**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, 2000** 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.**
(Exact name of registrant as specified in its charter)



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

**5875 ARNOLD ROAD, SUITE 100
                         DUBLIN, CALIFORNIA   94568**(Address of principal executive offices including zip code)

**(925) 241-2400**(Registrant's telephone number, including area code)







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, 2000, 42,119,826 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, 2000
                                TABLE OF CONTENTS**



|**PART I.   FINANCIAL INFORMATION**                                                                                   | **Page No.**
|--------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                      |             
|Item 1.   Interim Financial Statements
                  (unaudited):                                                 |             
|                                                                                                                      |             
|Balance Sheets at December 31, 1999 and March 31, 2000                                                                | **          
|                                                                                                                      |             
|Statements of Operations for the
    three months ended March 31, 1999 and 2000                                       | **          
|                                                                                                                      |             
|Statements of Cash Flows for the
    three months ended March 31, 1999 and 2000                                       | **          
|                                                                                                                      |             
|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**                                                                                                         | **          
|                                                                                                                      |             
|**Index to Exhibits**                                                                                                 | **          

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**PART I -- FINANCIAL INFORMATION**

**ITEM 1.  FINANCIAL STATEMENTS**

**E-LOAN, INC.

                                 BALANCE SHEETS

                                 (In thousands)**

`December 31,  March 31,
                                                         1999          2000
                                                      ------------  ------------
                                                                     (unaudited)
                            ASSETS

Current assets:
  Cash and cash equivalents ........................      $37,748       $25,801
  Mortgage loans held-for-sale .....................       35,140        24,608
  Accounts receivable, net .........................          723            42
  Prepaids and other current assets ................        5,739         4,789
                                                      ------------  ------------
     Total current assets ..........................       79,350        55,240
Furniture and equipment, net .......................        4,053         5,133
Deposits and other assets ..........................        1,686         2,165
Goodwill and intangible assets .....................       67,878        57,945
                                                      ------------  ------------
     Total assets ..................................     $152,967      $120,483
                                                      ============  ============

    LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:
  Warehouse lines payable ..........................      $33,115       $23,900
  Accounts payable, accrued expenses and other
    current liabilities ............................       12,901        11,074
  Capital lease obligation .........................          252           252
  Notes payable ....................................        1,167         1,167
                                                      ------------  ------------
     Total current liabilities .....................       47,435        36,393
Capital lease obligations ..........................          483           405
Notes payable ......................................        2,042         1,750
                                                      ------------  ------------
     Total liabilities .............................       49,960        38,548
                                                      ------------  ------------
    COMMITMENTS AND CONTINGENCIES

Common stock, 50,000,000 shares authorized;
 41,891,336 and 41,679,243 shares issued and
 outstanding at March 31, 2000 and
 December 31, 1999................................             42            42
Less: subscription receivable ......................           (4)           (4)
Unearned compensation ..............................      (21,195)      (17,727)
Additional paid in capital .........................      209,738       209,980
Accumulated deficit ................................      (85,574)     (110,356)
                                                      ------------  ------------
    Total stockholders' equity ....................        103,007        81,935
                                                      ------------  ------------
    Total liabilities and stockholders' equity ....       $152,967      $120,483
                                                      ============  ============`

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

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**E-LOAN, INC.

                            STATEMENTS OF OPERATIONS

                                 (IN THOUSANDS)

                                  (Unaudited)**

`Three Months Ended
                                              March 31,
                                        -------------------
                                           1999     2000
                                        --------- ---------
Revenues ..............................   $4,802    $7,113
Operating expenses:
  Operations ..........................    4,104     6,836
  Sales and marketing .................    3,657     9,134
  Technology ..........................      481     1,122
  General and administrative ..........    1,423     1,789
  Amortization of unearned
      compensation ....................    6,554     3,468
  Amortization of goodwill.............       --     9,933
                                        --------- ---------
   Total operating expenses ...........   16,219    32,282
                                        --------- ---------
   Loss from operations ...............  (11,417)  (25,169)
Other income, net .....................       36       388
                                        --------- ---------
   Net loss ........................... ($11,381) ($24,781)
                                        ========= =========
Net loss per share:
   Basic and diluted ..................   ($0.90)   ($0.59)
                                        ========= =========
Weighed-average shares -
   Basic and diluted ..................   12,598    41,891
                                        ========= =========`

**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)**

`Three Months Ended
                                                                   March 31,
                                                          ----------------------
                                                             1999        2000
                                                          ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss ...........................................   ($11,381)   ($24,781)
    Adjustments to reconcile net loss to net cash
     used in operating activities:
      Amortization of unearned compensation ............      6,554       3,468
      Amortization of goodwill and intangible costs.....         --       9,933
      Depreciation and amortization of fixed assets.....        210         420
      Change in operating assets and liabilities:
         Accounts receivable ...........................        170         681
         Net change in mortgage loans held-for-sale ....    (21,575)     10,532
         Prepaids, deposits and other assets ...........     (1,431)        471
         Accounts payable, accrued expenses and other ..      2,101      (1,828)
                                                          ----------  ----------
            Net cash used in operating activities ......    (25,352)      (1,104)
                                                          ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to furniture and equipment ...............       (389)     (1,500)
                                                          ----------  ----------
            Net cash used in investing activities ......       (389)     (1,500)
                                                          ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from issuance of common stock, ...........          23         242
    Payments on obligations under capital leases .......        (33)        (78)
    Repayments of notes payable ........................        116        (292)
    Proceeds from warehouse lines payable ..............    270,046     177,943
    Repayments of warehouse lines payable ..............   (250,836)   (187,158)
    Proceeds from issuance of preferred stock, net .....        849          --
                                                          ----------  ----------
            Net cash provided by (used in)
              financing activities .....................     20,165      (9,343)
                                                          ----------  ----------
    Net increase in cash ...............................     (5,576)     (11,947)
    Cash and cash equivalents at beginning of period ...      9,141      37,748
                                                          ----------  ----------
    Cash and cash equivalents at end of period .........     $3,565     $25,801
                                                          ==========  ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest .............................       $814        $819
                                                          ==========  ==========`

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

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******

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. Prior to that date, the
Company conducted business through a predecessor company, Palo Alto
Funding Group ("PAFG") which was established in 1992 as a mortgage
broker. The Company is an online lender and is primarily engaged in the
brokerage, origination, and sale of mortgage and auto loans. The Company
is a provider of first and second mortgage loans, home equity loans, auto
loans, small business 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, 2000 and 1999
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,
2000 and 1999. 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,
1999. The results for the three months ended March 31, 2000 are not
necessarily indicative of the expected results for the year ending
December 31, 2000.



