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 March 31, 2002 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 100Dublin, 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 reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [  ]

As of May 1, 2002, 58,991,960 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 MARCH 31, 2002
                                TABLE OF CONTENTS



|PART I.   FINANCIAL INFORMATION                                                                                       | Page No.
|--------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                      |         
|Item 1.   Interim Financial Statements
                  (unaudited):                                                 |         
|                                                                                                                      |         
|Balance Sheets as of December 31, 2001 and March 31, 2002                                                             | **      
|                                                                                                                      |         
|Statements of Operations for the
    three months ended March 31, 2001 and 2002                                       | **      
|                                                                                                                      |         
|Statements of Cash Flows for the
    three months ended March 31, 2001 and 2002                                       | **      
|                                                                                                                      |         
|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                                                  | **      
|                                                                                                                      |         
|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, EXCEPT PER SHARE AMOUNTS)

---

`December 31,  March 31,
                                                                                   2001         2002
                                                                                -----------  -----------
                                                                                             (unaudited)
ASSETS
Current assets:
    Cash and cash equivalents (includes $4,500 and $2,500 of restricted cash). $    32,538  $    27,964
    Loans held-for-sale.......................................................     162,246       97,275
    Accounts receivable, prepaids and other current assets....................       8,435       13,456
                                                                                -----------  -----------
          Total current assets................................................     203,219      138,695
Fixed assets, net.............................................................       6,215        6,147
Deposits and other assets.....................................................       1,192        1,897
                                                                                -----------  -----------
           Total assets....................................................... $   210,626  $   146,739
                                                                                ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Warehouse and other lines payable......................................... $   158,148  $    93,879
    Accounts payable, accrued expenses and other current liabilities..........       7,535        6,322
    Capital lease obligation, current portion.................................         175          132
    Notes payable.............................................................         --         5,000
                                                                                -----------  -----------
           Total current liabilities..........................................     165,858      105,333
Notes payable, long term......................................................       5,000          --
                                                                                -----------  -----------
           Total liabilities..................................................     170,858      105,333
                                                                                -----------  -----------
Commitments and contingencies (Note 10):
Stockholders' equity:
    Preferred stock, 5,000,000 $0.001 par value shares authorized at
      December 31, 2001 and March 31, 2002; 0 shares issued and
      outstanding at December 31, 2001 and March 31, 2002.....................         --           --
    Common stock, 150,000,000 $0.001 par value shares authorized at
      December 31, 2001 and March 31, 2002; 54,010,151 and
      54,045,310 shares issued and outstanding at December 31, 2001
      and March 31, 2002......................................................          54           55
Additional paid-in capital....................................................     256,578      256,611
Accumulated deficit...........................................................    (216,864)    (215,260)
                                                                                -----------  -----------
           Total stockholders' equity.........................................      39,768       41,406
                                                                                -----------  -----------
           Total liabilities and stockholders' equity......................... $   210,626  $   146,739
                                                                                ===========  ===========`

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

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

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`Three Months Ended
                                                                March 31,
                                                            2001         2002
                                                         -----------  -----------
Revenues (Note 8)...................................... $    16,367  $    20,766

Operating expenses:
    Operations.........................................      11,488       10,852
    Sales and marketing................................       4,831        5,137
    Technology.........................................       1,783        1,429
    General and administrative.........................       1,488        1,633
    Amortization of non-cash marketing costs...........       2,985          --
    Amortization of unearned compensation..............         257          --
    Amortization of goodwill and intangible assets.....       9,933          --
                                                         -----------  -----------
           Total operating expenses....................      32,765       19,051
                                                         -----------  -----------
Income (loss) from  operations.........................     (16,398)       1,715
Other income, net......................................          84          (57)
                                                         -----------  -----------
Income (loss) before taxes............................. $   (16,314) $     1,658
Income taxes...........................................         --           (54)
                                                         -----------  -----------
Net income (loss)...................................... $   (16,314) $     1,604
                                                         ===========  ===========

Net income (loss) per share:
    Basic.............................................. $     (0.30) $      0.03
                                                         ===========  ===========
    Diluted............................................ $     (0.30) $      0.03
                                                         ===========  ===========

    Weighted-average shares - basic....................      53,623       54,029
                                                         ===========  ===========
    Weighted-average shares - diluted..................      53,623       60,317
                                                         ===========  ===========`

