Earnest Student Loans Review for 2019
Earnest provides both private student loans and student loan refinancing. Known for flexible loan terms, Earnest is a lender worthy of consideration if you need to finance your education or refinance existing student debt.
Earnest offers private student loans at competitive rates, as well as student loan refinancing and Parent PLUS refinancing at potentially lower interest rates than what you’re currently paying.
Earnest stands out in the private student loan space because its borrowers have more options to customize their loan payments and terms. Earnest also uses a broader method of evaluating a borrower’s eligibility beyond just credit scores.
Earnest offers an initial rate estimate for private loans and refinancing loans after a soft credit pull that won’t impact your score. Borrowers can apply online and, if approved, can manage their account via the company’s mobile app. But before you start the loan application process, let’s take a closer look at Earnest to see if it’s a good fit for you.
In this review:
- Getting to Know Earnest
- Earnest Private Student Loans
- Earnest Student Loan Refinancing
- Earnest Parent PLUS Refinancing
- Alternatives to Using Earnest
Getting to Know Earnest
Although Earnest still operates under its original name and has retained its original management, this San Francisco-based company was acquired by the student loan servicer Navient in 2017.
Earnest is a full-service student loan company aiming to meet the needs of current and former students by offering both private loans and student loan refinancing. However, Earnest loans are not available in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.
If you live in an eligible state, you can apply for a private student loan or a refinance loan if you meet the following requirements:
- You’re over the age of 18.
- You’re a U.S. citizen or permanent resident alien (or have a cosigner who meets these criteria).
- You have debt from a Title IV accredited college or are attending an eligible school.
- You have either graduated or are in your final semester of college (for refinancing); you are attending or are enrolled to attend a four-year Title IV institution (for private student loans).
- You have a job or a job offer if you’re looking for a refinance loan.
- You need to borrow at least $1,000 for a private student loan; if you’re refinancing, the loan amount is over $5,000.
For refinance loans, Earnest also favors applicants who have enough in savings to cover at least two months’ worth of expenses, have increasing bank balances, are current on their rent or mortgage payments, and do not carry high amounts of credit card or personal loan debt, among other factors.
Earnest Private Student Loans
Earnest has long been known as a student loan refinancing lender but has now expanded into offering private student loans as well. The goal is to provide more flexibility and a better user experience for borrowers who need to supplement federal student loans to fully fund their education.
Earnest offers private loans with attractive terms and is willing to look beyond credit scores alone, making it a great choice for students who may not have much of an established credit history. However, you should only consider private student loans — from Earnest or any other lender — if you have already exhausted all of your federal student aid options.
Private student loans tend to have higher interest rates than federal student loans, and there is no opportunity for interest to be subsidized — unlike with federal Direct Subsidized Loans, on which the interest is paid for by the federal government while eligible students are attending school as well as during qualifying periods of deferment after graduation.
You also don’t get as many borrower protections with private loans, such as extended deferment or forbearance in times of hardship; income-based repayment options; or the possibility of loan forgiveness when you work in certain fields. If you’ve exhausted federal student loans, though, private loans from Earnest may be worth considering.
Earnest provides many benefits to borrowers interested in private student loans, including:
- Choice of loan terms
- Nine-month grace period after graduation
- Skip one payment annually once you begin repayment
- No fees for loan origination, loan disbursement, or late payments
- Check your loan eligibility for a loan without a hard credit check
- 0.25% autopay discount
- A quick application process that looks beyond your credit score
There are also some downsides to taking out private student loans with Earnest, such as:
- Limitations on deferred payments (not available in FL, MD, MI, ND, NY, PA, or WA)
- Minimum loan amounts in certain states mean you might have to borrow more than you need
- Eligibility is limited to students attending or enrolled to attend a four-year Title IV institution
Earnest Student Loan Refinancing
What we like:
Large term length range
|Fixed APR||3.89% – 7.89%|
|Variable APR||2.57% – 6.97%|
|Loan Terms||5 – 20 years|
|Loan Amounts||$5,000 up to your total outstanding loan balance|
Earnest offers student loan refinance loans with competitive interest rates. Variable-rate loans start as low as 2.5% APR, and fixed-rate loans start as low as 3.89% APR (both include the 0.25% autopay discount). To get the best rate, you’ll need to meet Earnest’s credit and financial criteria.
Unlike other lenders that only allow borrowers to choose from a few specific term lengths, Earnest offers terms ranging anywhere from five to 20 years — letting you choose a term length and monthly payment that works with your budget.
Earnest requires borrowers to refinance a minimum of $5,000 in student debt, up to a maximum of $500,000. This is helpful if you have a lot of high-interest student debt.
There are many other benefits to refinancing your student loans with Earnest.
Earnest doesn’t charge origination fees or prepayment fees, and it also allows borrowers to schedule additional payments when extra money becomes available. This can help you pay off your student loan debt faster, which ultimately reduces the cost of borrowing over the life of your loan(s).
For those facing financial trouble, Earnest also has policies in place to allow borrowers to apply for temporary deferment or forbearance. The company has received favorable feedback on consumer review websites (such as Trustpilot) about its customer service.
Finally, Earnest allows their borrowers to skip one payment a year after they have made on-time payments for six months. Keep in mind, however, that skipping a payment will result in higher minimum monthly payments and will also extend your payoff date accordingly.
Of course, there is always room for improvement, and Earnest is no exception. For instance, Earnest doesn’t accept cosigners for refinancing loans, so borrowers who have limited credit histories or who don’t meet other financial requirements might have a harder time getting approved. Refinance loans from Earnest aren’t available in all 50 states, so this limits the lender’s reach considerably.
Earnest Parent PLUS Refinancing
Parent PLUS loans are federal loans taken out by parents to help pay for their children’s education. They have higher interest rates than other federal loan options — PLUS loans disbursed between July 1, 2018, and July 1, 2019, carry a fixed interest rate of 7.6% APR.
Currently, 3.5 million Parent PLUS loan borrowers owe $83.7 billion in student loan debt. The only income-driven repayment plan these loans are eligible for is Income-Contingent Repayment (ICR), which sets monthly payments at the lesser of 20% of the borrower’s discretionary income or a fixed payment with a 12-year loan term. Parent PLUS loans are also not eligible for loan forgiveness.
Fortunately, more lenders are beginning to offer Parent PLUS refinancing — including Earnest. Earnest’s Parent PLUS refinancing loans come with variable rates starting at 2.5% APR with autopay. Fixed-rate loans start at 3.89% APR with autopay.
Earnest offers the same flexible repayment options and service to Parent PLUS borrowers as it does to student borrowers.
Alternatives to Using Earnest
Earnest loans have several noteworthy features, but it’s still a good idea to weigh all your options before deciding on a lender. Make sure you receive quotes from multiple loan providers so you can see what’s available to you.
If you’re interested in private student loans, Earnest is a lender worth considering — but remember, private loans don’t provide all the benefits federal loans do.
If you already have federal or private student loans with high interest rates, you might be able to save a decent amount of money by refinancing with Earnest. However, it’s important to keep in mind that you’ll lose access to certain benefits if you refinance federal loans. This includes student loan forgiveness, access to income-based repayment plans, and federal deferment or forbearance.
>> Read More: Can you refinance federal student loans?
Earnest has quickly emerged as a leader in the student loan refinancing industry and is on pace to become competitive in the private student loan field. As with all loan products, however, you should shop around to find the lowest rate and best offer possible. Make sure any lender from which you seek a rate quote uses soft credit checks that won’t impact your credit while you compare your options.4.54 Earnest Student Loan Refinancing
Author: Christy Rakoczy
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