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:**



Software Development Costs

The Company expenses computer software costs as they are incurred in
the preliminary project stage in accordance with SOP 98-1 "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use".
Once the capitalization criteria of the SOP have been met, external
direct costs of materials and services consumed in developing or
obtaining internal-use computer software and payroll and payroll related
costs for employees who are directly associated with and who devote time
to the internal-use computer software are capitalized.  Capitalized costs
are amortized over three years on a straight-line basis.  For the three
months ended March 31, 2000, the Company had capitalized approximately
$0.2 million in software development costs.



Net Income (Loss) Per Share

The Company computes net loss per share in accordance with SFAS No.
128, Earnings per Share. Under the provisions of SFAS No. 128 basic net
loss per share is computed by dividing the net loss available to common
stockholders for the period by the weighted average number of common
shares outstanding during the period. Diluted net loss per share is
computed by dividing the net loss available to common stockholders for
the period by the weighted average number of common and common equivalent
shares outstanding during the period, to the extent such common
equivalent shares are dilutive. Common equivalent shares are composed of
incremental common shares issuable upon the exercise of stock options and
warrants and upon conversion of Series A, B, C and Series D convertible
preferred stock.

Pro forma net loss per share has been computed by dividing net loss
applicable to common shareholders by the pro forma weighted average
number of shares outstanding. Pro forma weighted average shares assume
the conversion of all preferred stock (which were ultimately converted to
common stock in conjunction with the initial public offering, as if the
conversion occurred at the beginning of the period or at date of
issuance, if later.

The following table sets forth the computation of basic and diluted net
loss per share for the periods indicated ($000s):

`Three Months Ended
                                       March 31,
                                 -----------------------
                                    1999       2000
                                 ----------- -----------
Numerator:
  Net loss.....................    ($11,381)   ($24,781)
  Accretion of Series C and D
    manditorily redeemable
    convertible preferred
    stock to redemption value..        (517)       --

Net loss available to common     ----------- -----------
    stockholders...............    ($11,898)   ($24,781)
                                 =========== ===========

Denominator:
  Weighted average common
    shares - basic and diluted..     12,598      41,891

Net loss per share:
  Basic and diluted............      ($0.94)     ($0.59)
                                 =========== ===========`

**4.      WAREHOUSE LINES PAYABLE**

As of March 31, 2000, the Company had a warehouse line of credit for
borrowings of up to $50 million for interim financing of mortgage loans.
The interest rate charged on borrowings against these funds is variable
based on the commercial paper rate of the lender plus various percentage
rates.  Borrowings are collateralized by the mortgage loans held-for-
sale. The committed line of credit expires on September 30, 2000. Upon
expiration, management believes it will either renew its existing line or
obtain sufficient additional lines. At March 31, 1999 and 2000
approximately $19.9 million and $22.5 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. The
Company was in compliance with these covenants at March 31, 2000.

The Company has an agreement to finance up to $200 million of mortgage
loan inventory pending sale of these loans to the ultimate mortgage loan
investors.  Of this amount, $100 million is available in committed funds.
This loan inventory financing is secured by the related mortgage loans.
The interest rate charged on these funds is 95 basis points (.95%) over
LIBOR. The line expires May 20, 2000.  At March 31, 2000 there were no
outstanding amounts. This agreement includes various non-financial
negative and affirmative covenants. The Company was in compliance with
these convenants at March 31, 2000.   On April 10, 2000, the Company
extended this warehouse line through April 9, 2001 with an interest rate
of 75 basis points (.75%) over LIBOR.

**5.      REVENUES AND OTHER INCOME, NET**

The following table provides the components of revenues ($000s):

`Three Months Ended
                                       March 31,
                                 -----------------------
                                    1999       2000
                                 ----------- -----------
Gain on Sale of Loans and
  Brokerage Fee ..............       $3,975      $3,139
Interest Income on Loans......          827         681
Auto Revenues.................         --         3,145
Credit Card and other.........         --           148
                                 ----------- -----------
Total Revenues................       $4,802      $7,113
                                 =========== ===========`

The following table provides the components of other income, net
($000s):

`Three Months Ended
                                       March 31,
                                 -----------------------
                                    1999       2000
                                 ----------- -----------
Interest on short-term
   investments.................         $62        $553
Interest expense on
   non-warehouse facilities
   borrowings..................         (26)        (89)
   Equity investment loss......                     (67)
   Other.......................                      (9)
                                 ----------- -----------
                                        $36        $388
                                 =========== ===========`

**6.      OPERATING EXPENSES**

The following table provides detail of the Company's operating
expenses classified by the following categories ($000s):

`Three Months Ended
                                       March 31,
                                 -----------------------
                                     1999       2000
                                 ----------- -----------
Compensation and benefits......      $3,615      $5,488
Processing costs...............         186       1,283
Advertising and marketing......       3,257       8,019
Professional services..........         503       1,251
Occupancy costs................         534         829
Computer and internet..........          78         246
General and administrative.....         459       1,036
Interest expense on warehouse
  borrowings...................       1,031         729
Amortization of unearned
  compensation.................       6,554       3,468
Amortization of goodwill.......       --          9,933
                                 ----------- -----------
Total Operating Expenses.......     $16,217     $32,282
                                 =========== ===========`

**7.      COMMITMENTS AND CONTINGENCIES**



Financial Instrument Contingencies

Upon receiving a locked commitment from a borrower, the Company
simultaneously enters into a non-mandatory forward sale with the ultimate
investor. At March 31, 2000 the Company was a party to commitments to
fund loans at interest rates previously agreed (locked) by both the
ultimate lender and the borrower for specified periods of time. Prior to
originating loans under these commitments, the Company evaluates each
customer's credit and collateral worthiness. The Company uses its best
efforts to fund these locked loans within the agreed-upon locked period.
If the loan cannot be funded within this period, or if the Company is
unable to secure a rate lock from the ultimate lender equal to or less
than the rate lock extended to the borrower, the Company will earn less
revenue than it anticipated at the time it locked with the borrower. At
March 31, 2000, the Company had provided locks to originate loans
amounting to approximately $86.7 million (the "locked pipeline"). In
addition, the Company had commitments at March 31, 2000, in its capacity
as a broker, amounting to approximately $1.9 million.

