem with the prices of loans we
originate and close. To the extent that we implement a hedging strategy but are
unable to effectively match our purchases and sales of mortgage-backed
securities with the sale of the closed loans we have originated, our gains on
sales of mortgage loans will be reduced, or we will experience a net loss on
those sales. In addition, we currently do not hedge the interest rate exposure
related to our auto loan approvals.  Approved auto loan applicants are provided
a guaranteed rate for up to a 45 day period.  Based upon a variety of factors,
we determined that the cost to hedge the potential interest rate risk was not
proportional to the benefit derived.  In the event we experience dramatic
increases in short term (generally two year term) interest rates, it is possible
that we could experience a net loss on those loan approvals.

Uncertainty With Respect to the Time It Takes to Close
Mortgage Loans Can Lead to Unpredictable Revenue and Profitability

The time between the date an application for a mortgage
loan is received from a customer and the date the loan closes can be lengthy and
unpredictable. The loan application and approval process is often delayed due to
factors over which we have little or no control, including the timing of the
customer's decision to commit to an available interest rate, the close of escrow
date for purchase loans, the timeliness of appraisals and the adequacy of the
customer's own disclosure documentation. Purchase mortgage loans generally take
longer to close than refinance loans as they are tied to the close of the
property sale escrow date. This uncertain timetable can have a direct impact on
our revenue and profitability for any given period. We may expend substantial
funds and management resources supporting the loan completion process and never
generate revenue from closed loans. Therefore, our results of operations for a
particular period may be adversely affected if the mortgage loans applied for
during that period do not close in a timely manner or at all.

We Have Recently Experienced Significant Growth in Our
Business, and If We Are Unable to Manage this Growth, Our Business Will Be
Adversely Affected

Over the past two years we have experienced significant
growth, which has placed a strain on our resources and will continue to do so in
the future. Our failure to manage this growth effectively could adversely affect
our business. We may not be successful in managing or expanding our operations
or maintaining adequate management, financial and operating systems and
controls. Our headcount has grown substantially. At June 30, 2002 and 2003, we
had 524 and 762 full-time employees, respectively.

Our Future Success is Dependent Upon Increased Acceptance
of the Internet by Consumers and Lenders as a Medium for Lending

Our success will depend in large part on widespread
consumer acceptance of obtaining mortgage and auto loans online. Increased
consumer use of the Internet to provide for their lending needs is subject to
uncertainty. The development of an online market for mortgage and auto loans has
only recently begun, is rapidly evolving and likely will be characterized by an
increasing number of market entrants. If consumer acceptance of the Internet as
a source for mortgage, home equity and auto loans does not increase, our
business, results of operations and financial condition will be adversely
affected. A number of factors may inhibit Internet usage by consumers, including
privacy and security concerns regarding their personal information.  The
adoption of online lending requires the acceptance of a new way of conducting
business, exchanging information and applying for credit by consumers that have
historically relied upon traditional lending methods.  As a result, we cannot be
sure that we will be able to compete effectively with traditional borrowing and
lending methods.

The Loss of Our Marketing Agreements Could Adversely
Affect Our Business

We rely on Internet marketing agreements with other
companies to direct a significant number of prospective customers to our
website. During the three months ended June 30, 2003, in the aggregate,
approximately 32%, 26% and 67% of our mortgage, home equity and auto loan
applications, respectively, were derived from Internet marketing agreements. Our
marketing agreements are typically short-term, less than one year in length, and
most can be terminated for any reason upon 30 to 60 days prior written notice.
We cannot assure you that any or all of these agreements will not be terminated
or will be renewed or extended past their current expiration dates. If a number
of our significant marketing agreements were to be terminated or were to lapse
without extension, we could lose a considerable number of loan applications and
our business could be adversely affected.

