Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
With more than 44 million Americans owing student loans, many of us are looking for strategies to manage our debt better. Refinancing is one approach, as it could save you money on interest and let you choose new repayment terms. But first, you’ve got to find the right lender.
In this review, we’ll take a close look at two leading lenders in the student loan refinancing space — CommonBond and SoFi. Find out whether one finishes on top in the CommonBond vs. SoFi showdown.
CommonBond vs. SoFi: The basics
As online companies with high-tech approaches to lending, CommonBond and SoFi have a lot in common. For one, they provide student loan refinancing for the most debt-burdened borrowers. CommonBond will refinance up to $500,000, while SoFi has no maximum amount.
Both provide competitive interest rates and let you choose between fixed and variable rates on your refinanced student loan. CommonBond also has a hybrid loan option, which involves a fixed rate for five years and a variable rate for the rest of your term.
The CommonBond vs. SoFi chart below takes a closer look at the rates and terms on these two lenders’ student loan refinancing products.
|Loan amount||$5,000-$500,000||$5,000 or more|
|APR range||2.69% – 7.25%||2.47% – 7.98%|
|Repayment terms||5, 7, 10, 15 or 20||5, 7, 10, 15 or 20|
|Rate type||Fixed, variable or hybrid||Fixed or variable|
|Allows a cosigner?||Yes||Yes|
|Offers cosigner release?||Yes, after 36 consecutive on-time payments||No|
|Eligibility requirements||Minimum 660 credit score; graduated from an eligible school; U.S. citizen or permanent resident; meets other requirements for income and employment||Minimum 650 credit score; graduated from an eligible school; U.S. citizen or permanent resident; meets other requirements for income and employment|
|Residency requirements||Lends in all states except for Mississippi, Nevada and Vermont||Lends in all 50 states|
|Extra benefits||Forbearance if you encounter financial hardship||Deferment if you return to school; forbearance if you encounter financial hardship; career coaching; community events; Entrepreneur Program; financial coaching; referral program|
Since CommonBond and SoFi allow for instant rate quotes, you can easily compare preliminary offers from the two lenders. Although you might go with the loan with the lowest interest rate, remember that there are other factors to consider, too.
Choose CommonBond if you want hybrid loans or cosigner release
Although CommonBond and SoFi offer competitive terms and useful benefits to creditworthy borrowers, CommonBond offers a few perks that its rival doesn’t. Here are a few scenarios when it could make sense to choose CommonBond as your refinancing provider.
You’re interested in a hybrid loan
CommonBond is unique with its hybrid loan product, which combines a fixed rate and variable rate on the same loan. When you borrow a hybrid loan, you’re signing up for a 10-year repayment term.
The first five years will have a fixed rate, after which the loan will switch to a variable rate. The variable rate will be assigned based on the London Interbank Offered Rate — a key financial benchmark, often known as Libor — and could fluctuate.
That said, you could pay off your loan ahead of time without penalty. According to CommonBond, the hybrid loan is best for borrowers who intend to pay off their loan earlier than planned and avoid much exposure to the variable rate.
With the hybrid loan, you could get a lower fixed rate than you would on the traditional fixed-rate loan. If you can pay off your debt within five years, you’ll save money on interest and never have to deal with the uncertainty of a variable rate.
You want the option of cosigner release
Adding a cosigner to your refinancing application could help you qualify for lower rates, especially if you don’t have strong credit or steady income. But you and your cosigner must be comfortable sharing debt, as your cosigner’s finances will be on the line if you can’t pay.
CommonBond, however, offers the perk of cosigner release. If you make 36 consecutive on-time monthly payments, you could apply to have your cosigner removed from the loan. Going forward, you’d be the only one responsible for your debt. SoFi, on the other hand, allows you to apply with a cosigner, but it doesn’t offer cosigner release.
You support CommonBond’s social mission
When you refinance with CommonBond, the lender promises to cover the cost of a child’s education in the West African nation of Ghana. It partners with nonprofit organization Pencils of Promise to provide schools, teachers and technology to thousands of young learners.
