Refinancing with Earnest
Refinancing rates from 2.46% APR. Checking your rates won’t affect your credit score.
You’re stuck with student loan debt and want to pay it off, but you’re not really sure where to start. You’ve heard of different repayment options and strategies, but they all seem overwhelming.
You’ve come to the right place. By following this 14-day guide, you can take easy, actionable steps toward launching your loan repayment and paying off your loan debt.
Day 1: Add Up Your Debt
Many of us graduate without an accurate picture of how much student loan debt we actually have. Between various loans and different interest rates, the total damage may not be as clear as it should.
To conquer your student loan debt once and for all, it’s crucial to know exactly what you owe—right down to the penny.
To get started, log in to your loan servicer’s website and, one by one, add up the amounts that you owe for all of your debt in an Excel spreadsheet or on a piece of paper.
If you have both federal and private loans, then this process could take longer. In any case, however, it’s vital that you have a clear understanding of how much you owe.
If you’re not sure about which loan servicer is yours but you know that you have federal loans, then log in to the National Student Loan Data System. Otherwise—that is, if you have private loans—then look at your next bill or statement.
Day 2: Review Your Interest Rates
Once you know your total debt and which loan servicer is yours, it’s time to review your interest rates. Your interest rates could vary widely depending on the types of loan you have. Federal and private loan interest rates differ, while PLUS Loans tend to have higher interest rates.
Understanding your interest rates is important not only to knowing what you’re being charged for the loans, but also to devising a smart plan for repayment. You can learn what your interest rates are from the information provided by your loan servicer. As a final step, write down the interest rate for each loan next to its outstanding balance.
Day 3: Calculate Your Daily Interest
Once you have all of the interest rates written next to the outstanding balances on your loans, it’s time to calculate your daily interest. With a calculator, use the following formula:
(Interest rate) × (Current principal balance) ÷ (Number of days in the year) = Daily interest
For example, let’s say that you have $50,000 in debt at a 7% interest rate:
(.07) × ($50,000) ÷ (365) = $9.58
That means that you have to pay $9.58 per day in interest. Calculating your daily interest is a painful but necessary step, for it puts into focus how much you have to pay in interest each day. That amount should help to motivate you to pay off your debt.
Day 4: Choose a Repayment Method
There are a couple of methods available for tackling your debt. For one, you can use the debt snowball method, which involves paying off the smallest balance first and the minimum amounts due on the rest.
Or, there’s the debt avalanche method, which involves paying off the loan with the highest interest first and the minimum amounts due on the rest.
Though the debt snowball method can be more motivating, the debt avalanche method is more cost-effective, since you pay off the highest interest first. In any case, choose the method that feels right for you.
Day 5: Sign Up for Auto Pay
One major drain on your mental energy as you repay your student loans is simply remembering to make payments. So, instead of relying on your memory or setting up calendar reminders, sign up for auto pay.
Auto pay automatically withdraws payment from your checking account and typically offers a 0.25% interest rate discount. If you’re worried about overdrafts, then make it a daily habit to check your account balances. Enrolling in auto pay can make student loan repayment easier as well as save you money.
Day 6: Evaluate All of Your Expenses
Because you want to pay off your student loans, you need to evaluate all of your expenses and identify areas in which you can cut back. Start by listing all of your expenses, including rent, food, insurance, transportation, and entertainment.
Look at the list for areas where you can reduce spending. For instance, if you have a gym membership that you never use, then cancel your membership. If you’re paying for an unnecessary cable package or an elaborate phone plan, then call your Internet and phone provider to negotiate a lower payment. Companies want to keep you as a customer, so it doesn’t hurt to ask.
Day 7: Have a No-Spending Day Each Week
Though spending money can seem like a natural, necessary part of our lives, it’s smart to occasionally have a no-spending day when you don’t spend any money. For example, on Day 7 of each week, give your finances a break, and keep your wallet shut. Instead, estimate what you might have spent and put that extra money toward your debt.
Day 8: Create a Meal Plan
When you’re trying to pay off student loan debt, food expenses can really take a huge bite out of your budget. It’s also easy to justify food expenses because we have to eat.
But instead of spending all of your extra money on eating out, create a meal plan. A meal plan is like a budget for food; you plan ahead what you will eat and what ingredients you will need.
If you’re new to meal planning, then learn how to get started here. Meal plans can save you money because you stick to buying what’s on the list and what’s part of your plan, instead of randomly splurging on Goldfish crackers or peanut butter cups.
Day 9: Sell Your Old Stuff
If you’ve got stacks of old CDs, books, and clothes that are just collecting dust, then it’s time to get rid of them and make some money. You can take your old things to local stores and resell them for cash.
For old items that these stores don’t buy, consider selling them on Craigslist, eBay, or even at a garage sale. Then, put all of the money you make toward your student loan debt.
Day 10: Pick Up a Side Hustle
When you want to pay off student loan debt, cutting back on spending is only one part of the equation. The other part is earning more income from a job on the side, which can often be fun and give you added experience. Consider working in the sharing economy, starting to freelance, or taking up a gig from the multitude of ones available.
You can earn from $10 to $100 per hour with a job on the side and put all that money toward really jump-starting your student loan repayment.
Day 11: Check Your Credit Score and Credit Report
When you’re paying off student loans, you want to make sure that you maintain good
financial health. One way to check your financial condition is to review your credit score and credit report. Your credit can determine whether you get approved for an apartment, student loan refinancing, a car loan, and much more.
Day 12: Consider Refinancing
One excellent way to save money on paying back your loans is through student loan refinancing. Refinancing allows you to consolidate your debt into one monthly payment and possibly get approved for a better rate.
With student loan refinancing, you may be able to save money in interest. Check out these various student loan refinancing options and review their eligibility requirements to see if it’s right for you.
Day 13: Make an Extra Payment
Though you enrolled in auto pay, that doesn’t mean that you can’t make extra payments. With extra payments, you can cut down on your interest and start chipping away at your principal balance even faster. An extra $25 or $50 payment here and there will add up over time.
Day 14: Calculate Your Debt-Free Date
You know the nitty gritty about your debt, and you have a plan. Now, it’s time to calculate your debt-free date. To figure out when you’ll reach your goal, use this payoff calculator to see how long it will take you to be debt-free using your current payment strategy.
By using this 14-day guide, you can make clear, steady progress toward achieving your debt repayment goals and conquering student loan debt by taking manageable steps.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|