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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`Three Months Ended
                                                                        March 31,
                                                                    2001         2002
                                                                 -----------  -----------
Cash flows from  operating activities:
   Net income (loss)........................................... $   (16,314) $     1,604
   Adjustments to reconcile net income (loss) to net cash
     (used in) provided by operating activities:
     Amortization of unearned compensation.....................         257          --
     Amortization of goodwill and intangible assets............       9,933          --
     Non-cash marketing costs..................................       2,985          --
     Depreciation and amortization of fixed assets.............         954          953
     Changes in operating assets and liabilities:
       Loans held-for-sale.....................................     (14,022)      64,971
       Accounts receivable, prepaids, deposits
         and other assets......................................      (1,861)      (5,726)
       Accounts payable, accrued expenses and
         other payables........................................        (695)      (1,213)
                                                                 -----------  -----------
         Net cash (used in) provided by operating activities...     (18,763)      60,589
                                                                 -----------  -----------
Cash flows from investing activities:
   Acquisition of fixed assets.................................        (695)        (885)
                                                                 -----------  -----------
         Net cash used in investing activities                         (695)        (885)
                                                                 -----------  -----------
Cash flows from financing activities:
   Proceeds from issuance of common stock, net.................          73           34
   Proceeds from notes payable.................................       5,000          --
   Repayments of notes payable.................................        (292)         --
   Proceeds from warehouse and other lines payable.............     497,440    1,051,457
   Repayments of warehouse and other lines payable.............    (486,308)  (1,115,726)
   Payments on obligations under capital leases, net...........        (113)         (43)
                                                                 -----------  -----------
         Net cash provided by (used in) financing activities...      15,800      (64,278)
                                                                 -----------  -----------
Net decrease in cash...........................................      (3,658)      (4,574)
Cash and cash equivalents, beginning of period.................      28,459       32,538
                                                                 -----------  -----------
Cash and cash equivalents, end of period....................... $    24,801  $    27,964
                                                                 ===========  ===========
Supplemental cash flow information:
   Cash paid for interest...................................... $     2,881  $     1,849
                                                                 ===========  ===========`

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
provider of first and second mortgage loans, home equity loans and home equity
lines of credit, auto loans, education loans and credit card referrals. The
Company operates as a single operating segment.

2.	BASIS OF PRESENTATION

Interim Financial Information (unaudited)

The accompanying financial statements as of March 31,
2001 and 2002 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 March 31, 2001 and 2002.
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, 2001. The results for the three
months ended March 31, 2002 are not necessarily indicative of the expected
results for the year ending December 31, 2002.

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.

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 and documentary drafts, 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 7, the Company must maintain a minimum cash and cash
equivalents balance of the higher of $15 million (including Restricted Cash,
excluding Documentary Drafts) or the highest amount required by any other lender
or agreement. The following summarizes cash and cash equivalents at December 31,
2001 and March 31, 2002 (dollars in thousands):

`December 31,  March 31,
                                                2001         2002
                                             -----------  -----------
Cash....................................... $     9,911  $    22,407
Commercial paper...........................      15,501          351
Documentary drafts.........................       2,626        2,706
Restricted cash............................       4,500        2,500
                                             -----------  -----------
                                            $    32,538  $    27,964
                                             ===========  ===========`

Documentary Drafts

The Company originates auto loans directly to consumers
through the use of a documentary draft process. This process requires the
borrower and the auto dealer to provide a series of supporting documents in
order to complete the loan. Examples of required supporting documentation
include copies of the borrower's driver's license, bill of sale, proof of
insurance, and application for title registration.

Documentary drafts consist of cash allocated to satisfy
documentary drafts presented by borrowers before the required supporting
documents are received by the Company to complete the loan. If the required
documentation is not provided as agreed to by the borrower and auto dealer, then
the allocation of cash is reversed and the cash balance is restored. The
Company's documentary draft process allows for at least two business days to
process the required supporting documentation prior to determining whether to
reverse or honor the original presentment by the auto dealer. All documentary
drafts are pledged as collateral for borrowings under the auto line of credit at
March 31, 2002 (see Note 7). Of the $2.7 million included in cash and cash
equivalents at March 31, 2002, $2.5 million converted to loans in April 2002.

Derivative instruments

On June 15, 1998, the FASB issued SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities. SFAS No. 133, as amended
by SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities and SFAS No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities, requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives will be recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is designated as
part of a hedge transaction and, if it is, the type of hedge transaction. The
Statements require entities that use derivative instruments to measure these
instruments at fair value and record them as assets and liabilities on the
balance sheet. Entities must reflect gains or losses associated with changes in
the fair value of these derivatives, either in earnings or as a separate
component of comprehensive income, depending on the nature of the underlying
contract or transaction. The Company adopted SFAS No. 133, as amended by SFAS
No. 137 and 138, on January 1, 2001. Adoption of this pronouncement resulted in
a transition adjustment of a $0.2 million gain, which was recorded as a
component of mortgage revenue. For the three months ended March 31, 2002, the
Company recorded $0.4 million as a component of mortgage revenue related to
recording changes in fair value of SFAS No. 133 derivatives for which the
Company did not elect SFAS No. 133 hedge accounting and underlying hedged loans
which did qualify for hedge accounting in accordance with SFAS No. 133.

Net Income (Loss) Per Share

The Company computes net income (loss) per share in
accordance with SFAS No. 128, Earnings per Share. Under the provisions of
SFAS No. 128 basic net income (loss) per share is computed by dividing the net income (loss)
available to common stockholders for the period by the weighted average number
of common shares outstanding during the period. Diluted net income (loss) per share is
computed by dividing the net income (loss) 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
                                                        March 31,
                                                    2001         2002
                                                 -----------  -----------
                                                     (In Thousands)
  Numerator:
    Net income (loss).......................... $   (16,314) $     1,604
    Interest expense from convertible note.....         --           139
                                                 -----------  -----------
    Net income (loss) assuming dilution........ $   (16,314) $     1,743
                                                 ===========  ===========
  Denominator:
    Weighted average shares, basic.............      53,623       54,029
    Effect of potentially dilutive securities:
      Convertible note.........................         --         4,717
      Warrants.................................         --            12
      Employee Stock Option Plan...............         --         1,559
                                                 -----------  -----------
    Weighted average number of shares
      assuming dilution........................      53,623       60,317
                                                 ===========  ===========

  Diluted net income (loss) per share.......... $     (0.30) $      0.03
                                                 ===========  ===========`

Recent Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board
("FASB") issued SFAS No. 141, Business Combinations and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 141, among other things,
eliminates the use of the pooling of interests method of accounting for business
combinations. Under the provisions of SFAS No. 142, goodwill will no longer be
amortized, but will be subject to a periodic test for impairment based upon fair
values. SFAS No. 141 is effective for all business combinations initiated after
June 30, 2001. SFAS No. 142 is effective beginning January 1, 2002. The adoption
of these statements had no effect on the Company's financial statements.