The Termination of One or More of Our Mortgage Funding
Sources Would Adversely Affect Our Business

We depend on GMAC Bank, formerly GE Capital Mortgage
Services, Inc. ("GMAC Bank"), Greenwich Capital Financial Products, Inc.
("Greenwich Capital") and Residential Funding Corporation to finance our self-
funded mortgage loan activities through the warehouse credit facilities they
provide. If any of these warehouse credit facilities becomes unavailable, our
business would be adversely affected. Under our agreements with each of these
lenders, we make extensive representations, warranties and various operating and
financial covenants. A material breach of these representations, warranties or
covenants on any of our lines could result in the termination of our agreements
and an obligation to repay all amounts outstanding at the time of termination.
In the past, we have had to obtain waivers from our warehouse lenders as a
result of our failure to comply with covenants regarding the issuance of capital
stock, excess asset purchases and our failure to meet financial ratios. More
recently, we obtained a waiver from one of our warehouse lenders due to the
violation of a current ratio covenant for the months ended April 30 and May 31,
2003. Our agreement with Greenwich Capital expires in March 2004, our agreement
with GMAC Bank expires in September 2003 and our agreement with Residential
Funding Corporation expires on December 31, 2003. Upon expiration of these
agreements management believes it will either renew its existing warehouse
credit facilities or obtain sufficient additional credit facilities.  However,
we cannot assure you that these agreements will be renewed or extended past
their current expiration dates, and additional sources of funding for our
mortgage loans may not be available on favorable terms or at all.

The Termination of Our Auto Line of Credit
Would Adversely Affect Our Business

We have obtained a line of credit from Merrill Lynch
Mortgage Capital Inc. to finance the funding of our auto loans, and this is our
sole facility for auto loan fundings.  If this credit facility becomes
unavailable, our business could be adversely affected. Under our line of credit
agreement, we make extensive representations, warranties and various operating
and financial covenants. A material breach of these representations, warranties
or covenants could result in the termination of the facility and an obligation
to repay all amounts outstanding at the time of termination. In the past we have
had to obtain waivers from our previous auto line of credit provider (Bank One,
N.A.) as a result of our failure to comply with a covenant regarding a debt to
tangible net worth ratio.  Our line of credit with Merrill Lynch Mortgage
Capital Inc. expires July 13, 2004.  Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines.
However, we cannot assure you that this agreement will be renewed or extended
past its current expiration date, and additional sources of funding for our auto
loans may not be available on favorable terms or at all.

We Are Primarily Dependent on One Loan
Purchaser for All of Our Home Equity Business

In 2002, the majority of our home equity loans were
purchased by Wells Fargo Bank pursuant to a Home Equity Loan/Line Purchase
Agreement. If Wells Fargo Bank is unable or unwilling to purchase our home
equity loans, we may experience delays in our ability to accept or process home
equity loan applications until we are able to secure new sources of loan
purchasers. Sufficient additional sources of loan purchasers for our home equity
loans may not be available on favorable terms or at all.

We Are Dependent on a Limited Number of Auto Loan
Purchasers for Our Auto Loan Business

We currently sell the majority of our sub-prime auto
loans to three auto loan purchasers, Household Automotive Credit Corporation,
Triad Financial Corporation d.b.a. Roadloans and Transouth Financial Corporation.
In addition, we currently sell all of our prime auto loans to a
qualified special purpose entity (QSPE).  The QSPE is dependent on Merrill Lynch Bank USA
to provide the necessary financing to continue purchasing loans from us. If any
of the current auto loan purchasers are unable or unwilling to purchase our auto
loans, we may experience delays in our ability to accept or process auto loan
applications.

We Depend on the Timely and Competent Services of Various
Companies Involved in the Mortgage Process; If These Companies Fail to Timely
and Competently Deliver These Services, Our Business and Reputation Will be
Directly and Adversely Affected

We rely on other companies to perform services related to
the loan underwriting process, including appraisals, credit reporting and title
searches. Any interruptions or delays in the provision of these services may
cause delays in the processing and closing of loans for our customers. If we are
unsuccessful in managing the timely delivery of these services we will likely
experience increased customer dissatisfaction and our business and reputation
could be adversely affected.

