Earnest Student Loan Refinancing Review

Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.

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Earnest is a private lender that offers student loan refinancing for college graduates (and soon-to-be graduates). Earnest offers some of the most competitive interest rates around but has somewhat high credit standards and has some other criteria for eligibility. In short, if you’re looking to consolidate your student loans or lower your interest rate and you have strong credit and other qualifications, Earnest definitely belongs on your short list.

Ratings Methodology
Provider Rates & Terms Great For Get Started
Rates & Terms:

Fixed Rates: 3.5 - 7.89%

Variable Rates: 2.49 - 7.23%

Terms: 5-20 years

Great For:
  • Low rates
  • Discounts
  • Flexible loan terms
Get Started: Check Rate
  • Checking rates won't impact your credit score

Top perks

Earnest certainly has some strong qualities that are important to look for in a private student lender. Here are some of the things about Earnest and its refinancing product that stand out to me:

  • Transparency: It’s easy to see what APR and other loan terms you could get. Earnest allows prospective refinancers the ability to check their loan offers with a quick pre-approval form, and with no effect to their credit score.
  • APR Rates: Earnest offers some of the lowest student loan refinancing rates in the market. While not every borrower will qualify for the best rates, Earnest claims that borrowers who consolidate private or federal student loans will typically lower their interest rate.
  • No pre-payment penalty: Borrowers can choose a monthly payment that fits their budget and are free to increase it anytime they want in order to pay down their loan faster.
  • Flexible loan terms: Borrowers customize a loan term to meet their monthly payment needs, a feature the company calls “precision pricing.” In fact, Earnest offers up to 180 different term length options to borrowers, ranging from five years to 20 years at one-to-three-month intervals.
  • Flexible repayment schedules: Earnest is very accommodating to borrowers who need flexible repayment schedules, allowing borrowers the ability to skip a loan payment and make it up later.
  • Application process: Earnest uses data beyond your credit score and income to evaluate your loan application, such as your savings, educational level, and future earnings potential.

What could be improved

There’s no such thing as a perfect lender for everyone, and Earnest certainly isn’t an exception. Here are some things that could make Earnest a less-than-ideal choice for your student loan refinancing needs:

  • Credit score requirement: Earnest has a minimum credit score requirement of 650. While this isn’t exactly a high bar, many college students and recent grads don’t have an established credit history or have a couple of dings on their credit.
  • Refinancing requirements: Earnest requires borrowers to have completed their degrees (or be on track to graduate) in order to refinance student debt. If you borrowed money for say, professional development courses, Earnest isn’t an option for you.
  • Limited availability: Finally, Earnest isn’t active in all 50 states. The company doesn’t make loans in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

How to refinance with Earnest

Here are the steps to refinance your student loans with Earnest:

  1. Use the quick pre-approval form on Earnest’s website to receive an estimate of your interest rate, based on your credit score and other factors.
  2. After you’ve decided that Earnest is a good fit for your refinancing needs, fill out the application. This is a bit more thorough than the pre-approval form and is designed to assess your financial responsibility. It’s important to note that the initial rate estimate you receive is just that -- an estimate. After completing the lending application, it’s entirely possible that your rate will change.
  3. After Earnest has completed its review of your application, you can choose your own monthly payment and other loan specifications before you sign your loan documents and receive your money.

Eligibility

In order to be eligible for Earnest’s student loan refinancing, the following criteria must be met (Note: This isn’t an exhaustive list of requirements, but covers the main criteria):

You must be at least 18 years old and a U.S. citizen or possess a 10-year non-conditional Permanent Resident card, and you must be enrolled on a less-than-half-time basis in school or not at all. You also must be the primary borrower on the loans you’d like to refinance and the debt must have been incurred to finance your education -- in other words, you can’t refinance a loan you cosigned for someone else. You also must have completed the degree you initially took out the loans for, or must be on track to complete it at the end of the current semester.

Furthermore, to be eligible for a refinancing loan, you cannot be requesting additional student loans. Earnest has a $5,000 minimum on student loan refinancing, so your loans must be that much or more.

Like most private lenders, Earnest has minimum credit standards and other borrower qualifications that must be met. The company requires a minimum credit score of 650, and that borrowers are employed or have a written job offer. Borrowers’ rent or mortgage payments, as well as their student loan accounts, must all be in good standing.

Earnest doesn’t currently lend to residents of Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

When refinancing with Earnest is right for you

Earnest is a great option for student loan borrowers who have strong credit histories and meet the lender’s other criteria.

Furthermore, Earnest is a good option for borrowers who have private student loans to consolidate and/or have federal student loans but don’t anticipate needing income-driven repayment or qualifying for a federal loan forgiveness program.

It’s also important to mention that Earnest offers Parent PLUS refinancing. Although we’ve focused on student loan refinancing here, parent borrowers could also potentially benefit from an Earnest refinancing loan.

Alternatives to consider

If you have federal student loans you’re looking to refinance, it’s a good idea to determine if a Federal Direct Consolidation Loan is the better choice for you. This could be the case even if you could get a lower interest rate through a private lender like Earnest.

Federal Direct Consolidation Loans are eligible for federal loan forgiveness programs such as Public Service Loan Forgiveness, and also qualify for income-driven repayment options that allow lower-income borrowers to cap their payments at a certain level of income.

It’s also important to mention that you should always evaluate a few loan options, even if you’re virtually certain that Earnest is best for you. Like Earnest, many other private student loan refinancers allow you to check your estimated APR without any effect to your credit score, so there’s really no good reason not to check at least one or two more to make sure you’re getting the best possible terms.

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