4. 	ACCOUNTS RECEIVABLE, PREPAIDS AND OTHER CURRENT ASSETS

Accounts Receivable, Prepaids and Other Current Assets as
of December 31, 2001 and March 31, 2002, was $8.4 million and $13.5 million,
respectively. This balance consists primarily of 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 $3.1
million and $7.3 million at December 31, 2001 and March 31, 2002, respectively
(see Note 7).

5.	LOANS HELD-FOR-SALE

The inventory of mortgage loans consists primarily of
first and second trust deed mortgages on residential properties located
throughout the United States. As of December 31, 2001 and March 31, 2002, the
Company had net mortgage loans held-for-sale of $159.7 million and $89.7
million, all of which are on accrual basis. All mortgage loans held-for-sale are
pledged as collateral for borrowings at December 31, 2001 and March 31, 2002
(see Note 7).

The inventory of auto loans consists primarily of loans
against new and used automobiles located throughout the United States. As of
December 31, 2001 and March 31, 2002, the Company had loans held-for-sale of
$2.5 and $7.6 million, all of which are on accrual basis. All of the auto loans
held-for-sale were pledged as collateral for borrowings at
December 31, 2001 and March 31, 2002 (see Note 7).

6.	NOTES PAYABLE

On April 2, 2001, the Company entered into a loan
agreement with Christian A. Larsen, the Company's Chairman of the Board and
Chief Executive Officer, that provided the Company with the ability to draw
funds up to an aggregate of $7.5 million upon demand, expiring January 5, 2002.
The borrowings had an interest rate of the lower of 12% or the maximum legal
rate allowed. Additionally, under the terms of the loan agreement with Mr.
Larsen, if the Company at any time prior to January 5, 2002 secured any new
equity or any subordinated debt with repayment terms later than January 5, 2002,
then the loan commitment under the loan agreement would be reduced, dollar-for-dollar,
by the amount of such equity or subordinated debt. Thus, upon the sale
of a $5 million convertible note to Charles Schwab Co., Inc., the loan
commitment under the loan agreement was reduced to $2.5 million. The loan
agreement expired on January 5, 2002.

On July 12, 2001, the Company sold a $5 million convertible
note to Charles Schwab Co., Inc., which is convertible into shares of its common
stock at a conversion price of $1.06 per share and which matures on January 19,
2003. The convertible note bears interest at a rate of 8% per annum and is
payable quarterly. On March 14, 2002, the Company elected to redeem the note
prior to its maturity date. On April 12, 2002, the Charles Schwab Corporation
exercised its option to convert the amount due to 4,716,981 shares of common
stock, in lieu of payment. The convertible note was canceled and no amounts are
owing thereunder.

7.	WAREHOUSE AND OTHER LINES PAYABLE

As of March 31, 2002, the Company had a warehouse line of
credit for borrowings of up to $50 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 rates. Borrowings are
collateralized by the related mortgage loans held-for-sale. At December 31, 2001
and March 31, 2002 approximately $47.8 million and $41.0 million was outstanding
under this line, respectively. 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 (excluding Documentary Drafts). The Company was in compliance with
these covenants during the three months ended and at March 31, 2002. The
committed line of credit was renewed on March 28, 2002 and will expire on March
31, 2003. Upon expiration, management believes it will either renew its existing
line or obtain sufficient additional lines.

As of March 31, 2002, the Company had an agreement to finance
up to $300 million of mortgage loan inventory pending sale of these loans to the
ultimate mortgage loan investors with Greenwich Capital. Of this amount, $150
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. At
December 31, 2001 and March 31, 2002 there was $104.9 million and $45.4 million
outstanding under this financial commitment. This agreement includes various
financial and non-financial covenants. In particular, the Company must maintain
a minimum cash and cash equivalents balance of $15 million (including Restricted
cash, excluding Documentary drafts) and the highest amount required by any other
lender or agreement. The Company was in compliance with these covenants during
the three months ended March 31, 2002. The line was renewed on March 21,
2002 and will expire on March 21, 2003. Upon expiration, management believes it
will either renew its existing line or obtain sufficient additional lines.

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. Revenue
derived from sales under this agreement are included as a receivable on the
balance sheet (see Note 4).

On April 1, 2001, the Company entered into an agreement for a
$25 million line of credit for the interim financing of auto loans. The interest
rate charged on this line is based on LIBOR plus 2.5%. This committed line was
reduced to $10 million on April 1, 2002 and expires on July 31, 2002. Upon
expiration, management believes it will obtain sufficient additional lines. At
March 31, 2002, approximately $7.5 million was outstanding under this line. This
line includes various financial and non-financial covenants. At March 31, 2002,
the Company was not in compliance with a debt to tangible net worth covenant
ratio and subsequently obtained a waiver from the lender.