The Loss of Our Relationship with Any of Our Significant
Providers of Automated Underwriting Would Have an Adverse Effect on Our
Business

We depend on automated underwriting and other services
offered by government sponsored and other mortgage investors, including Fannie
Mae and Freddie Mac ("Agencies"), to help ensure that our mortgage services can
be offered efficiently and on a timely basis. We currently have an agreement
with the Agencies that authorizes our use of their automated underwriting
services and enables us to sell qualified first mortgages to these Agencies. We
cannot assure you that we will remain in good standing with the Agencies or that
the Agencies will not terminate our relationship. We expect to continue to
process a significant portion of our conforming mortgage loans using the
Agencies' systems. Our agreement with the Agencies can be terminated by either
party. The termination of our agreements with the Agencies would adversely
affect our business by reducing our ability to streamline the mortgage
origination process.

Any Outages, Delays or Other Difficulties Experienced by
the Internet Service Providers, Online Service Providers or Other Website
Operators on Which Our Users Depend Could Adversely Affect Our Business

Our website has in the past and may in the future
experience slower response times or decreased traffic for a variety of reasons.
In addition, our users depend on Internet service providers, online service
providers and other website operators for access to our websites. Many Internet
users have experienced significant outages in the past, and could experience
outages, delays and other difficulties due to system failures unrelated to our
systems. Additionally, the Internet infrastructure may not be able to support
continued growth in its use. Any of these problems could adversely affect our
business.

Our Business Will be Adversely Affected if We Are Unable
to Safeguard the Security and Privacy of Our Customers' Financial Data

Internet usage could decline if any well-publicized
compromise of security occurred. We may incur significant costs to protect
against the threat of security breaches or to alleviate problems caused by any
breaches that occur. We also retain on our premises personal financial documents
that we receive from prospective borrowers in connection with their loan
applications. These documents are highly sensitive and if a third party were to
misappropriate our customers' personal information, customers could possibly
bring legal claims against us. We cannot assure you that our privacy policy will
be deemed sufficient by our prospective customers or compliant with any federal
or state laws governing privacy, which may be adopted in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

Interest rate movements significantly impact our volume
of closed loans and represent the primary component of market risk to us. In a
higher interest rate environment, consumer demand for mortgage loans,
particularly refinancing of existing mortgages, declines. Interest rate
movements affect the interest income earned on loans held for sale, interest
expense on the warehouse lines payable, the value of mortgage loans held for
sale and ultimately the gain on sale of mortgage loans.

We attempt to minimize the interest rate risk associated with
the time lag between when loans are rate-locked and when they are committed for
sale or exchanged in the secondary market, through our hedging activities.
Individual mortgage loan risks are aggregated by loan type and pipeline
production status, and are then matched, based on duration, with the appropriate
hedging instrument, thus mitigating basis risk until closing and delivery. We
currently hedge our mortgage pipeline through mandatory forward sales of Fannie
Mae mortgage-backed securities and both mandatory and non-mandatory forward loan
sale agreements with the ultimate investor. We determine which alternative
provides the best execution in the secondary market.  In addition, we do not
believe our net interest income would be materially affected as a result of
concurrent changes in long-term and short-term interest rates due to the short
duration of time loans are held on the balance sheet prior to being sold
(typically under thirty days).

We believe that we have implemented a cost-effective hedging
program to provide a high level of protection against changes in the market
value of rate-lock commitments. However, an effective strategy is complex and no
hedging strategy can completely insulate the Company against such changes.

ITEM 4. CONTROLS AND PROCEDURES

As of June 30, 2003, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in Exchange Act Rule 13a-14(c)).
Based upon that evaluation, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company that is required to be included in the Company's
periodic filings with the Securities and Exchange Commission. There have been no
significant changes in the Company's internal controls or, to the Company's
knowledge, in other factors that could significantly affect those internal
controls subsequent to the date the Company carried out its evaluation, and
there have been no corrective actions with respect to significant deficiencies
and material weaknesses.

