Earnest Student Loan Refinance Review

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Updated on Tuesday, June 2, 2015

Earnest Student Loan Refinance Review

Earnest is fast on the heels of SoFi as one of the leading lenders in student loan refinancing. Its motto is “refinance student loans the new-fashioned way,” and it lives up to it.

How? Earnest looks at other factors besides credit score when it comes to determining whether or not to lend to borrowers. It has low merit-based rates as it wants to give borrowers the best terms they deserve, and it offers a lot of flexibility not seen from other lenders.

Refinance Terms Offered

When refinancing with Earnest, you can refinance both private and federal student loans.

The minimum amount to refinance is $5,000 – there’s no specific cap on the maximum you can refinance.

Earnest offers 5, 10, 15, and 20-year loan terms, but you can create your own based on the minimum monthly payment you’re comfortable making. Yes, you can actually choose your monthly payment, which means the loan can be customized to your needs.

You can also switch between variable and fixed rates freely – there’s no charge. (Note that variable rates are not offered in IL, MI, MN, OR, and TN. Earnest isn’t in all 50 states yet, either.)

Fixed APRs range from 2.98% to 5.79%, and variable APRs range from 1.99% to 5.64% (this is with a .25% autopay discount). The caps on variable loans are 8.95%, 9.95%, or 11.95%, depending on your loan term.

If you refinance $25,000 on a 10 year term with an APR of 5.75%, your monthly payment will be $274.42.

The Pros and Cons of Earnest’s Student Loan Refinance Program

Similar to SoFi, Earnest offers unemployment protection should you lose your job. That means you can defer payments for three months at a time, up to a total of twelve months over the life of your loan. Interest still accrues, though.

The flexibility offered from being able to switch between fixed and variable rates is a great benefit to have should you experience a change in your financial situation.

As you can see from above, variable rates are much lower than fixed rates. Of course, the only problem is those rates change over time, and they can grow to become unmanageable if you take a while to pay off your loan.

Having the option to switch makes your student loan payments easier to manage. If you can afford to pay off your loans quickly, you’ll benefit from the low variable rate. If you have to take it slow and need stability because you lost a source of income, you can switch to a fixed rate. Note that switching can only take place once every 6 months.

Earnest also lets borrowers skip one payment every 12 months (after making on-time payments for 6 months). Just note this does raise your monthly payment to adjust for the skipped payment.

Beyond that, Earnest encourages borrowers to contact a representative if they’re experiencing financial hardship. Earnest is committed to working with borrowers to make their loans as manageable as possible, even if that means temporary forbearance or restructuring the loan.

Lastly, if you need to lower your monthly payment, you can apply to refinance again. This entails Earnest taking another look at your terms and seeing if it can give you a better quote.

Who Qualifies to Refinance Student Loans With Earnest?

Earnest doesn’t have a laundry list of eligibility requirements. Simply put, it’s looking to lend to financially responsible people that have a reasonable ability to pay their loans back.

Earnest describes its ideal candidate as someone who:

  • Is employed, or at least has a job offer
  • Is at least 18 years old
  • Has a positive bank balance consistently
  • Has enough in savings to cover a month or more of regular expenses
  • Lives in one of 48 states. Kentucky and Nevada residents are not eligible.
  • Has a history of making timely payments on loans
  • Has an income that can support their debt and routine living expenses
  • Has graduated from a Title IV accredited school

If you think you need a little help to qualify, Earnest does accept co-signers – you just have to contact a representative via email first.

Application Process and Documents Needed to Refinance

Earnest has a straightforward application process. You can start by receiving the rates you’re eligible for in just 2 minutes. This won’t affect your credit, either. However, this initial soft pull is used to estimate your rates – if you choose to move forward with the terms offered to you, you’ll be subject to a hard credit inquiry, and your rates may change.

Filling out the entire application takes about 15 minutes. You’ll be asked to provide personal information, education history, employment history, and financial history. Earnest takes all of this into account when making the decision to lend to you.

Who Benefits the Most From Refinancing With Earnest?

Because Earnest only uses a soft pull initially, there’s no harm in applying to get your estimated rates. If you’re already responsible with your money and could benefit from a lower interest rate, it’s worth checking out.

It’s important to note that if you’re refinancing federal student loans, you’ll lose benefits exclusive to them. Options such as income based repayment, deferment, forgiveness, and forbearance are lost when refinancing. Some lenders, like Earnest, offer flexible payments, but private lenders aren’t guaranteed or required to offer these options.

The Fine Print

There aren’t any hidden fees – no origination, prepayment, or hidden fees exist. Earnest makes it clear its profits come from interest.

There are also no late fees, but if you get behind in payments, the status of your loan will be reported to the credit bureaus.



on Earnest’s secure website

Alternative Student Loan Refinancing

While Earnest offers very competitive rates and flexible terms, if you’re not eligible to refinance with it, you might want to look at the other choices you have.

SoFi is the leading student loan refinance lender, with rates just slightly lower than Earnest. Its fixed APR ranges from 2.99% to 6.09%, and the variable APR ranges from 2.25% to 6.09%. It also has a max term of 20 years, and there’s no cap on how much you can refinance.

As mentioned, SoFi offers unemployment protection as well, and it also uses a soft pull to estimate your rates. However, it only allows co-signers on a case-by-case basis, and there’s no co-signer release.

There are no hidden fees with SoFi either – the only catch is that certain schools and programs are eligible. You can call or attempt to fill out the application to find out if your school is on the list.



on SoFi’s secure website

*referral link

Citizens Bank is another good option if your school or program is not eligible for SoFi’s refinance program. Its fixed APR ranges from 2.99% to 8.49%, and its variable APR ranges from 1.99% to 8.24%. While its rates are slightly higher, there are no special requirements when it comes to schools or programs.

You can refinance on terms of up to 20 years, and the amount you can refinance varies depending on your degree. Those with a bachelor’s degree can refinance up to $90,000; those with a graduate/doctoral/MBA degree can refinance up to $130,000; and those with a professional degree can refinance up to $170,000.

Citizens Bank allows co-signers on the loan and has a co-signer release after 36 months of consecutive payments. It also offers forbearance to those who can’t afford to make their payments. The only downside is they use a hard credit inquiry, so you can’t “preview” your rates like you can with Earnest or SoFi.

Citizens Bank


on Citizens Bank (RI)’s secure website

Check Around For the Best Rates

You’re never obligated to go with a loan you’re not comfortable with. If you don’t receive favorable terms from one lender, check with another. Each use different criteria, especially when other factors (aside from your credit score) are being considered.

You don’t have to worry if a lender uses a hard credit inquiry – shopping around within a 30-day window won’t harm your credit score as much as shopping around sporadically over the course of a few months. Interest rates make a big difference in the overall cost of your loan, and it’s important to go with a lender that’s willing to work with you.


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