8.	REVENUES AND OTHER INCOME, NET

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

`Three Months Ended
                                                     March 31,
                                                 2001       2002
                                               ---------  ---------
Revenues:
   Mortgage.................................. $   7,215  $  12,815
   Interest income on mortgage loans.........     2,943      2,991
   Interest income on home equity loans......        84        237
   Home equity...............................       622      2,284
   Auto......................................     5,281      2,291
   Other.....................................       222        148
                                               ---------  ---------
         Total revenues...................... $  16,367  $  20,766
                                               =========  =========`

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

`Three Months Ended
                                                     March 31,
                                                 2001       2002
                                               ---------  ---------
Interest on short-term  investments.......... $     156  $      85
Interest expense on non-warehouse
   facility borrowings.......................       (74)      (142)
Equity investment gain/(loss)................         5        --
Other........................................        (3)       --
                                               ---------  ---------
                                              $      84  $     (57)
                                               =========  =========`

9.	OPERATING EXPENSES

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

`Three Months Ended
                                                     March 31,
                                               --------------------
                                                 2001       2002
                                               ---------  ---------
Compensation and benefits.................... $   7,032  $   9,222
Processing costs.............................     1,641        536
Advertising and marketing....................     4,356      4,216
Professional services........................     1,139        735
Occupancy costs..............................       905        914
Computer and internet........................       305        287
General and administrative...................     1,331      1,431
Interest expense on warehouse borrowings.....     2,881      1,710
Amortization of unearned compensation........       257        --
Amortization of goodwill and intangible
   assets....................................     9,933        --
Non-cash marketing costs.....................     2,985        --
                                               ---------  ---------
         Total operating expenses............ $  32,765  $  19,051
                                               =========  =========`

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
                                             March 31,
                                          2001       2002
                                        ---------  ---------
Mortgage ............................. $   5,076  $   5,849
Interest expense on mortgage loans....     2,716      1,512
Interest expense on home equity loans.       165        110
Home equity...........................       385      1,331
Auto..................................     3,114      2,013
Other.................................        32         37
                                        ---------  ---------
Total operations...................... $  11,488  $  10,852
                                        =========  =========`

10.	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

At March 31, 2002, the Company was 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. Rate locks with the
borrowers are on a best effort basis, borrowers are not obligated to enter into
the loan agreement. A rate lock, which does not result in a funded loan, is
referred to as fallout. As the Company is exposed to movements in interest rates
after entering into rate locks, the Company must estimate fallout if interest
rate risk is to be economically hedged with a mandatory sell forward agreement.
At March 31, 2002, the Company had provided locks to originate loans amounting
to approximately $298.9 million (the "locked pipeline").

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.

The Company retains the services of Tuttle Risk Management
Services, Inc. ("TRMS"), an unaffiliated advisory firm specializing in mortgage
loan pipeline management to assist the Company in minimizing 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. Individual
mortgage loan risks are aggregated by note rate, mortgage loan type and stage in
the pipeline, and are then matched, based on duration, with the appropriate
hedging instrument, thus

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 March 31, 2002, the Company had entered into mandatory
sell forward commitments amounting to approximately $97.0 million. The Company
adjusts the amount of mandatory sell forward commitments held to offset changes
in the locked pipeline and changes in the market. During the three months ended
March 31, 2002, the Company did not designate mandatory sell forward commitments
as FAS 133 hedges. At March 31, 2002, the Company had entered into $64.5 million
of commitments with third party investors to deliver loans related to funded
loans held for sale.

At March 31, 2002, the Company had entered into non-mandatory
forward loan sale agreements amounting to approximately $188.5 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. The Company designates all non-
mandatory forward sale agreements as fair value FAS 133 hedges for underlying
loans at funding. The Company designates as a fair value FAS 133 hedge at
commitment date loans held for sale, where the Company intends to deliver the
underlying loan into the commitment ("delivery commitment"). 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 months ended March 31, 2002.

Future Commitments

The Company has future payment commitments for
leases and marketing services agreements aggregating $1.1 million and $0.1
million for the years 2002 and 2003, respectively.

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 an online lender whose revenues are
derived primarily from the commissions and fees earned from mortgage, home
equity and auto loans that it underwrites, funds and sells on the secondary
market.

Mortgage Revenues

The Company's mortgage revenues are derived from
the origination and sale of self-funded loans and, to a lesser extent, from the
brokering of loans. Brokered loans are funded through lending partners and the
Company never takes title to the mortgage. Brokerage revenues are comprised of
the mark-up to the lending partner's loan price and processing fees. These
revenues are recognized at the time a loan is closed. In October 1998, the
Company began funding its mortgage loans using warehouse lines of credit. 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,
origination fees less certain direct origination costs and other processing
fees. These revenues are recognized at the time the loan is sold. The Company
earns additional revenue from its self-funded loans as compared to brokered
loans because the sale of loans includes a service release premium. Self-funded
loans generated 99% of mortgage revenues in the three months ended March 31,
2002.

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

In the fourth quarter of 2000, the Company began self-funding
home equity loans and selling them to home equity loan purchasers. 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 thirty 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.
Self-funded loans generated 94% of home equity revenues in the three months
ended March 31, 2002.