At March 31, 2000, the Company had entered into non-mandatory forward
loan sale agreements, including commitments with lenders for brokered
loans, amounting to approximately $113.5 million (this includes the
mortgage loans held-for-sale at March 31, 2000, of approximately $24.9
million). The 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.

**8. SUBSEQUENT EVENTS**



Securities Purchase Agreement

On April 25, 2000, the Company entered into a Securities Purchase
Agreement with six institutional investors, including two current
investors.  Pursuant to the agreement, the Company agreed to sell,
subject to the approval of its stockholders, an aggregate of 10,666,664
shares of its common stock at a purchase price of $3.75 per share (the
"Private Placement").  The aggregate gross proceeds to be received from
the sale will be $40,000,000.  The Company has agreed to register these
shares for resale under applicable securities laws.



Marketing Agreement

On April 25, 2000, the Company also entered into a Marketing Agreement
with Charles Schwab & Co, Inc. ("Schwab"), an affiliate of The Charles
Schwab Corporation, pursuant to which Schwab has agreed to provide
certain marketing services to the Company including the development of a
co-branded website on which the Company will offer its services to
Schwab's customers.  In addition to certain cash payments to be made by
the Company to Schwab pursuant to the Marketing Agreement, the Company
has also agreed to issue to Schwab a total of 13.1 million warrants to
purchase common stock in two tranches (the "Warrants").  The first
tranche of 6.5 million warrants have a three year term and are
exercisable at $3.75 per share.  The second tranche consists of 6.6
million warrants with a three and a quarter year term and are exercisable
at $15.00 per share.  The Company has agreed to register for resale under
the applicable securities laws the shares issuable upon the exercise of
the Warrants.

At the Company's Annual Meeting to be held on June 14, 2000, the
Company's stockholders will be asked to approve the issuance of the
common stock under the Private Placement, the Warrants and the shares of
common stock issuable upon exercise of the Warrants pursuant to NASDAQ
listing maintenance rules.

**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**

E-LOAN is a leading online lender whose revenues are derived primarily
from the commissions and fees earned from both brokered mortgage and auto
loans and mortgage loans that it underwrites, funds on its warehouse
lines and sells on the secondary market.



Mortgage Revenues

E-LOAN'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 E-LOAN
never takes title to the mortgage. Brokerage revenues are comprised of
the mark-up to the lending partner's loan price, and processing and
credit reporting fees. These revenues are recognized at the time a loan
is closed. Self-funded loans are funded through E-LOAN's own warehouse
lines of credit and sold to mortgage loan purchasers. Self-funded loan
revenues consist of proceeds in excess of the carrying value of the loan,
origination fees less certain direct origination costs, other processing
fees and interest paid by borrowers on loans that E-LOAN holds for sale.
These revenues are recognized at the time the loan is sold or, for
interest income, as earned during the period from funding to sale. E-LOAN
earns additional revenue from its self-funded loans as compared to
brokered loans because the sale of loans includes a service release
premium.



Auto Revenues

E-LOAN's auto revenues are derived 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. Loans were primarily brokered to
Bank of America in the quarter ended March 31, 2000. In the second
quarter of this year, E-LOAN expects to begin funding auto loans and then
selling them to auto loan purchasers in a manner similar to its approach
with mortgage loans.



General

In generating revenues, E-LOAN relies on a number of strategic
Internet distribution partners to direct a significant number of
prospective customers to its website. E-LOAN considers its distribution
partnerships with Yahoo!, E*Trade, Wingspanbank.com,  Kelley Blue Book,
AutoTrader.com, bankrate.com, Microsoft Carpoint and autobytel to be the
most critical to its ability to generate revenues. Both Yahoo! and
E*Trade have made equity investments in E-LOAN.

**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,
                                 -----------------------
                                      1999       2000
                                 ----------- -----------
Revenues                                100%        100%
Operating Expenses:
   Operations..................          92%         96%
   Sales and Marketing.........          77%        128%
   Technology..................          11%         16%
   General and administrative..          21%         25%
   Amortization of unearned
    compensation...............         137%         49%
   Amortization of goodwill....           0%        140%
                                 ----------- -----------
   Total operating expenses....         338%        454%
                                 ----------- -----------
Loss from operations...........        -238%       -354%
  Other income (loss), net.....           1%          5%
                                 ----------- -----------
Net Loss.......................        -237%       -348%
                                 =========== ===========`

**PRO FORMA NET LOSS (SUPPLEMENTAL)**

Pro forma net loss for the first quarter of 2000 was $11.4 million,
with a pro forma net loss per share of $0.27 on 41.9 million shares. This
compares to a pro forma net loss of $4.8 million in the first quarter of
1999, with a pro forma net loss per share of $0.15 on 33.1 million pro
forma shares. Pro forma results exclude the effects of non-cash
compensation charges and goodwill amortization. Pro forma shares
outstanding prior to the Company's initial public offering on
June 28, 1999 assume the conversion of preferred stock as if the
conversion occurred at the beginning of the period or at date of
issuance, if later.



