Refinancing with Earnest
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If you’re like the 44 million other people with student loan debt, you know that having debt hanging over you can inhibit your goals. Student loans can cause you to put off marriage, new careers, or even homeownership. But your debt doesn’t have to hold you back; it just takes a little extra work to get around it.
If you’re looking to get a mortgage or take charge of your debt, lending companies will likely ask you for a statement with your payoff balance. This is called a payoff verification statement and is necessary to get a loan or credit for big purchases. Find out why the statement is such a big deal and how you can get one.
What is a payoff balance statement?
A loan payoff letter is a document that you get from your loan servicer for both federal or private student loans. The statement shows you what is the payoff amount, your monthly bill obligation, and your account information.
You need this loan payoff letter to complete the process for several different tasks, including buying a home or repaying your loans. Here are three times you need a payoff balance statement for your student loans.
1. Getting a mortgage
When you start looking for a home, your debt-to-income (DTI) ratio plays a major role. Your DTI ratio is a calculation of your monthly debts compared to your gross income. Lenders look at it to determine whether or not you could afford your monthly payments if they gave you a mortgage loan.
Having student loans raises your DTI ratio and can make lenders nervous. A high student loan balance could ruin your chances of getting a mortgage at all.
When you apply for a mortgage with student loans, most companies will ask you to submit a payoff verification statement that shows how much you owe and what your monthly payment is. If you will repay your loans before your mortgage kicks in, having a letter that shows your expected payoff amount can help make you a more attractive borrower.
2. Paying off your loans
If you are ready to be debt-free and want to pay off your loan balance in full, you need to request a payoff balance from your loan servicer. Interest continues to accrue on student loans, so the letter is a quote of how much you need to pay to close out your loan. That amount is only valid for a specific timeframe after your servicer issues it.
If you pay the amount listed in the letter after the specified timeframe expires, you may have to make an additional payment later once the interest charges are added on. It can be frustrating to think your loans are paid in full only to find you owe more money. In addition, if you don’t monitor the account and don’t realize you still owe money, you could end up delinquent on your loans.
3. Refinancing your debt
For borrowers looking to save money and take charge of their debt, refinancing your student loans makes smart financial sense. You take out a new loan with a lower interest rate or reduced monthly payment and pay off the old loans in full. Over time, this can save you thousands in interest.
However, you need to contact your current loan servicer before you can refinance your loans. Your servicer must send you a payoff verification statement with the current balance of your loans so you can submit it to the refinancing company. The letter tells them how much money they need to pay your old servicer to refinance the debt.
How to get a payoff verification statement
To get a payoff letter, borrowers must contact their loan servicers and request it. Here is the information for some of the most common loans:
American Education Services
- Visit AESSuccess.org and enter your login information
- Under “Account Summary,” select “Payments and Billing”
- On the left, select “Loan Payoff”
- Enter the date of when you want the loan paid off
- Choose “Select a Payoff Quote”
- Print or save the quote
- Visit MyGreatLakes.org and login
- On the top navigation bar choose “Payments”
- Select “Manage Payments”
- Select “Calculate Payment Amount”
- Use the “Choose Payoff Date” field to select the desired date
- The site will bring up your 30-day payoff quote
- Save or print the quote
- Visit MyFedLoan.org and login
- Under “Account Summary,” click on “Payments & Billing”
- Choose “Loan Payoff” on the left
- Select the loan that you want to request a payoff quote for
- Choose your date
- Select “Request A Payoff Amount”
- Save or print version of each page
Managing your loans
Handling your student loans when you’re trying to achieve your other goals can be difficult. Whether you’re looking to buy your first home or want to refinance your loans to save money, requesting a payoff balance statement is an essential first step.
For more information on managing your debt, find out how you can pause your student loan payments.
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 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% 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
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|