Auto Revenues

The Company's auto revenues are derived from the origination
and sale of self-funded loans and from the brokering of auto loans. Auto
brokerage revenues are primarily comprised 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 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. Self-funded loans generated
86% of auto revenues in the three months ended March 31, 2002.

Other Revenues

Other revenues are derived from the fees paid by various partners in
exchange for consumer loan referrals. The current loan programs offered include
credit card and education loans. Other revenues generated approximately 1% of
total revenue in the three months ended March 31, 2001 and 2002.

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
                                                                 March 31,
                                                            2001         2002
                                                         -----------  -----------
Revenues ..............................................         100%         100%

Operating expenses:
    Operations.........................................          70%          52%
    Sales and marketing................................          30%          25%
    Technology.........................................          11%           7%
    General and administrative.........................           9%           8%
    Amortization of non-cash marketing costs...........          18%         --
    Amortization of unearned compensation..............           2%         --
    Amortization of goodwill and intangible assets.....          61%         --
                                                         -----------  -----------
           Total operating expenses....................         201%          92%
                                                         -----------  -----------
Income (loss) from  operations.........................        -101%           8%
Other income, net......................................           1%         --
                                                         -----------  -----------
Income (loss) before taxes.............................        -100%           8%
Income taxes...........................................         --           --
                                                         -----------  -----------
Net income (loss)......................................        -100%           8%
                                                         ===========  ===========`

Revenues

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

`Three Months Ended
                                                     March 31,
                                                 2001       2002
                                               ---------  ---------
Revenues:
   Mortgage..................................        44 %       62 %
   Interest income on mortgage loans.........        18 %       14 %
   Interest income on home equity loans......         1 %        2 %
   Home equity...............................         4 %       11 %
   Auto......................................        32 %       11 %
   Other.....................................         1 %      --  %
                                               ---------  ---------
         Total revenues......................       100 %      100 %
                                               =========  =========`

Revenues increased $4.4 million to $20.8 million for the
three months ended March 31, 2002 from $16.4 million for the three months ended
March 31, 2001. A significant portion of these increases resulted from growth in
the dollar volume of mortgage and home equity loans closed and sold. Home equity
operations commenced in the fourth quarter of 2000, whereas mortgage revenues
benefited from an overall increase in loan volume. Refinance mortgage accounted
for 85% of mortgage closed loan volume in the first quarter of 2002 as compared to 83% in
the first quarter of 2001. E-LOAN expects mortgage revenues to decrease in the
near future, as a result of the decline in refinance activity, and we expect
that home equity revenues will continue to grow in the near future as volumes
increase. Auto revenues decreased from $5.3 million for the three months ended
March 31, 2001 to $2.3 million for the three months ended March 31, 2002. The
decline is largely attributed to strong competition from the auto manufacturers
in the form of widely available incentive financing rates, such as 0% interest
rate specials. E-LOAN expects auto revenues to increase moderately in the near
future as we expect that the use of manufacturer incentive financing will
abate.

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
                                           March 31,
                                       2001       2002
                                     ---------  ---------
Mortgage
$ Volume                            $ 555,434  $ 916,802
Revenue                             $   7,215  $  12,815
BPS                                       130        140

Home Equity
$ Volume                            $  32,208  $  97,648
Revenue                             $     622  $   2,284
BPS                                       193        234

Auto
$ Volume                            $ 303,449  $ 140,464
Revenue                             $   5,281  $   2,291
BPS                                       174        163`

The following table illustrates 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 March 31, 2002:



|E-LOAN
Purchase
Refinance       | 1999
63%
37% | 2000
61%
39% | 2001
16%
84% | Q1 02
15%
85%
|------------------------------- | ------------ | ------------ | ------------ | -------------
|Total Market
Purchase
Refinance | 1999
66%
34% | 2000
81%
19% | 2001
43%
57% | Q1 02
45%
55%

Operating Expenses

Total Operating Expenses. Total operating expenses
decreased $13.7 million to $19.0 million for the three months ended March 31,
2002 from $32.7 million for the three months ended March 31, 2001. The decrease
was primarily due to decreases in amortization of goodwill, amortization of non-cash marketing
costs, processing costs and interest expense on warehouse
borrowings, off-set by increases in compensation and benefits.

Operations. Operations expense is
comprised of both fixed and variable expenses, including employee compensation
and expenses associated with the production and sale of loans and interest
expense paid by E-LOAN under the warehouse and line of credit facilities it uses
to fund mortgage, home equity and auto loans held for sale.

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

`Three Months Ended
                                               March 31,
                                          2001       2002
                                        ---------  ---------
Mortgage ............................. $   5,076  $   5,849
Interest expense on mortgage loans....     2,716      1,512
Interest expense on home equity loans.       165        110
Home equity...........................       385      1,331
Auto..................................     3,114      2,013
Other.................................        32         37
                                        ---------  ---------
Total operations...................... $  11,488  $  10,852
                                        =========  =========`

Operations expense decreased $0.6 million to $10.9 million
for the three months ended March 31, 2002 from $11.5 million for the three
months ended March 31, 2001. Operations expense decreased as a percentage of
revenue from 70% to 52% for the three months ended March 31, 2001 and 2002,
respectively. The decrease in absolute dollars is primarily due to a decrease in
operations expenses related to auto, due to lower volumes, off-set by increases
in mortgage and home equity operations expenses, due to higher volumes. E-LOAN
expects operations expenses to continue to trend lower as a percentage of
revenues going forward as it further streamlines the loan process and leverages
its fixed costs over growing loan volume.

