Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.
Most graduates leave school with a number of different student loans, racked up throughout their years in college. Each of these loans likely comes with different terms, payments, servicers, and statements. The sheer amount of information and numbers can be difficult to track.
If you feel overwhelmed with managing your student loan debt, don’t panic. You do have options. One way to make student loans more manageable is through consolidation.
When you consolidate your debt, you combine all those loans into one. You do this by taking out a new loan for the amount of the balances of the existing loans, use the newly borrowed money to repay all the older loans, and then focus on repaying your one new loan. This simplifies your financial situation and makes it easier to keep track of loan terms, payments, and other information you need to know. Other benefits of consolidation could include securing more favorable interest rates (if you also refinance) and lower monthly payments (by extending the repayment term).
Private and federal student loan consolidation: know the risks first
Before you choose to consolidate your loans, examine your situation carefully to determine if this is the best course of action. This isn’t a solution that works well for everyone (even if you do have several different loans to manage). Consolidation doesn’t always result in a lower interest rate, plus lower monthly payments usually means paying the loan over a longer period of time and spending more on interest.
You also need to know that the process is different for federal student loans and private loans, especially if you’re trying to manage each. Private lenders may be able to consolidate both private and federal loans, but you cannot roll private and federal loans into one new federal Direct Consolidation Loan.
And just because you can use private student loan consolidation to include your federal loans doesn’t mean it’s a good idea. Doing so eliminates any benefits or eligibility for repayment plans or loan forgiveness that you could have received from a federal program.
If you think you’ll need and income-driven repayment plan or want to pursue forgiveness options, it’s best not to mix federal and private loans.
Consolidating federal student loans
When you choose to consolidate your federal student loans, the government will combine all your separate loans into a single new loan, known as a Direct Consolidation Loan.
Most federal student loans are eligible for consolidation, including subsidized and unsubsidized Direct Loans, subsidized and unsubsidized Federal Stafford Loans, Direct PLUS Loans, Supplemental Loans for Students (SLS), Federal Nursing Loans, and Health Education Assistance Loans.
Although the Perkins Loan program came to an end in September, 2017, old Perkins Loans are still eligible for consolidation, as well.
If you have a PLUS loan in the name of a parent, that loan cannot be transferred to the student during consolidation. You also cannot consolidate a defaulted loan until you make a repayment agreement with the loan’s servicer or unless you repay the new consolidated loan with one of the government’s eligible repayment plans.
Access to those repayment plans is one of the benefits of Direct Consolidation Loans for some borrowers. With the new loan, you could be eligible for income-driven repayment plans and possibly even forgiveness programs that you weren’t able to use prior to consolidating.
You can also enjoy the benefits offered by consolidating any debt, such as one, single payment and potentially lower monthly payments. However, federal consolidation doesn’t result in a better interest rate. Rather, the new rate is a weighted average of all the interest rates on your student loans, plus a small percentage on top.
If you’re only interested in simplifying your situation and won’t take advantage of any repayment plans, consider finding other ways of tracking your debt and managing repayment. That’s because Direct Consolidation Loans have drawbacks, too.
A lower monthly payment means paying the loan over a longer period of time – in turn, the loan costs you more money since you’ll also pay interest longer. Also, you lose the ability to strategically target your highest interest and/or highest balance loans using a method such as the debt avalanche or snowball.
Be sure to explore all your options and weigh which benefits – those provided by your original loans or those you could access with direct consolidation – will help you the most.
Private student loan consolidation
Private loans are not eligible for Direct Consolidation Loans. If you want to explore private student loan consolidation, you’ll need to work with a private lender. Requirements and eligibility will vary from one to another.
Some private lenders will require you borrow a minimum amount. And some might use different criteria to evaluate your creditworthiness than others. It’s best to reach out to individual lenders and ask for their specific rules around eligibility; compare the results to one another to determine what might be a good fit for you.
Both the benefits and drawbacks of consolidating your private student loans are similar to consolidating federal loans. You may benefit by creating an easier-to-manage financial situation, getting better terms, or securing lower monthly payments.
One big benefit of private student loan consolidation is the ability to refinance and potentially secure a much lower interest rate. In the case of refinancing, your rate will be based on your creditworthiness rather than a weighted average.
If your credit score has significantly improved from the time you took out your loans to now, or you have built a solid income and employment history, you’re more likely to get a low rate that could make consolidation a smart financial move.
Keep in mind whether you’re also extending the repayment term, though. Again, with more payments comes more interest. Plus you still lose the initial benefits provided by your original loan servicer.
And while there’s no cost to originate a federal Direct Consolidation Loan, some private lenders will charge an origination fee.
Again, it’s important to evaluate all your options before making a decision.
What about refinancing?
As you probably noticed, refinancing is very similar to consolidation. However, you don’t necessarily have to consolidate in order to refinance. You can talk to lenders about refinancing a single loan rather than combining many into one new loan.
This might make more sense if you have fewer loans and just one has a very high interest rate. You can refinance to a lower rate and maintain the original benefits and rates on all your other loans.
The federal government will not refinance your loans; they only offer direct consolidation. Private lenders will refinance both federal and private student loans.
If you want to compare the immediate benefits of Direct Loan consolidation vs. private consolidation and refinancing for your situation, check out the calculator below:
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Consolidation vs. Refinancing Calculator
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Current Consolidation Refinancing Total amount paid — — — Monthly payment — — — Interest rate — — — Payoff date — — —
Refinancing is the only way to lower your interest rate but you may lose some of the safeguards associated with having federal loans, so make sure you are fully educated on the decision by reading our recommended resources below:
Again, just like with consolidation, you may not want to refinance any federal loans because you’ll lose your eligibility for government-backed repayment plans. But if you don’t plan to use those programs and can financially benefit by refinancing to a lower interest rate, this may be a viable option for you.
See below for our list of the best private lenders for consolidation and refinancing. These companies offers some of the lowest rates and fees in the industry.
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|