When you’re in a pinch, access to an unsecured personal loan can be a big help. I’ve used a personal loan in the past to help me move across the country, and I know what a relief it can be to have the funds you need.
If you’ve felt that way, you’re in good company. Between the fourth quarter of 2016 and the fourth quarter of 2017, the number of personal loan accounts increased by 7.5%, according to TransUnion’s Q4 2017 Industry Insights Report.
Earnest vs. SoFi: A quick comparison
Everyone has their own needs when it comes to getting a personal loan. Your unique financial situation might make one lender work better than another.
Think about the purpose of the loan, and be honest about your credit and debt situation.
“Know what you need before you even start your search,” said Riley Gilson, the chief revenue officer for payday loan alternative company Credit Fair-E. “You can save money on interest and confidently set the loan terms.”
The chart below offers you a quick overview of some of the key characteristics of Earnest and SoFi loans:
|Interest rates||6.99% to 18.24% APR||6.26% to 14.87% APR|
|Loan amounts||$5,000 to $75,000||$5,000 to $100,000|
|Loan term length||3, 4, or 5 years||3, 4, 5, 6, or 7 years|
|Minimum credit score||680||None|
|Alternative credit information||Yes||No|
|Late payment fees||No||No|
|Soft credit pull||Yes||Yes|
As you can see, neither Earnest nor SoFi charges extra fees. And they both use a soft credit pull to provide you with rate quotes. A soft pull won’t impact your credit score, so you don’t have to worry about getting dinged when comparing Earnest versus SoFi.
However, it’s important to note that SoFi offers loans in higher amounts. It’s possible to get up to $100,000 from SoFi. With Earnest, you’re limited to a maximum of $75,000.
Because you can borrow more with SoFi, you also get access to longer loan terms — up to seven years. The longest term with an Earnest loan is five years.
Finally, SoFi doesn’t have a minimum credit score requirement, while you need a score of at least 680 to qualify for a loan with Earnest.
How to apply for an Earnest personal loan
Applying for an Earnest personal loan is fairly straightforward and intuitive. Interestingly, after you create an account, you go right into sharing information about your education.
Even though Earnest has a minimum credit score of 680, the lender also takes into account your education, job history, and other data to help determine an interest rate.
Once you finish entering your education data, you need to share your work history. After that, you’ll be asked for your financial information, including your annual income and assets. Link your bank account so Earnest can get a full picture of your situation.
At the bottom of the financial page, you’re required to declare whether you’ve missed any payments or have accounts in collections. If these conditions apply to you, Earnest asks for a short explanation of the situation.
You finish your application with the kind of personal information often asked for with any type of loan:
- Phone number
- Citizenship status
- Living situation (own or rent)
Earnest also requires you to upload a full-color government ID. Once you’re done with that, you’ll move on to the review page, where you’ll double-check your information, enter your Social Security number, and consent to have Earnest pull your credit.
The whole process took me about five minutes.
How to apply for a SoFi personal loan
Before you can apply for a SoFi personal loan, you need to create an account and log in. You’ll need to provide your name and email address and create a password.
Once you get into your account, look for the lender’s personal loan offering. Unlike Earnest, SoFi asks for your personal information first. On the first page of the form, you’ll provide the following:
- Phone number
- Whether you rent or own (or live with your parents)
- Citizenship status
- Education information (including schools attended and graduation dates)
- Employment information
- How you plan to use the money
After that’s done, you’ll consent to have SoFi check your credit. It took me about three minutes to fill out the form and get a rate quote. Once you have the quote, you can upload required documentation and apply for a loan. If you have the documentation ready, it only takes a few more minutes to complete your application.
When Earnest might be a good choice for you
Earnest might be a good choice if you:
- Prefer to choose your monthly payment
- Want a lower interest rate based on factors beyond your credit score
- Don’t need a longer repayment term
In some cases, you might be rejected for a SoFi personal loan if you have a delinquency in your recent credit history. I recently applied for a SoFi loan, and the reason given for the rejection was a missed payment several months ago. Earnest, on the other hand, might be willing to overlook such mistakes if they’re small and infrequent.
If you’re working on improving your credit and have a score of at least 680, you might benefit from Earnest’s policy of looking at alternative data and considering extenuating circumstances. This can result in a lower interest rate even if you wouldn’t normally see the best rates thanks to a less-than-perfect credit score.
“Some independent lenders consider aspects of your background beyond credit score,” said Joseph Toms, president of FreedomPlus, a personal lender. “Traditional credit data doesn’t necessarily account for your complete financial profile and ability to pay debts.”
When SoFi might be a good choice for you
SoFi might be a good choice if you:
- Need to borrow more than $75,000
- Want a discount on your interest rate for being a member
- Want a longer loan term
Even though SoFi doesn’t have a minimum credit score requirement, it’s important to note that the lender does take missed payments and current delinquencies seriously. If you’ve made a couple of mistakes recently, you could find yourself rejected for a loan from SoFi.
However, SoFi does offer a hardship program. If you lose your job, your payments could be temporarily paused. You could also get a discount on your interest rate if you’re a SoFi member. If you’ve refinanced student loans with SoFi already, getting a personal loan can make sense due to an additional discount on rates.
“Some lenders offer interest rate discounts,” said Toms. “Find out what you need to do to qualify. You can save money over time this way.”
Earnest vs. SoFi: Which should you choose?
When shopping around for the best personal loans, don’t limit yourself to online lenders. While Earnest and SoFi can both be good choices, it’s not always about the lowest rate or which lender will approve you.
Gilson suggested comparing online offerings with local personal loans from banks and credit unions.
“Read the reviews, too,” Gilson said. “Check with the Better Business Bureau and search online to see what others are saying about them.”
In the end, whether you go with Earnest or SoFi depends on what you’re looking for. If you need a bigger loan and you have a good credit track record, SoFi could be a great choice. However, if you need a little leeway because of a couple of repayment mistakes, Earnest might be the way to go.
Get offers from three to five lenders. Then see what personal loan fits your needs in terms of customer service, fees, payment flexibility, and terms.
With a little extra research, you should be able to get a loan that works for you — no matter your financial situation.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|