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
                                            March 31,
                                       2001       2002
                                     ---------  ---------
Mortgage........................... $   2,139  $   6,966
Mortgage interest margin...........       227      1,479
Home equity interest margin........       (81)       127
Home equity........................       237        953
Auto...............................     2,167        278
Other..............................       190        111
                                     ---------  ---------
Total direct margin................ $   4,879  $   9,914
                                     =========  =========`

Direct margin increased $5.0 million to $9.9 million for the
three months ended March 31, 2002 from $4.9 million for the three months ended
March 31, 2001. 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, as well as the addition of home equity
operations, which commenced in the fourth quarter of 2000. Auto direct margin
decreased as loan volume declined due to the industry's broad use of low
interest rate financing incentives.

Sales and Marketing. Sales and marketing expense is
primarily comprised of expenses (excluding non-cash marketing costs) related to
advertising, promotion and distribution partnerships and employee compensation
and other expenses related to personnel. Sales and marketing expense increased
$0.3 million to $5.1 million for the three months ended March 31, 2002 from $4.8
million for the three months ended March 31, 2001. Sales and marketing expense
decreased as a percentage of revenue from 30% to 25% for the three months ended
March 31, 2001 and 2002, respectively. Sales and marketing expenses are expected
to continue at approximately 25% of total revenues in upcoming quarters.

Technology. Technology expense includes
employee compensation, the introduction of new technologies and the support of
E-LOAN's existing technological infrastructure. Technology expense decreased
$0.4 million to $1.4 million for the three months ended March 31, 2002 from $1.8
million for the three months ended March 31, 2001. Technology expense decreased
as a percentage of revenue from 11% to 7% for the three months ended March 31,
2001 and 2002, respectively. The Company expects technology expense to
moderately increase 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 $0.1 million
to $1.6 million for the three months ended March 31, 2002 from $1.5 million for
the three months ended March 31, 2001. General and administrative expense
decreased as a percentage of revenue from 9% to 8% for the three months ended
March 31, 2001 and 2002, respectively. General and administrative expenses are
expected to stay relatively constant in the upcoming quarters.

Amortization of Non-Cash Marketing Costs. On
June 15, 2000, the Company issued two warrants to purchase up to 13.1 million
shares of common stock to Charles Schwab & Co., Inc. pursuant to the
marketing services agreement. The first warrant for 6,500,000 shares has a
three-year term and is exercisable at $3.75 per share. The second warrant for
6,600,000 shares had a three and a quarter year term and was exercisable at
$15.00 per share. The fair value of the warrants, as determined at the date of
grant using the Black-Scholes option pricing model was $12.5 million and was
recorded as a contra-equity account called marketing services receivable. On
July 12, 2001, the second warrant to purchase 6,600,000 shares of common stock
was surrendered to the Company in exchange for a new warrant to purchase
1,389,000 shares of common stock at an exercise price of $5.00 per share until
July 25, 2003. The fair value of this warrant was determined to be equivalent to
the fair value of the warrant surrendered and therefore did not require an
adjustment to the marketing services receivable. The marketing services
receivable was amortized on a straight-line basis over a one-year term and
concluded amortization on June 30, 2001.

Amortization of Unearned Compensation. Certain
stock options granted in the years ended December 31, 1998 and 1999 were
considered to be compensatory. Additionally, an issuance of Series D preferred
stock to Harold "Pete" Bonnikson, Senior Vice President of Mortgage Operations,
in 1999 was considered to be compensatory. Management accelerated the vesting of
compensatory options in the fourth quarter of 2001 resulting in the full
amortization of unearned compensation in 2001.

Amortization of Goodwill. Amortization of
goodwill was a result of the acquisition of Electronic Vehicle Remarketing, Inc.
("CarFinance.com") in September of 1999. Goodwill was fully amortized in
2001.

Other Income, net. Other income, net, decreased
$0.1 million to $0 million for the three months ended March 31, 2002 from income
of $0.1 million for the three months ended March 31, 2001. The decrease is
primarily attributable to the decrease of interest income on investments as well
as an increase in interest expense on non-warehouse facilities.

Liquidity and Capital Resources

The Company's sources of cash flow 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 (used in) provided by operating activities was
$(18.8) million and $60.6 million for the three months ended March 31, 2001 and
2002, respectively. Net cash used in operating activities during the three
months ended March 31, 2001 was primarily due to the net loss, off-set by
goodwill and non-cash marketing costs, and cash used by an increase in loans
held-for-sale. Net cash provided by operating activities during the three months
ended March 31, 2002, was primarily due to the cash provided from the decrease
in loans held-for-sale plus net income. The decrease in loans held-for-sale as
of March 31, 2002 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 first quarter of 2002, the Company sold substantially all of the loans
included in the loan balance at December 31, 2001, as well as substantially all
of the loans funded during the first quarter of 2002. 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 $0.7 million and
$0.9 million for the three months ended March 31, 2001 and 2002, respectively.
Net cash used in investing activities was primarily for the purchase of
software, furniture, equipment and leasehold improvements.