Revenues

Revenues increased to $7.1 million from $4.8 million for the three
months ended March 31, 2000 and 1999, respectively. Revenues for the
quarter ended March 31, 2000 reflect the increased diversity of the Company's
revenue streams with mortgage loans and auto loans contributing $3.8
million and $3.1 million, respectively.  As a result, E-LOAN continues to
be less reliant on mortgage refinance loans which are more sensitive to
changes in interest rates.   Refinance mortgages for the quarter ended
March 31, 2000 accounted for 24% of total revenues compared to 96% of
total revenues for the quarter ended March 31, 1999.



Operating Expenses

Total Operating Expenses. Total operating expenses increased to $32.3
million from $16.2 million for the three months ended March 31, 2000 and
1999, respectively. The increase was primarily due to significant
increases in amortization of goodwill, expanded advertising and
promotional activities and employee compensation and other expenses
related to personnel as a result of increased headcount.

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 facilities it uses to fund mortgage loans held for
sale. Operations expense increased to $6.8 million from $4.1 million, and
as a percentage of revenues to 96% from 92% for the three months ended
March 31, 2000 and 1999, respectively.  The increase is primarily due to
greater loan volume and a higher percentage of self-funded loans with
related interest expense.  E-LOAN expects operations expenses to trend
lower as a percentage of revenues going forward as it further streamlines
the loan process and leverages its fixed costs over a growing loan
volume.

Sales and Marketing. Sales and marketing expense is primarily
comprised of expenses related to advertising, promotion and distribution
partnerships and employee compensation and other expenses related to
personnel. Sales and marketing expense increased to $9.1 million from
$3.7 million, and as a percentage of revenues to 128% from 77% for the
three months ended March 31, 2000 and 1999, respectively.  The increase
is primarily due to a substantial investment in expenses for advertising,
promotion and distribution partnerships, as well as increases in
compensation associated with additional headcount. E-LOAN intends to
moderately increase absolute dollar spending in sales and marketing
activities in an effort to increase origination volume and increase
overall brand awareness.

Technology. Technology expense includes employee compensation and
consulting fees related to website development, the introduction of new
technologies and the support of E-LOAN's existing technological
infrastructure. Technology expense increased to $1.1 million from $0.5
million, and as a percentage of revenues to 16% from 11% for the three
months ended March 31, 2000 and 1999, respectively. The increase was
primarily the result of the growth in engineering and management
information systems personnel to support the expansion of online
operations. E-LOAN intends to moderately increase absolute dollar
spending on technology in an effort to further improve the online loan
origination process and implement new features and services to its
website. E-LOAN capitalized $350,000 of website development costs during
the three months ended March 31, 2000.

General and Administrative. General and administrative expense is
primarily comprised of employee compensation and professional services.
General and administrative expense increased to $1.8 million from $1.4
million, and as a percentage of revenues to 25% from 21% for the three
months ended March 31, 2000 and 1999, respectively. The increase was
primarily due to the addition of general and administrative headcount and
increased professional services fees. General and administrative expenses
are expected to stay relatively constant in the upcoming quarters.

Amortization of Unearned Compensation.  As of December 31, 1999, the
Company  had an unamortized unearned compensation balance of $38.2
million in connection with certain stock issuances and option grants,
which were considered to be compensatory.  The Company did not record any
additional amounts related to unearned compensation during the three
months ended March 31, 2000.  For the three months ended March 31, 2000
and 1999, the amortization of unearned compensation related to stock
options was $3.5 million and $6.5 million, respectively.  The
amortization of unearned compensation charge will continue to decrease in
absolute dollars as the Company is amortizing the related expense on an
accelerated basis.

Amortization of Goodwill.  Amortization of goodwill was $9.9 million
for the three months ended March 31, 2000.  There was no amortization of
goodwill in the comparable period last year.   E-Loan is amortizing the
goodwill and acquired intangible assets related to the acquisition of
Carfinance.com on September 17, 1999, on a straight-line basis over two
years.



Other Income, net.

Other income, net, increased to $388,000 from $36,000 for the three
months ended March 31, 2000 and 1999, respectively.   The increase is
primarily attributable to the increase of interest income on investments
of $551,000 in the first quarter of 2000 compared to $62,000 in the first
quarter of 1999.

**Liquidity and Capital Resources**

E-LOAN's sources of cash flow include cash from the gain on sale of
self-funded mortgage loans, borrowings under warehouse lines of credit
and other credit facilities, brokerage fees, interest income, credit card
referrals and the sale of equity securities in both private and public
transactions.  E-LOAN's uses of cash include the funding of mortgage
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 operating activities was ($25.4) million and ($1.1)
million for the three months ended March 31, 1999 and 2000, respectively.
Net cash used in operating activities during the three months ended March
31, 2000, was primarily due to an increase in net losses, offset by a
reduction in loans held for sale. Net cash used in operating activities
during the three months ended March 31, 1999, was primarily due to an
increase in net losses and loans held for sale.

Net cash used in investing activities was ($0.4) million and ($1.5)
million for the three months ended March 31, 1999 and 2000, respectively.
Net cash used in investing activities during these periods was primarily
for the purchase of software, furniture and equipment and leasehold
improvements.

Net cash provided (used) by financing activities was $20.2 million and
($9.3) million for the three months ended March 31, 1999 and 2000,
respectively.  Net cash provided (used) in these periods was primarily
from proceeds (repayments) on borrowings under E-LOAN's warehouse lines
of credit and other credit facilities.

As of March 31, 2000, the Company had cash and cash equivalents of
$25.8 million and operating credit lines of $1.5 million, which the
Company believes is sufficient to fund operations through December 31,
2000. On April 25, 2000, the Company entered into a Securities Purchase
Agreement with six institutional investors, including two current
investors.  See "Subsequent Events".

