Review: How Earnest Student Loans Help Pay for College

Ben Luthi Published on July 29, 2019

earnest student loans review

If you’ve maxed out your access to federal student loans, private student loans can potentially help you bridge the gap between the financing you have and the cost of your education. Whether you’re a college student or a parent hoping to help your child pay for school, Earnest student loans can help.

Here’s what you need to know about Earnest in-school loans and how to determine what’s best for you.

Earnest student loans review: The basics

Earnest is an online lender that offers private student loans, student loan refinancing and personal loans. Earnest student loan options include:

  • Undergraduate loans
  • Graduate loans
  • Medical school loans
  • Law school loans
  • MBA loans

Loan terms

You can borrow as little as $1,000 and up to the total cost of attendance for your school — although, some states may have a different minimum loan amount. Repayment options can vary depending on whether you’re applying on your own or with a co-signer:

  • Deferred: You won’t start making payments until nine months after you graduate or fall below half-time enrollment, at which point you’ll make full payments for the duration of the repayment term. This option is available for all borrowers.
  • Fixed: You’ll pay just $25 per month while you’re in school and during the nine-month grace period after you graduate or fall below half-time enrollment. Once that period is over, you’ll start making full monthly payments. This option is also available to all borrowers and can reduce how much interest is capitalized when your repayment term begins.
  • Interest-only: If you have a co-signer, you can opt to pay interest only while you’re in school and during the grace period, after which you’ll make full monthly payments. This option can eliminate any interest capitalization.
  • Full payment: Borrowers with co-signers can opt to make full payments while in school and following graduation with no deferment or grace period.

After you’re approved for a loan, you’ll get the chance to choose your preferred repayment term, which is not an option for federal and some other private student loans. You may also have the option to skip a payment once a year, though note that doing so will result in a slightly higher monthly payment to ensure that you still finish paying the debt on time.

Interest and fees

Earnest student loans come with variable and fixed interest rates. Your rate will depend on your creditworthiness, income, whether you’re applying with a co-signer and other factors. You can check your rate and compare it with other lenders using Purefy’s rate comparison tool.

Variable rates aren’t available in certain states, so check before you apply. Also, keep in mind that while variable interest rates start out lower, they can increase over time and cost you more in the long run.

Whatever APR you qualify for, you can get a 0.25% rate discount when you sign up for automatic payments from your checking account. As for fees, Earnest stands out by not charging any at all — that means no origination or disbursement fee, no prepayment penalty and no late fees.

Eligibility criteria

To qualify for Earnest student loans, you’ll need to undergo a credit check and meet other standard eligibility requirements.

For starters, you need to live in one of the 39 states where Earnest operates or the District of Columbia. Residents of Alaska, Connecticut, Delaware, Hawaii, Illinois, Kentucky, New Hampshire, Nevada, Ohio, Texas and Virginia are not eligible. Other requirements include:

  • You and your co-signer, if applicable, are the age of majority in your state.
  • You or your co-signer is a U.S. citizen or permanent resident.
  • You’re enrolled full-time at a Title IV-qualified institution and are pursuing a bachelor’s or graduate degree.
  • You or your co-signer has a credit score of 650 or higher and a credit history of at least three years.
  • You or your co-signer has an annual income of at least $35,000.
  • You and your co-signer, if applicable, don’t have a bankruptcy or collection accounts on your credit reports.
  • You and your co-signer, if applicable, have a history of on-time payments as a primary borrower on any credit account reported to the three national credit bureaus.

Other factors Earnest will consider include your saving habits, other debts and late, overdraft and insufficient funds fees charged by your creditors and bank.

How to apply for Earnest student loans

If you’re planning to apply for an Earnest student loan, the process is relatively quick and painless. If you select Earnest in our rate comparison tool after comparing them with other lenders, you’ll be taken to their site to apply. You’ll start by sharing some basic information about yourself, as well as your school, graduation plans and credit situation.

Next, you’ll get to choose whether you want to apply for a loan on your own or with a co-signer. Earnest will show you the different APR ranges based on which option you go with. Once you choose, you’ll be asked to create an account with Earnest.

After that’s done, you’ll provide the total cost of your education for the upcoming semester (Earnest will provide its own estimate for you based on your school) and how much funding you already have, giving you the total amount you need to borrow.

Finally, you’ll provide your phone number, major, current and estimated future income, total assets and Social Security number. Then you’ll submit the application and Earnest will run a hard credit check and you’ll get a response within a few days.

Are Earnest student loans right for you?

While Earnest has only been offering in-school student loans since April 2019, the offering is impressive.

Not only do you get a grace period that’s three months longer than the norm, but you’ll also get the chance to skip a payment once a year and get multiple repayment options that can help you save on interest while you’re in school.

The lender also has competitive interest rates and flexible repayment terms that you can choose based on your preferences.

No lender is perfect, though. If you don’t qualify for Earnest student loans based on the lender’s eligibility requirements, avoid the unnecessary hard credit pull by searching for another lender that has different criteria.

Also, be sure to compare rates and other terms from various lenders before pulling the trigger on an application. Rather than going through the prequalification process with multiple lenders, use Purefy's rate comparison tool to compare several lenders at once.

Finally, if you still qualify for federal student loans, look there first. Most private lenders don’t offer the same benefits as the U.S. Department of Education, including income-driven repayment terms and access to loan forgiveness programs. You may also be able to get a lower interest rate, especially if you’re an undergraduate student.

As with any loan decision, do your homework to make sure the one you choose is the best fit for you.