Net cash provided by (used in) financing activities was $15.8
million and $(64.3) million for the three months ended March 31, 2001 and 2002,
respectively.  Net cash provided by financing activities during the three months
ended March 31, 2001 was primarily from net proceeds from borrowings under the
Company's warehouse lines of credit and other credit facilities as well as
proceeds from notes payable. Net cash used by financing activities during the
three months ended March 31, 2002 was primarily from net repayments on the
Company's warehouse lines of credit and other credit facilities.

The ongoing funding of loans is facilitated through the use of warehouse and
other lines of credit.  Each of these facilities requires significant
cash balances to satisfy debt covenants.  The line of credit
obtained from the Chairman and CEO of the Company, as well as the convertible
debt raised from The Charles Schwab Corporation during 2001, reflect the
Company's cash management position of maintaining cash reserves well in excess
of those required by its warehouse facilities.  From a long-term standpoint,
access to committed warehouse facilities is critical in maintaining funding
liquidity in order to operate the Company's business model.

The Company has a warehouse line of credit for
borrowings of up to $50 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 rates. Borrowings are
collateralized by the related mortgage loans held-for-sale. The committed line
of credit expires on March 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 (excluding Documentary
Drafts) 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 months ended and at March 31, 2002.

The Company has an agreement to finance up to $300 million of
mortgage loan inventory pending sale of these loans to the ultimate mortgage
loan investors with Greenwich Capital. Of this amount, $150 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 21,
2003. 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, excluding Documentary Drafts) 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. E-LOAN was in compliance with
all debt covenants for this agreement during the three months ended and at March
31, 2002.

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. Revenue
derived from sales under this agreement are included as a receivable on the
Company's balance sheet.

On April 1, 2001, the Company entered into an agreement for a
$25 million line of credit with Bank One, NA for the interim financing of auto
loans. The interest rate charged on this line is based on LIBOR plus 2.5%. This
line includes various financial and non-financial covenants. At March 31, 2002,
the Company was not in compliance with a debt to tangible net worth covenant
ratio and subsequently obtained a waiver from the lender. This committed line
was reduced to $10 million on April 1, 2002 and expires on July 31, 2002. Bank
One has indicated that they are exiting this component of their lending
business, and therefore will not be renewing our line of credit after the
expiration on July 31, 2002. The Company is in active discussions with multiple
lending providers, and believes that it will be successful in securing an
alternative source prior to expiration of the current facility.

On April 2, 2001, the Company entered into a loan agreement
with Christian A. Larsen, the Company's Chairman of the Board and Chief
Executive Officer, that provided the Company with the ability to draw funds up
to an aggregate of $7.5 million upon demand. The borrowings had an interest rate
of the lower of 12% or the maximum legal rate allowed. Additionally, as provided
for in the loan agreement, the $7.5 million commitment was reduced to $2.5
million as part of the issuance of a convertible note to The Charles Schwab
Corporation. This facility expired on January 5, 2002.

On July 12, 2001 the Company issued a $5.0 million
convertible note to The Charles Schwab Corporation, which is convertible into
shares of its common stock at a conversion price of $1.06 per share and which
matures on January 19, 2003. The convertible note bears interest at a rate of 8%
per annum and is payable quarterly. On March 14, 2002, the Company elected to
redeem the note prior to its maturity date. On April 12, 2002, the Charles
Schwab Corporation exercised its option to convert the amount due to 4,716,981
shares of common stock, in lieu of payment.

The Company believes that its existing cash and cash
equivalents as of March 31, 2002 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 the capital
resource 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.

We Have a History of Losses, We Have Only Recently
Achieved Profitability and We May Not Maintain Profitability.

As of March 31, 2002, our accumulated deficit was $215.3
million. We achieved profitability for the first time in the fourth quarter of
2001. Because we expect 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. We significantly benefited from the spread between
long-term and short-term interest rates during 2001 and to date in 2002. Based
on historical trends, we would not expect the same level of benefit from
interest rate spreads in a normal market.

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. 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 mortgages 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.

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 on our website 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 March 31, 2001 and 2002, we
had 387 and 516 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, auto, and home equity 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 One or More of Our Significant Distribution
Partners Would Adversely Affect Our Business

We rely on Internet distribution partners to direct a
significant number of prospective customers to our website. If we lose any of
our significant distribution partners, we will likely fail to meet our growth
objectives, both in terms of additional borrowers and increased brand awareness.
In the aggregate, approximately 35% and 70% of our mortgage and auto loan
applications, respectively, were derived from the websites of our distribution
partners during the three months ended March 31, 2002. Our agreements with our
distribution partners are typically short-term, from one to four years 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 any of these agreements were to be terminated or were to lapse without
extension, we could lose a considerable number of loan applications and our
business would 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. ("GE Capital"), to finance our self-funded mortgage loan
activities through the warehouse credit facility they provide. We also depend on
Greenwich Capital Financial Products, Inc. ("Greenwich Capital") to finance
portions of our mortgage loan inventory pending ultimate sale to mortgage loan
purchasers. If either 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 either or both 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 Greenwich
Capital and GE Capital as a result of our failure to comply with covenants
regarding the issuance of capital stock, excess asset purchases and the breach
of financial ratios. Our agreements with Greenwich Capital and GMAC Bank expire
in March 2003. Upon expiration of these agreements management intends to renew
or extend the warehouse 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.

