Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.
Your credit score is an essential part of your life. It affects everything from the rates on your car loan to whether or not a landlord approves your apartment lease. But millennials have lower credit scores than other generations. People between the ages of 19 and 34 have an average credit score of 625, according to data collected by Experian. This puts them in the “poor” credit score range.
Bad credit can have significant implications on your financial life. That’s why it’s so important to work on building your credit. Once you have improved your score, good credit can help save you thousands on your student debt.
Find out why now’s the perfect time to use your good credit score to refinance your student loans.
What is refinancing?
If you have student loans, refinancing can help you take charge of your debt and save money of the life of the loan. You will work with a private lender to take out a new loan for the same amount of your old one. Once the new lender approves your application, they pay off your original loan on your behalf and you begin repaying your new loan.
If you have multiple loans, you can take out a single refinancing loan to cover the balance of all of them. That means you’ll have just one lender and one easy monthly payment.
Refinanced loans have completely new terms, including a new interest rate and repayment term. You can often get a significantly lower interest rate or a reduced monthly payment, saving you money and freeing up cash in your monthly budget.
Your rate is dependent on your score
When you apply for a refinancing loan, lenders take into account several variables. They look at your income, degree type, and your credit score. If your credit score is too low, they will not offer you a loan at all, even if you earn a high salary.
Most lenders require a score of at least 650 or higher. If like most millennials your score is lower, you’ll need a cosigner or the company will deny your application.
If your credit score meets their standards but isn’t excellent, you will likely get a loan with a higher interest rate. For lenders that offer loans at 2% to 6% interest, that means you’ll be at the higher end of their range.
A lower score can cost you
If you have a high-interest student loan to start with — some are as high as 8% — refinancing can be a smart decision, regardless of your credit. But the worse your credit, the less money you’ll save.
For example, let’s say you have a $10,000 loan at 8% interest. If your credit score just barely meets lender’s minimum requirements, you might be able to get a refinancing loan at 6%.
By refinancing at 6%, you’d save $1,237 in interest. That’s a substantial benefit. But when you compare it to the savings someone with excellent credit could get, it’s much smaller.
Someone who has good credit and meets the lender’s other criteria could get a loan with an interest rate as low as 2.5%. If they refinanced that same $10,000 loan at that interest rate, they’d save $3,247. That’s an additional $2,000 savings over someone with lower credit and a higher refinancing rate.
Student Loan Refinancing Calculator
Already refinanced? Consider doing it again
Refinancing your high-interest student loans can save you hundreds or even thousands of dollars over the length of your loan. That’s money you can use to pursue other goals, such as building your retirement nest egg, buying a car, or saving up for a house downpayment.
Even if you already refinanced your loans, it may be worth refinancing a second time if you’ve improved your credit score. If you refinanced your loans early in your career when your score was lower and you had an entry-level job, your interest rate is probably than it would be today.
You can refinance your loans again to take advantage of your new and improved score and your higher income.
How to improve your credit score
If your credit score isn’t quite high enough to get you a lower interest rate, work on improving it now. If you’re diligent, you can boost your score and be ready to refinance in just a few months. Some of the things that you can do today to help your credit include:
- Setting up automatic payments: On-time payments are one of the largest components of your credit score. If you have trouble remembering to pay your bills on time, setting up autopay on your rent, utilities, and other expenses can help.
- Paying down debt: Your credit card and loan balances affect your credit score; paying them down can boost it. Put any extra money you have to your high-interest debt.
- Reviewing your credit report: Check your credit report for free at AnnualCreditReport.com and look for fraudulent charges or errors. Mistakes on your report could be dragging your score down.
- Increasing your credit limit: The credit bureaus look at your available credit to determine your score. You can improve your score overnight by contacting your credit card company and asking for a credit line increase.
Use your good credit score to refinance
Once you’ve worked hard to improve your credit, take advantage of your new score and put it to work by refinancing your debt. You can save thousands of dollars on your loans and become debt free faster by using your credit score to refinance.
Ready to start? Check out this list of the best banks to refinance your loans.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|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
|2.57% – 6.97%1||Undergrad & Graduate|
|2.47% – 6.99%3||Undergrad & Graduate|
|2.68% – 8.77%4||Undergrad & Graduate|
|3.24% – 6.66%2||Undergrad & Graduate|
|2.61% – 7.35%5||Undergrad & Graduate|
|3.01% – 9.75%6||Undergrad & Graduate|