Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
Let’s say you already know you should refinance your student loans. You’ve thought through the pros and cons. You’ve dreamt of the lower payments or a faster payoff. You just haven’t gotten around to doing it.
Every month you don’t refinance your student loans is another month you could be overpaying on interest.
In other words, you might just be throwing money out the window. But you can stop the cycle! It only takes a few minutes.
How long does it take to refinance student loans?
I get it, refinancing your student loans sounds like it will take forever. You’ll need a mountain of paperwork, an endless application process, and weeks of waiting for an answer, right?
It only takes a few minutes to start the process of refinancing your loans. After that, if you have your stuff together, it doesn’t take much longer to close on the new loan and start paying your debt off faster – or saving money on your monthly payments.
Let’s get started.
How to quickly and easily refinance your student loans
1. Add up how much you owe on all your student loan debt
If you already know how much you owe on your student loan debt, skip this step.
But if you’re not sure, quickly log into your student loan accounts and add up your current balances. The loan you apply for to refinance should be large enough to cover these balances – but not more than that.
While you’re at it, take a peek at your interest rates. That way you know the rates you’re trying to beat.
2. Collect student loan refinance offers
After you know how much you owe, start collecting student loan refinance offers. It’s easy to do this if you check out the top student loan refinance lenders first.
Start by picking the ones that offer what you need regarding rates, types of loans they’ll refinance, and desirable repayment terms. Then, go through with the first phase of the application.
Fun fact: You can collect multiple offers without hurting your credit score. That’s because these offers are the result of a soft credit pull. Remember, a soft credit pull has no effect whatsoever on your credit and can only result in a pre-qualification offer.
Once you spot the offer you like the best, then you can go through with the rest of your application. This will result in a hard credit pull, but that’s okay – this should be the one offer you want to explore.
3. Pick the best offer based on your specific needs
As you review offers, the lowest interest rate should be a high priority. After all, the less you pay on interest each month, the less you’ll pay on your student loan debt overall.
But don’t disregard other benefits. Student loan refinancing comes with a variety of perks such as cosigner release, repayment terms that are more suitable for your financial situation, unemployment protection, and so on.
Think about your financial situation and what it might look like in the next few years before you make your final choice. That way you can be sure to get the all around best offer for you.
4. Complete your application
Once you’ve made your pick, go ahead and complete your application. At this stage, the lender will let you know what they need. It might be paperwork to sign or send in.
Whatever they ask for, don’t drop the ball on this step. It’s the only one that requires any effort from you, and it’s vital for the completion of your application.
5. Find a cosigner if necessary
Depending on your economic situation, you might find out that your preferred lender will only let you apply with a cosigner. As it stands, roughly 94 percent of undergraduate student loans already had a cosigner in 2015-2016.
Even if you don’t already have a cosigner on your loans, but you suspect you may need one for the refinance, start looking for someone now. Just make sure you don’t take this step lightly. If for some reason you default on your loans, it’s going to hit their credit – hard.
So go ahead and pick a cosigner if necessary. But don’t move forward with it unless you’re sure you’ll be in good standing on your loans.
6. Start repaying those loans
Once your refinance loan has been closed on, you can finally sit back and focus on repaying your loans.
One of the greatest things about this step is that you’ve gone from multiple student loans servicers to just one. Suddenly, your monthly repayment just got a lot simpler.
If you want to make this step even more painless, set up automatic payments. What’s more, many lenders offer an interest rate reduction for this.
And if you want to kick your repayment into high gear, apply extra money to your student loan repayment. Most top student loan refinancing lenders don’t charge a fee for early repayment.
Go ahead and apply your tax refund, birthday money, bi-weekly payments, and more to kick your student loan debt to the curb.
How much could you save via student loan refinancing?
If you’re still not sure it’s worth the time investment, why not go through a quick example to see how much you might save with a refinance?
Using our student loan refinancing calculator, let’s see what happens if you refinance $30,100 – the average student loan debt 2015 college graduates walked away with, according to Ticas.org.
We’ll say you have an interest rate of 3.76%, the average for federal undergraduate loans according to Federal Student Aid. And, your remaining student loan repayment term is 20 years.
You’re then able to refinance with a 2.56% variable interest rate for a 20-year repayment term. While the interest rate could go up since it’s variable, assume that it stays the same for the sake of calculating the maximum amount you can save.
In this example, you’re not going to see a large drop in your monthly payment. But you would see a large drop in your overall debt repayment. Here are a few stats:
- Original monthly payment: $179
- New monthly payment: $160
- Interest paid on original loan: $12,768
- How much interest you would pay on the refinanced loan: $8,392
- Total savings on interest: $4,376
That’s if you took out a 20-year repayment plan. Now, let’s see what happens if you choose an accelerated 10-year repayment plan. Since it’s a faster plan, your payment will go up, but watch what happens with your total interest paid.
- Original monthly payment: $179
- New monthly payment: $285
- Interest paid on original loan: $12,768
- How much interest you would pay on the refinanced loan: $4,049
- Total savings on interest: $8,719
In both scenarios, a refinance on the student loans saves a massive amount of money on interest over the life of the loans – you’ll pay way less by the time the debt is said and done.
Don’t be scared to refinance your student loans
Maybe you’ve been avoiding refinancing your student loans because you’re nervous about it.
If your loans are federal, that’s understandable. Refinancing federal student loans turns them into private student loans and removes benefits such as federal deferment or forbearance, income-driven repayment plans, or forgiveness options.
But if you weren’t likely to need these options in the first place, then this might not be something to worry about. If you’re stable in your career, have an emergency fund, and have never used federal protections like those mentioned above, then you can refinance your student loans with less apprehension.
Remember, every month you pay more on interest than you have to is a month in which you’re losing money. So do yourself a favor and at least collect the offers to see what kind of terms you could get. Then you can make a truly informed decision.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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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 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|
|2.47% – 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|