Our Inability to Secure a Replacement Auto Line of Credit
Would Adversely Affect Our Business

We have a line of credit from Bank One, NA, to finance
the funding of our auto loans, and it is our sole facility for auto loan
fundings. As part of an April 1, 2002 renewal, the line of credit commitment was
reduced from $25 million to $10 million and extended until July 31, 2002. Bank
One has indicated that they are exiting this component of their lending
business, and therefore will not be renewing our line of credit after the
expiration on July 31, 2002. We are in active discussions with multiple lending
providers, and believe that we will be successful in securing an alternative
source prior to expiration of our current facility. However, we cannot assure
you that we will be successful and our inability to secure a replacement would
adversely affect our auto lending business.

We Are Primarily Dependent on One Lending Source for All
of Our Home Equity Business

Currently, the majority of our home equity loans are
funded through 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 Primarily Three Auto Loan Purchasers
for the Majority of Our Auto Loan Business

Currently, the majority of our auto loans are sold to
three auto loan purchasers. If any of them are unable or unwilling to purchase
our auto loans, we may experience delays in our ability to accept or process
auto loan applications until we are able to secure new auto loan purchasers.
Sufficient additional purchasers for our auto loans may not be available on
favorable terms or at all.

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 until we are able to obtain automated underwriting services
from other providers. 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 E-LOAN'S volume of closed
loans and represent the primary component of market risk to E-LOAN. 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.

E-LOAN attempts 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 its hedging activities. Individual
mortgage loan risks are aggregated by note rate, mortgage loan type and stage in
the pipeline, and are then matched, based on duration, with the appropriate
hedging instrument, thus mitigating basis risk until closing and delivery. E-LOAN currently
hedges its mortgage pipeline through mandatory forward sales of
Fannie Mae mortgage-backed securities and non-mandatory forward sale agreements
with the ultimate investor. E-LOAN determines which alternative provides the
best execution in the secondary market. In addition, E-LOAN does not believe its 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 to capital market loan purchasers (on
average under thirty days).

E-LOAN believes that it has implemented a cost-effective hedging program to
provide a level of protection against changes in the market value of its fixed-rate mortgage
loans held for sale. However, an effective strategy is complex and
no hedging strategy can completely insulate the Company against such
changes.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

We have 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 E-LOAN, 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 complaints allege, 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 in each action seek to recover damages on
behalf of all those who purchased or otherwise acquired E-LOAN securities during
the respective class period. We have been served with two of the complaints and
have entered into a stipulation with plaintiffs' counsel for an extension of
time to respond to the complaint. 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. We intend to
vigorously defend these lawsuits. However, due to the inherent uncertainties of
litigation, we cannot accurately predict the ultimate outcome of the litigation.
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.

The Securities and Exchange Commission has settled charges
against Credit Suisse First Boston Corp. relating to the its investigation of
the firm's IPO allocation practices. Pursuant to the settlement, Credit Suisse
First Boston Corp. has agreed (1) to pay a total of $100 million in the
Commission's action and in a related action commenced by the National
Association of Securities Dealers Regulation, Inc.; (2) to be enjoined by a
federal court from future violations; and (3) to adopt extensive new policies
and procedures. The $100 million payment is composed of $70 million in
disgorgement of improper gains, and $30 million in civil penalties or fines.

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

None

Item 5. Other Information

None



Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:



|10.1 | First Amendment to Marketing Agreement with Charles Schwab &
Co., Inc. dated July, 2000                                                      
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------
|10.2 | Second Amendment to Marketing Agreement with Charles Schwab & Co., Inc.
dated September, 2000                                                
|10.3 | First Amendment to Auto Loan Purchase and Sale Agreement with TransSouth
Financial Corporation dated March 1, 2002*                          
|10.4 | Amendment to Master Commitment with Federal Home Loan Mortgage Corporation
dated March 7, 2002*                                              
|10.5 | First Commitment Supplement to the GMAC Residential Funding Master
Commitment with GMAC Residential Funding Corporation dated March 18, 2002*
|10.6 | Electronic Tracking Agreement Whole Loan Sale Agreement with Greenwich
Capital Financial Products, Inc. dated March 21, 2002                 
|10.7 | SkyMiles® Program Participation Agreement with Delta Loyalty Management
Services, Inc. dated March 22, 2002*                                 
|10.8 | Agreement to Terminate Sublease with Pagoo, Inc. dated March 22, 2002                                                                        
|10.9 | Fourth Amendment to Underwriting Services Agreement with PMI Mortgage
Services Co. dated March 28, 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 Amendment to
its Annual Report on Form 10-K/A for the fiscal year ended December 31, 2000,
filed on April 23, 2001.

*Confidential Treatment Requested

(b)    Reports on Form 8-K

The Company filed one report on Form 8-K during the three months ended March
31, 2002 on January 25, 2002 for the purpose of reporting under Item 5 thereof
the results of its fourth quarter financial results.

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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: May 15, 2002



| |     |                    
| | --- | -------------------
| | By: | /s/ Matthew Roberts

| |                                                                                                                 
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| |                                                                                                                 
| | Matthew Roberts                                                                                                 
| | Chief Financial Officer                                                                                         
| | (Principal Financial and Accounting
                                        Officer and Duly Authorized Officer)

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