To date, CommonBond has donated over $1 million through this program. If you want to refinance with a lender that’s committed to improving social good, CommonBond could be the right choice for you.
Choose SoFi if you’ll make the most of member benefits
While CommonBond has low rates and flexible terms, SoFi also offers a variety of benefits to customers, plus it often has relatively low interest rates, so it’s worth looking at when you do your comparison shopping. Here are some instances when refinancing with SoFi might be preferable to refinancing with CommonBond.
You can qualify for the lowest rates
With its variable rate starting at 2.47%, SoFi had a slightly lower interest rate on a refinanced student loan than CommonBond did at the time this article was written. That said, things can change, so it’s worth checking the rates, and either way, you or your cosigner will need excellent credit to qualify for those lowest rates.
If your priority is to save the most money on interest, SoFi could come out as the winner against CommonBond. But look at you offered rates with both lenders to see which will give you the best deal based on the information you provide in your application.
You want options for both deferment and forbearance
Both CommonBond and SoFi offer forbearance — or the option to postpone payments — if you run into financial hardship. This flexibility could be a huge help since going into default on your student loans could harm your credit for years to come.
But SoFi additionally has the option of deferment if you return to school on a half- or full-time basis. You can also defer your refinanced student loan if you undergo rehabilitation for a disability or get called into active military duty.
You will make use of its member benefits or Entrepreneur Program
SoFi is unique for all the benefits it offers to its customers. Here are the resources you’ll be connected with if you choose to refinance your student loans with SoFi:
- Career services to help you with searching for a job, changing careers and personal branding
- Financial coaching to help you achieve your financial and investing goals
- Community events to meet people through dinners, happy hours, educational activities, networking opportunities and other exclusive experiences
- Member discount of 0.125% on additional loans you borrow from SoFi
- Bonus of up to $300 for referring another customer
What’s more, entrepreneurs can apply for SoFi’s Entrepreneur Program, which provides seed capital, mentorship, and access to investors and a community of like-minded professionals.
When you refinance with SoFi, you become eligible for a host of other benefits that go beyond paying off your student loans.
You’re a medical or dental resident looking to refinance
SoFi offers a special student loan product for medical and dental residents looking to refinance their medical school debt. If you’re a medical resident or fellow with more than $10,000 in student loans, you could be eligible for a SoFi medical resident refinance loan.
You can choose repayment terms of five, seven, 10, 15 or 20 years, as well as a fixed or variable rate. You won’t have to make full monthly payments right away. Instead, you can send in $100 a month until you finish your program, for up to 54 months.
While some residents simply put their loans into deferment, refinancing and making small monthly payments could limit the accrual of interest. As a result, your balance won’t be as big when you finish residency and start full repayment.
What to know before choosing a refinancing lender
Before you refinance, make sure you understand the pros and cons of refinancing.
For instance, refinancing can save you money if you qualify for a lower interest rate. It lets you adjust your monthly payments by choosing new repayment terms — a shorter term could get you out of debt faster, whereas a longer term could reduce your monthly bills. Plus, you can refinance both federal and private student loans together into one new loan, simplifying your debt.
But when you refinance a federal student loan, you turn it into a private one. As a result, you lose access to federal programs, such as income-driven repayment plans and certain loan forgiveness programs.
If you’re relying on either, refinancing likely wouldn’t be a good move. But if you’re confident you can pay back the loan on time — or take advantage of CommonBond or SoFi’s forbearance benefit, if necessary — then refinancing could save you money on your debt.
CommonBond vs. SoFi: Which is right for you?
CommonBond and SoFi offer useful perks and benefits to customers, along with competitive rates and flexible repayment terms on their student loans.
Neither comes out as a clear winner in the CommonBond vs. SoFi contest. Rather, the right lender depends on your unique circumstances and needs.
Either way, make sure to compare offers from a variety of lenders before choosing. By shopping around, you can feel confident you’ve found the best offer for your refinanced student loan.
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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% 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 email@example.com, 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|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|