**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 contain 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 successfully promote and market its brand to current and new
customers, generate customer demand for its products in regions of the
country other than California, access additional debt or equity financing
in the future, achieve acceptable pricing for its services, respond to
increasing competition, 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 EXPECT LOSSES TO CONTINUE AND WE MAY NOT
ACHIEVE OR MAINTAIN PROFITABILITY**

We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of
$11.4 million and $24.7 million for the three months ended March 31, 1999
and 2000, respectively. As of March 31, 2000, our accumulated deficit was
$110.4 million. Because we expect to continue to incur significant sales
and marketing expenses and our operating costs will increase to
accommodate expected growth in loan applications, we will need to
generate significant revenues to achieve and maintain profitability. Even
if we achieve profitability, we may not sustain or increase profitability
on a quarterly or annual basis in the future. If revenues grow slower
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. See
 "Management's Discussion and Analysis of Financial Condition
and Results of Operations".

**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. Since we began our online mortgage operations, we have
operated during only one downturn in the mortgage business, which
commenced in 1999 and is continuing. We cannot assure you that we will be
able to operate successfully if the current downturn continues further or
becomes more extensive. As a result of our limited operating history, our
recent growth and our reporting responsibilities as a public company, we
will 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**

Due to rising interest rates and other factors, 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. 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. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" for detailed information on our quarterly operating
results.

**INTEREST RATE FLUCTUATIONS COULD ADVERSELY AFFECT OUR BUSINESS IN SEVERAL
WAYS, INCLUDING CUSTOMERS' INCENTIVE TO REFINANCE EXISTING MORTGAGE LOANS
AND OUR COSTS OF INTERNALLY FUNDED MORTGAGE LOANS**

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

**OUR ABILITY TO ENGAGE IN PROFITABLE SECONDARY SALES OF LOANS MAY ALSO BE
ADVERSELY AFFECTED BY INCREASES IN INTEREST RATES.**

The mortgage loan purchase commitments we obtain are contingent upon our
delivery of the relevant loans to the purchasers within specified
periods. To the extent that we are unable to deliver the loans within the
specified periods and interest rates increase during those periods, we
may experience no gain or even a loss on the sale of these loans. In
addition, any increase in interest rates will increase the cost of
maintaining our warehouse and repurchase lines of credit on which we
depend to fund the loans we originate. We currently do not use derivative
financial instruments to hedge these risks and are therefore exposed to
losses caused by fluctuations in interest rates. A sharp decrease in
interest rates over a short period may cause customers who have interest
rates on mortgages committed through E-LOAN 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.

**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, 1999 and 2000, we had 237 and 364 full-time employees,
respectively.

**IF ONLINE LENDING AND OUR SERVICE OFFERINGS DO NOT ACHIEVE WIDESPREAD
CONSUMER ACCEPTANCE, OUR BUSINESS WILL BE ADVERSELY AFFECTED**

Our success will depend in large part on widespread consumer acceptance
of obtaining mortgage and auto loans online. 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. Our future growth, if any, will depend on the following
critical factors:

> the growth of the Internet as a commerce medium generally, and as a
> market for consumer financial products and services specifically;our ability to successfully and cost-effectively market our
> services to a sufficiently large number of customers; andour ability to overcome a perception among many real estate market
> participants that obtaining mortgages online is risky for
> consumers.

We cannot assure you that the market for our services will develop, that
our services will be adopted or that consumers will significantly
increase their use of the Internet for obtaining mortgage or auto loans.
If the online market for mortgage and auto loans fails to develop, or
develops more slowly than expected, or if our services do not achieve
widespread market acceptance, our business, results of operations and
financial condition would be adversely affected.

**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. Approximately 23% and 40% of our mortgage and auto loan
applications were derived from the websites of our distribution partners
during the three months ended March 31, 2000 and 1999, respectively. Our
agreements with our distribution partners are typically short-term, from
one to three years in length, and 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 LOAN FUNDING SOURCES WOULD
ADVERSELY AFFECT OUR BUSINESS**

We depend on GE Capital Mortgage Services, Inc. to finance our self-
funded mortgage loan activities through the warehouse credit facility
they provide. We also depend on Greenwich Capital Financial Products,
Inc. 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 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 agreement with Greenwich Capital expires in May 2001 and our
agreement with GE Capital expires in September 2000.

**WE ARE DEPENDENT ON ONE LENDING SOURCE FOR THE MAJORITY OF OUR AUTO LOAN
BUSINESS**

Currently, the majority of our auto loans are funded through Bank of
America pursuant to a Transition Services Agreement entered into in
connection with our acquisition of Electronic Vehicle Remarketing, Inc.
If Bank of America is unable to fund our auto loans, we may experience
delays in processing loans or an inability to accept or process auto loan
applications until we are able to secure new sources of funding.
Additional sources of funding for our auto loans may not be available on
favorable terms or at all.

**IF WE DO NOT INCREASE THE NUMBER OF AUTO LOAN LENDERS WHO FUND THROUGH
OUR SITE OUR AUTO LOAN BUSINESS WILL NOT GROW**

To grow our auto loan business, we must broaden our offering of auto
loans to a wide range of credit profiles. Currently, the underwriting
criteria that Bank of America requires allows us to fund auto loans only
for those applicants with high credit profiles. In order to fund auto
loans for more of the applicants, we must increase the number of lenders
who make their loan products available through our site. We cannot assure
you that we will be able to enter into arrangements with other auto loan
lenders 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.

**WE DEPEND ON OUR AGREEMENTS WITH THIRD PARTIES TO FUND MORTGAGE LOANS OR
FULFILL LOAN TRANSACTION PROCESSING IN 5 STATES; IF THESE AGREEMENTS ARE
TERMINATED, OUR BUSINESS COULD BE ADVERSELY AFFECTED**

E-LOAN licenses its mortgage loan origination systems and proprietary
marks to NetB@nk to enable netB@nk to fund mortgage loans under the E-
LOAN brand in four states, and has agreements with PHH Mortgage Services
Corporation and Prism Mortgage Company relating to the fulfillment of all
aspects of mortgage loan transaction processing following origination in
one state. Each of these agreements may be terminated by either party
upon 30 days prior written notice. The termination of any or all of these
agreements could have a material adverse effect on our business.