The Company's management, including the Chief Executive
Officer and Chief Financial Officer, do not expect that the Company's disclosure
controls or internal controls will prevent all error and all fraud.  A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected.  These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate.  Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

The Company has been named as a defendant in
five related lawsuits filed in the Federal District Court for the Southern
District of New York between August 10, 2001 and September 25, 2001. The
lawsuits purport to be class actions filed on behalf of the plaintiffs and
others similarly situated. They name as defendants the Company, Christian
Larsen, Janina Pawlowski, Frank Siskowski, The Goldman Sachs Group, Inc.,
FleetBoston Robertson Stephens, Inc., Merrill Lynch Pierce Fenner & Smith,
Inc., Credit Suisse First Boston Corp. and J.P. Morgan Chase & Co., some of
which were involved in our initial public offering. The complaints have since
been consolidated into a single action. The Consolidated Amended Complaint
alleges, among other things, that the underwriters of our initial public
offering violated Section 12(a) of the Securities Act of 1933 by receiving
excessive and undisclosed commissions and fees, and by entering into unlawful
private agreements with brokers' customers, and that all defendants violated
Section 11 of the Securities Act of 1933, and Section 10(b) and Rule 10b-5 under
the Securities Exchange Act of 1934 by making material false and misleading
statements in our initial public offering prospectus concerning brokers'
commissions and private agreements with brokers' customers. The plaintiffs seek
to recover damages on behalf of all those who purchased or otherwise acquired
the Company's securities during the respective class period.  Similar complaints
have been filed against over 300 other issuers that have had initial public
offerings since 1998 and all such actions have been included in a single
coordinated proceeding.  In July 2002, the Company and the other issuers in the
consolidated cases filed motions to dismiss the amended complaints for failure
to state a claim, which was denied as to the Company on February 19, 2003. On
October 9, 2002, the Company's individual defendants were dismissed, without
prejudice, from the lawsuit, pursuant to a stipulated agreement with the
plaintiffs.

On June 25, 2003, a committee of the Company's Board of
Directors conditionally approved a proposed partial settlement with the
plaintiffs in this matter. The settlement would provide, among other things, a
release of the Company and of the individual defendants for the conduct alleged
to be wrongful in the Amended Complaint.  The Company would agree to undertake
other responsibilities under the partial settlement, including agreeing to
assign away, not assert, or release certain potential claims the Company may
have against its underwriter  defendants.  Any direct financial impact of the
proposed settlement is expected to be borne by the Company's insurers.   The
committee agreed to approve the settlement subject to a number of conditions,
including the participation of a substantial number of other issuer defendants
in the proposed settlement, the consent of the Company's insurers to the
settlement, and the completion of acceptable final settlement documentation.
Furthermore, the settlement is subject to a hearing on fairness and approval by
the Court overseeing the litigation. Due to the inherent uncertainties of
litigation, and because the settlement process is still at a preliminary stage,
the ultimate outcome of this matter cannot be predicted.

The Company is subject to various other legal proceedings and
claims, either asserted or unasserted, which arise in the ordinary course of
business. While the outcome of these claims cannot be predicted with certainty,
management does not believe that the outcome of any of these legal matters will
have a material adverse effect on the Company's results of operations, financial
position or liquidity.

Item 2. Changes in Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security
Holders

At the Company's Annual Meeting of Stockholders held on May 13, 2003 the
following proposals were adopted by the margins indicated:

|                                                                                                                                                                                 | Number of Shares
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------
|                                                                                                                                                                                 | Voted For       
|1.	To elect two Class I Directors to hold office until the
Annual Meeting of Stockholders to be held in 2006 or until their respective
successors have been elected or appointed |                 
|Wade Randlett                                                                                                                                                                    | 48,429,839      
|Claus H. Lund                                                                                                                                                                    | 48,180,589      
|                                                                                                                                                                                 |                 
|                                                                                                                                                                                 |                 
|The following directors continued in office: Robert C. Kagle,
Joseph J. Kennedy, Christian A. Larsen, Mark E. Lefanowicz                                                        
|                                                                                                                                                                                 |                 
|                                                                                                                                                                                 | Number of Shares
|2. 	To ratify the appointment of the accounting firm of
PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending
December 31, 2003                          | Voted For       
|                                                                                                                                                                                 | 49,468,732      



Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

(a)    Exhibits:

|3.1   | Restated Certificate of Incorporation of E-LOAN dated
July 2, 1999 (1)                                                                                   
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2   | Corrected Certificate of Amendment of Restated
Certificate of Incorporation of E-LOAN, Inc. dated February 15, 2001
(2)                                  
|3.3   | Amended and Restated Bylaws of E-LOAN, Inc. dated March
16, 2001 (2)                                                                                     
|10.9  | Second Amendment to Loan Agreement with Merrill Lynch Mortgage Capital Inc.
dated June 3, 2003      !!                                                   
|10.10 | Second Amendment to Credit Agreement with E-LOAN Auto Fund One LLC and
Merrill Lynch Bank USA dated June 3, 2003      !!                                 
|10.11 | Fifteenth Modification Agreement with GMAC Bank dated June 18, 2003      !!                                                                              
|10.12 | Fourth Amended and Restated Note in favor of GMAC Bank dated June 18, 2003      !!                                                                       
|10.13 | Sublease with Charles Schwab & Co., Inc. dated June 20, 2003      !!                                                                                     
|10.14 | Credit Agreement with Wells Fargo Bank, National Association dated June 30, 2003      !!                                                                 
|10.15 | Line of Credit Note in favor of Wells Fargo Bank, National Association dated
June 30, 2003      !!                                                       
|10.16 | Security Agreement with Wells Fargo Bank, National Association dated June
30, 2003*       !!                                                             
|10.17 | Amendment Number Six to the Master Loan and Security Agreement with
Greenwich Capital Financing Products, Inc. dated June 30, 2003      !!               
|10.18 | Promissory Note in favor of Greenwich Capital Financing Products, Inc. dated
June 30, 2003       !!                                                      
|10.19 | Third Amendment to Loan Agreement with Merrill Lynch Mortgage Capital Inc.
dated July 14, 2003       !!                                                  
|10.20 | Third Amendment to Credit Agreement with E-LOAN Auto Fund One LLC and
Merrill Lynch Bank USA dated July 14, 2003      !!                                 
|10.21 | Second Amendment to Servicing and Custodian Agreement with E-LOAN Auto Fund
One LLC and Systems & Services Technologies, Inc. dated July 14, 2003
     !!
|10.22 | First Amendment to Warehouse Credit and Security Agreement with Residential
Funding Corporation dated July 14, 2003      !!                              
|31.1  | Chief Executive Officer Certification of Periodic Financial Report
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002#                            
|31.2  | Chief Financial Officer Certification of Periodic Financial Report Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002#                            
|32.1  | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002+          
|32.2  | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002+          



(1) Incorporated by reference to Exhibit 3.1 of the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000, filed on August 14, 2000.

(2) Incorporated by reference to Exhibit 3.2 of the Company's
Amendment to its Annual Report on Form 10-K/A for the fiscal year ended December
31, 2000, filed on April 23, 2001.

(3) Incorporated by reference to  Exhibit 3.3 of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2002, filed on March 31,
2003.

* Confidential Treatment Requested

# Filed herewith

+ Furnished herewith

!! Also Furnished in PDF as a courtesy



(b)    Reports on Form 8-K

The Company filed three reports on Form 8-K during the three months ended
June 30, 2003. The first filed on April 4, 2003 for the purpose of reporting
under Item 5 thereof the renewal of its warehouse line of credit facility and
the addition of a new warehouse line of credit facility. The second filed on
April 29, 2003 for the purpose of reporting under Item 9 and Item 12 thereof the
results of its first quarter financial results. The third filed on June 23, 2003
for the purpose of reporting under Item 9 and Item 12 thereof the increase of
its financial guidance for the second quarter of 2003 and the fiscal year
2003.

---



SIGNATURES

Pursuant to the requirement of the Security Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |             
| | ------------
| | E-LOAN, INC.

Dated: August 13, 2003



| |                                                                          |                    
| | ------------------------------------------------------------------------ | -------------------
| | By:                                                                      | /s/ Matthew Roberts
| | Matthew Roberts                                                         
| | Chief Financial Officer                                                 
| | (Principal Financial and Accounting Officer and Duly
Authorized Officer)

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