How to Save with an Earnest Student Loan Refinance
June 24, 2019
Refinancing your student loans can potentially save you money with a lower interest rate, monthly payment, or both. With Earnest student loans, you can also achieve more flexibility with your student loan repayment plan.
Here’s what you need to know about Earnest student loan refinance options and how to determine whether it’s the right lender for you.
Earnest student loan refinance review: The core features
Earnest offers both fixed- and variable-rate student loan refinance loans. Loan amounts range from $5,000 to $500,000, making it possible for a wide range of student loan borrowers to apply. Repayment terms range from five to 20 years, and once your application is approved, you’ll get a broad range of monthly payment options.
This setup gives you total control over what you pay each month. The payment amount you choose will determine your interest rate and the length of your repayment term. Earnest reviews include an A+ rating with the Better Business Bureau.
Interest and fees
Interest rates can vary based on your credit and financial profiles, but you can see what rates you will receive using Purefy’s rate comparison tool. There is a 0.25% interest rate discount if you set up automatic payments on your account.
Note, however, that variable-rate loans aren’t available in Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, and Texas.
Also, keep in mind that while variable rates start lower, they can increase over time, potentially costing you more money, especially if you have a long repayment term.
Earnest student loan charges no origination or application fees, no prepayment penalty, and no late fees. There is, however, an $8 fee if your payment is returned due to insufficient funds.
Deferment and forbearance
If you head back to school or are active duty in the military, you can defer payment on your student loans while you’re enrolled or serving.
You may also qualify for forbearance if you’re experiencing financial hardship due to an involuntary decrease in income, involuntary loss of employment, or a significant decrease in your non-discretionary spending.
Just keep in mind that interest will continue to accrue during your deferment or forbearance period.
How to qualify for Earnest student loan refinance loans
In addition to providing more flexibility, Earnest also differentiates itself with its approach to creditworthiness. While the lender does check your credit report and score, it also considers other factors when determining whether to approve your application and what rate to offer.
Those factors include:
- Savings patterns
- Employment history
- Growth potential
- 401(k) and investments
As you can see, Earnest takes a broader view of how you manage your money. So if your credit score may not be the best, but you’re generally responsible with your money and show promise in your career, you may still qualify for a low interest rate.
That said, there are some credit-related eligibility requirements you’ll need to meet to get approved. For example, you need to have a credit score of at least 650, and you can’t have a bankruptcy or recent collection accounts on your credit report. Other requirements include:
- You’re employed, have a written job offer for a position that starts within six months, or you have consistent income from another source.
- Your student loans are in good standing.
- You’re current on your mortgage or rent payments.
- You’re a U.S. citizen or permanent resident.
- Your student loans are in repayment status, or your degree will be completed at the end of the current semester.
You also need to live in one of the 45 states where Earnest loans are available. The lender doesn’t operate in Alabama, Delaware, Kentucky, Nevada or Rhode Island.
Cosigners aren't allowed on an Earnest student loan refinance, so you’ll need to be able to qualify on your own. If you can’t, you may need to choose a lender that does allow co-signers.
How to apply for Earnest student loan refinance
If you’re interested in Earnest student loans, first compare their rates with other lenders using our rate comparison tool. If you select Earnest, the application process is relatively simple. You’ll start by creating an account with the lender. Then you’ll provide some information about your school, loan balance, income, assets, and housing situation.
Finally, you’ll share your address and Social Security number. Once you submit, Earnest will run a soft credit check, which won’t affect your credit score and provide some possible rate options with you. If you agree to move forward with the application, the lender will run a hard credit check and give you some more specific offers based on your eligibility. You’ll then have the opportunity to customize your loan based on your desired monthly payment.
As you do so, keep in mind that the lower the monthly payment you choose, the longer your repayment period and the more interest you’ll pay over the life of the loan. While it’s important to pick an affordable payment amount, try to avoid drawing out the life of the loan unnecessarily.
Is an Earnest refinance loan right for you?
Earnest stands out as a student loan refinance lender that offers more control to its borrowers. Instead of getting just a few offers to choose from, you can choose your terms based on what’s affordable to you.
Because Earnest looks at more than just your credit score, it is possible to get a better interest rate based on your career trajectory and financial management. However, you’ll have a tough time getting approved if your credit score doesn’t meet the lender’s minimum requirement.
If you’re in that boat and need a co-signer — or you can get approved on your own but want a co-signer to improve your chances of getting a lower rate — it may be better to apply with another lender.
Before you apply for an Earnest student loan refinance, it’s important to shop around and compare terms to make sure you get the best rates available. If you’re interested in checking your rates with Earnest and other lenders at the same time, you can do so using Purefy’s rate comparison tool.