**THE LOSS OF OUR RELATIONSHIP WITH FANNIE MAE OR ANY OTHER SIGNIFICANT
PROVIDER 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, to help ensure that our mortgage services can be offered
efficiently and on a timely basis. We currently have an agreement with
Fannie Mae that authorizes our use of their automated underwriting
services and enables us to sell qualified first mortgages to Fannie Mae.
We cannot assure you that we will remain in good standing with Fannie Mae
or that Fannie Mae will not terminate our relationship. We expect to
continue to process a significant portion of our conforming mortgage
loans using the Fannie Mae system until we are able to obtain automated
underwriting services from other providers. Our agreement with Fannie Mae
can be terminated by either party. The termination of our agreement with
Fannie Mae would adversely affect our business by reducing our ability to
streamline the mortgage origination process. Additionally, we may not be
able to successfully implement the automated underwriting services of
Fannie Mae or other automated underwriting providers in a manner that
will lead to substantial processing efficiencies.

**DIFFICULTIES PRESENTED  BY INTERNATIONAL FACTORS COULD NEGATIVELY AFFECT
OUR BUSINESS**

A key part of our strategy is to develop E-LOAN-branded online properties
in international markets and we have, through joint ventures and
unconsolidated subsidiaries, developed E-LOAN properties localized for
other countries. To date, we have only limited experience in developing
localized versions of our products and marketing and operating our
products and services internationally and we rely on the efforts and
abilities of our foreign business partners in such activities.

We believe that in light of substantial anticipated competition, we need
to move quickly into international markets in order to effectively obtain
market share. However, in a number of international markets, we face
substantial competition from other online lenders that offer or may offer
similar services. Many of these other online lenders have a dominant
market share in their territories. Further, foreign providers of
competing online services may have a substantial advantage over us in
attracting users in their country due to more established branding in
that country, greater knowledge with respect to the tastes and
preferences of users residing in that country and/or their focus on a
single market. We expect to continue to experience higher costs as a
percentage of revenues in connection with the development and maintenance
of international online properties. International markets we have
selected may not develop at a rate that supports our level of investment.
In particular, international markets typically have been slower in
adoption of the Internet generally and as an advertising and commerce
medium in particular.

In addition to uncertainty about our ability to continue to generate
revenues from our foreign operations and expand our international
presence, there are certain risks inherent in doing business on an
international level, including:

> trade barriers and unexpected changes in regulatory requirements;difficulties in staffing and managing foreign operations including,
> as a result of distance, language and cultural differences;longer payment cycles and currency exchange rate fluctuations;political instability and export restrictions;seasonal reductions in business activity;risks related to government regulation; andpotentially adverse tax consequences.

We have operations in Japan, Europe, the United Kingdom, and Australia.
One or more of the factors listed above could have a material adverse
effect on our present or future international operations and,
consequently, on our business.

**WE MAY INCUR LOSSES ON LOANS IF WE BREACH REPRESENTATIONS OR WARRANTIES
TO MORTGAGE LOAN PURCHASERS**

In connection with the sale of mortgage loans, we make customary
representations and warranties to mortgage loan purchasers relating to,
among other things, compliance with laws and origination practices. In
the event we breach any of these representations and warranties, we may
be required to repurchase or substitute these mortgage loans and bear any
subsequent losses on the repurchased loans. We may also be required to
indemnify mortgage loan purchasers for these losses and claims with
respect to mortgage loans for which there was a breach of representations
and warranties. In addition, many of our agreements with mortgage loan
purchasers prohibit our solicitation of borrowers with respect to the
refinancing of loans we originate and sell. The mortgage loan purchasers
under these agreements may construe our continuing mortgage monitoring
service as violating these non-solicitation provisions, in which case
they may elect to terminate their agreements with us or may seek recovery
from us for damages sustained by them. Many of our agreements with
mortgage loan purchasers prohibit us from refinancing mortgage loans for
specified time periods, unless we pay penalties to the mortgage loan
purchasers or obtain their consent. These agreements also require us to
return any premiums paid by a mortgage loan purchaser if the mortgage
loans purchased are prepaid in full during periods of up to 12 months
following the date the mortgage loan is purchased.

**THE CONSUMER LENDING INDUSTRY IS INTENSELY COMPETITIVE, AND IF WE FAIL TO
SUCCESSFULLY COMPETE IN THIS INDUSTRY, OUR MARKET SHARE AND BUSINESS WILL
BE ADVERSELY AFFECTED**

To compete successfully, we must respond promptly and effectively to the
challenges of technological change, evolving standards and our
competitors' innovations by continuing to enhance and expand our
services, as well as our sales and marketing channels. Increased
competition, particularly online competition, could result in price
reductions, reduced margins or loss of market share, any of which could
adversely affect our business. We may not be able to compete successfully
in our market environment and our failure to do so could have an adverse
effect on our business, results of operations and financial condition.

**IF WE FAIL TO COMPLY WITH THE NUMEROUS LAWS AND REGULATIONS THAT GOVERN
OUR INDUSTRY, OUR BUSINESS COULD BE ADVERSELY AFFECTED**

Our business must comply with all applicable state and federal laws, and
with extensive and complex rules and regulations of, and licensing and
examination by, various federal, state and local government authorities.
These rules impose obligations and restrictions on our auto business and
our residential loan brokering and lending activities. In particular,
these rules limit the mortgage broker fees, interest rates, finance
charges and other fees we may assess, require extensive disclosure to our
customers, prohibit discrimination and impose on us multiple
qualification and licensing obligations. We may not always have been and
may not always be in compliance with these requirements. Failure to
comply with these requirements may result in, among other things,
revocation of required licenses or registrations, loss of approved
status, voiding of loan contracts or security interests, indemnification
liability or the obligation to repurchase mortgage loans sold to mortgage
loan purchasers, rescission of mortgage loans, class action lawsuits,
administrative enforcement actions and civil and criminal liability.

**ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO INTEGRATE, AND
COULD DISRUPT OUR BUSINESS, DILUTE STOCKHOLDER VALUE AND ADVERSELY AFFECT
OUR OPERATING RESULTS**

In September 1999, we acquired Electronic Vehicle Remarketing, Inc., and
we may acquire or make investments in other complementary businesses,
technologies, services or products in the future. These acquisitions and
investments could disrupt our ongoing business, distract our management
and employees and increase our expenses. In the past, we have had
discussions with companies regarding our acquiring, or investing in,
their businesses, products, services, or technologies and we expect to
have additional discussions in the future. If we acquire a company, we
could have difficulty in assimilating that company's personnel,
operations, technology, and software. In addition, the key personnel of
the acquired company may decide not to work for us. We could also have
difficulty in integrating the acquired products, services or technologies
into our operations and we may incur indebtedness or issue equity
securities to pay for any future acquisitions. The issuance of equity
securities could be dilutive to our existing stockholders.

**THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL WOULD LIKELY
HAVE AN ADVERSE EFFECT ON OUR BUSINESS**

Our future success depends to a significant extent on the continued
services of our senior management and other key personnel, particularly
co-founders Chris Larsen, Chief Executive Officer, and Janina Pawlowski,
Chairman of the Board of Directors as well as Joseph Kennedy, President
and Chief Operating Officer.  Ms. Pawlowski, a licensed real estate
broker, is responsible for all of our mortgage activities in California
and two other states. If Ms. Pawlowski were to terminate her relationship
with us for any reason, we would not be able to conduct mortgage business
in these states until a replacement is found. The loss of the services of
Mr. Larsen, Ms. Pawlowski, Mr. Kennedy, Mr. Ferber or other key
employees, would also likely have an adverse effect on our business,
results of operations and financial condition. We have not entered into
employment agreements with any of our executives, except Mr. Kennedy and
Mr. Ferber, and we do not maintain  "key person" life insurance for any
of our personnel.

**WE MAY NOT BE ABLE TO RECRUIT AND RETAIN THE PERSONNEL WE NEED TO SUCCEED**

Competition for personnel throughout our industry is intense. We may be
unable to retain our key employees or attract, assimilate or retain other
highly qualified employees in the future. Our future success depends on
our continuing to attract, retain and motivate highly skilled employees,
particularly with respect to our loan processing functions. We have in
the past experienced, and we expect to continue to experience in the
future, difficulty in hiring and retaining employees with appropriate
qualifications. If we do not succeed in attracting new personnel or
retaining and motivating our current personnel, our business will be
adversely affected.

**OUR BUSINESS WILL BE IMPAIRED IF CONSUMERS DO NOT CONTINUE TO USE THE  INTERNET**

Our business will be adversely affected if Internet usage does not
continue to grow, particularly by home and auto buyers. A number of
factors may inhibit Internet usage by consumers, including inadequate
network infrastructure, security concerns, inconsistent quality of
service, and lack of availability of cost-effective, high-speed service.
If Internet usage grows, the Internet infrastructure may not be able to
support the demands placed on it by this growth and its performance and
reliability may decline. In addition, many websites have experienced
service interruptions as a result of outages and other delays occurring
throughout the Internet infrastructure. If these outages or delays
frequently occur in the future, Internet usage, as well as the usage of
our website, could grow more slowly or decline.

**OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO EXPAND AND PROMOTE OUR BRAND  RECOGNITION**

Establishing and maintaining our brand is critical to attracting and
expanding our customer base, solidifying our business relationships and
successfully implementing our business strategy. We cannot assure you
that our brand will be positively accepted by the market or that our
reputation will be strong. Promotion and enhancement of our brand will
also depend, in part, on our success in providing a high-quality customer
experience. We cannot assure you that we will be successful in achieving
this goal. To date, we have received customer complaints regarding the
quality of our service. If these complaints persist, they may
significantly damage our reputation and offset the efforts we make in
promoting and enhancing our brand and could have an adverse effect on our
business, results of operations and financial condition. If visitors to
our website do not perceive our existing services to be of high quality
or if we alter or modify our brand image, introduce new services or enter
into new business ventures that are not favorably received, the value of
our brand could be diluted, thereby decreasing the attractiveness of our
service to potential customers.

**OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO ADAPT TO THE RAPID
TECHNOLOGICAL CHANGE THAT CHARACTERIZES OUR INDUSTRY**

Our future success will depend on our ability to adapt to rapidly
changing technologies by continually improving the performance features
and reliability of our services. We rely on third party software products
and services, including software related to automated underwriting
functions, which will enable us to realize processing efficiencies that
are central to our operations. If we are unable to integrate this
software in a fully functional manner, we may experience difficulties
that could delay or prevent the successful development, introduction or
marketing of new products and services. In addition, enhancements of our
products and services must meet the requirements of our current and
prospective customers and must achieve significant market acceptance. We
could also incur substantial costs if we need to modify our services or
infrastructure to adapt to these changes.

**ANY FAILURES OF, OR CAPACITY CONSTRAINTS IN, OUR SYSTEMS OR THE SYSTEMS
OF THIRD PARTIES ON WHICH WE RELY COULD ADVERSELY AFFECT OUR BUSINESS**

Our communications hardware and certain of our other computer hardware
operations are located at the facilities of Exodus Communications, Inc.
in Santa Clara, California and Jersey City, New Jersey. Our auto
financing hardware and certain other computer hardware operations are
located at the facilities of Bank of America in Charlotte, North
Carolina. The hardware for our internal loan and product database, as
well as our loan processing operations is maintained in our Dublin,
California facility. Fires, floods, earthquakes, power losses,
telecommunications failures, break-ins and similar events could damage
these systems. Computer viruses, electronic break-ins or other similar
disruptive problems could also adversely affect our website. Our business
could be adversely affected if our systems were affected by any of these
occurrences. Our insurance policies may not adequately compensate us for
any losses that may occur due to any failures or interruptions in our
systems.

**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 OR 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 of
them 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 any federal or state laws governing privacy, which may be
adopted in the future.

**OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE TO PROTECT OUR
INTELLECTUAL PROPERTY RIGHTS FROM THIRD PARTY CHALLENGES OR IF WE ARE
INVOLVED IN LITIGATION**

Trademarks and other proprietary rights are important to our success and
our competitive position. Although we seek to protect our trademarks and
other proprietary rights through a variety of means, we cannot assure you
that the actions we have taken are adequate to protect these rights. We
may also license content from third parties in the future and it is
possible that we could face infringement actions based upon the content
licensed from these third parties. Trademark or propriety rights claims
against us, regardless of their merit, could result in costly litigation
and the diversion of our financial resources and technical and management
personnel. Further, if any of these claims are proved valid, through
litigation or otherwise, we may be required to change our trademarks and
pay financial damages, which could adversely affect our business.

**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. In
addition, in an increasing interest rate environment, E-LOAN's mortgage
loan brokerage volume is adversely affected.

E-LOAN originates mortgage loans and manages the market risk related
to these loans by pre-selling them on a best efforts basis to the
anticipated purchaser at the same time that E-LOAN establishes the
borrowers' interest rates. If E-LOAN can process loans within the
applicable purchasers' commitment timeframes E-LOAN has no interest rate
risk exposure on the loans. However, if E-LOAN cannot process the loan
within this timeframe and interest rates increase, E-LOAN may experience
a reduced gain or may even incur a loss on the sale of the loan.

With the exception of pre-selling loans through best-efforts
commitments, E-LOAN currently does not engage in any hedging activities.

As of March 31, 2000, the Company did not maintain a trading
portfolio. As a result, E-LOAN is not exposed to market risk as it
relates to trading activities. The majority of E-LOAN's portfolio is held
for sale which requires E-LOAN to perform market valuations of its
pipeline, its mortgage portfolio held for sale and related forward sale
commitments in order to properly record the portfolio and the pipeline at
the lower of cost or market. Therefore, E-LOAN monitors the interest
rates of its loan portfolio as compared to prevailing interest rates in
the market.

Because E-LOAN pre-sells its mortgage loan commitments forward, E-LOAN
believes that a 100 basis point increase or decrease in long-term rates
would not have a significant adverse effect on E-LOAN's earnings from its
interest rate sensitive assets. E-LOAN pays off the warehouse lines
payable when the loan is sold and consequently would not be expected to
incur significant losses from an increase in interest rates on the line
due to the short timeframe that the line is drawn down. However, since a
high percentage of E-LOAN's closed mortgage loan volume is from
refinancings, E-LOAN's future operating results are more sensitive to
interest rate movements than a mortgage lender who has a lower proportion
of refinancings.

In the future, if E-LOAN does not pre-sell the mortgage commitments,
its market risk could change significantly.

**PART II.  OTHER INFORMATION**

**ITEM 1.  LEGAL PROCEEDINGS**

On March 8, 2000, the Company reached a settlement with EduCap, Inc., a provider of
educational loan services and financing for computer equipment for use in education,
on a dispute concerning the use of the name "E-LOAN".  On August 2, 1999, the Company
initiated a declaratory judgment action in the United States District Court for the
Northern District of California against EduCap, the alleged owner of the trademark
THE E-LOAN, stating that the Company had not engaged in unfair competition or
infringed upon any trademark or other rights of EduCap by using the name or mark
E-LOAN.  On October 1, 1999, EduCap initiated an action against the Company in the
United States District Court for the Eastern District of Virginia alleging that
the Company's use of the name E-LOAN was wrongful, likely to cause consumer confusion,
and infringed EduCap's alleged trademark THE E-LOAN.  EduCap sought to recover
damages and to enjoin the Company from using the name or mark E-LOAN or any
other colorable imitation of the mark, in any way, including in the Company's
corporate name, in the address of its website, and in its advertising materials.
After exchanging discovery, the parties settled the case on March 8, 2000.  All
disputes between the companies have been resolved and all claims dismissed.  The
settlement resulted in a non-recurring charge of $400,000 for the fourth
quarter of 1999.

**ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS**

During the three months ended March 31, 2000, the Company did not
sell any unregistered securities.

On July 2, 1999 E-LOAN completed an initial public offering in which it sold 4,020,000
shares of its common stock and 5,000 shares were sold by a selling stockholder.  The managing
underwriters of the offering were Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette
Securities Corporation, Hambrecht & Quist LLC, DLJdirect Inc. and E*Trade Securities Inc.
The shares of common stock sold in the offering were registered under the Securities Act of
1933, as amended, on a Registration Statement on Form S-1 (the "Registration Statement") (Reg.
No. 333-74945) that was declared effective by the Securities and Exchange Commission on June
28, 1999.  All 4,025,000 shares of common stock registered under the Registration Statement
were sold at a price of $14.00 per share for gross proceeds to E-LOAN of $56.2 million and
gross proceeds to the selling stockholder of $70,000.  Offering proceeds to E-LOAN, net of
underwriter discounts, were approximately $52.3 million.

From June 28, 1999, the effective date of the Registration Statement, to March 31, 2000,
the Company has used approximately $39 million of the initial public offering proceeds for
working capital purposes, including expenses associated with advertising campaigns, brand-
name promotions and other marketing efforts and capital expenditures.  All amounts represent
estimates of direct or indirect payments of amounts to third parties.  No amounts were paid
directly or indirectly for the above purposes to directors or officers of the Company,
to persons owning ten percent or more of any class of equity securities of the Company,
or to affiliates of the Company.  The use of proceeds described above do not represent
a material change in the use of proceeds described in the offering prospectus.

**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:10.60+   RE/MAX Agreement27.1     Financial Data Schedule
> (b)     Reports on Form 8-K
> 
> There have been no reports on Form 8-K filed during the three months
> ended March 31, 2000.

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**E-LOAN, INC.**

**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 12, 2000



| |     |                    
| | --- | -------------------
| | By: | /s/ Frank Siskowski

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                         
| | Frank Siskowski                                                                                                                                                         
| | Chief Financial Officer                                                                                                                                                 
| | (Principal Financial and
                                                Accounting Officer and
                                                Duly Authorized Officer)

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**Exhibit Index**



|**Exhibit Number** | **Description**        
|------------------ | -----------------------
|10.60              | RE/MAX Agreement       
|27.1               | Financial Data Schedule

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