Refinancing with Earnest
Refinancing rates from 2.50% APR. Checking your rates won’t affect your credit score.
For many student loan borrowers, refinancing can feel like a godsend.
Instead of having multiple student loan servicers, refinancing lets you deal with just one. If you get a good offer, you can lower your monthly payments and interest rate. If your interest rate goes down significantly, you could save thousands of dollars over the life of your loan.
But refinancing isn’t a viable option for everyone. Some people won’t qualify, and others won’t see much savings from refinancing.
So how do you know whether or not you’re a good candidate? Check out this full student loan refinance checklist to find out.
When should I consider refinancing my loans?
If all of these statements are true, then refinancing your student loans can be the right move for you. See how many you can check off below.
I have a steady income or job offer letter.
When you refinance your student loans, you combine them all into one new loan from a private lender. Although private lenders allow some repayment flexibility, they typically don’t help all that much if you run into financial trouble.
Before turning any federal student debt into one private loan, make sure you’re confident about your ability to pay it back. Plus, you’ll need to show proof of income (or at least a job offer letter) when you apply for refinancing offers. You’ll need to show you can pay back the new loan.
The weighted average interest rate of all my loans is high.
One of the best benefits of refinancing your student loans is getting a lower interest rate. Lowering your interest rate by just 1.5% to 2% can save you thousands of dollars over the life of your loans.
But if your interest rates are already low, a refinancing lender may not be able to beat them — and the last thing you want to do is make your interest rates go up.
If the average weighted interest rate of your current loans is high, you could qualify for a lower rate. CommonBond, for instance, offers variable interest rates between 2.55% and 7.12% and fixed interest rates between 3.89% and 8.07%.
If you can snag a lower rate, you could both simplify your monthly student loan payments and pay a lot less in interest overall.
I don’t need an income-driven repayment plan.
With federal student loans, borrowers have certain protections. Income-driven repayment plans, for instance, extend your repayment term. Plus, they cap your monthly payments at 10 to 15 percent of your discretionary income.
If you refinance, you’ll lose access to these federal programs. Instead of working with the government, you’ll work with one private lender, like SoFi or CommonBond. You should only refinance if you don’t need access to federal income-driven repayment plans.
I’m not working toward federal loan forgiveness.
Programs like Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness forgive federal student loan debt in exchange for service. If you refinance your federal loans with a private lender, you’ll no longer have access to federal forgiveness programs.
These forgiveness programs aren’t the only ones that help pay back student debt, though. You might still qualify for state and university-sponsored loan forgiveness and assistance programs. But if you could be eligible for federal student loan forgiveness, you might not want to refinance your student loans.
My credit score is 650 or greater.
Lenders determine your refinancing offer based on your creditworthiness. When you apply, they take a look at your credit score, among other factors. While many lenders don’t have a strict cutoff, they’re looking for a relatively strong score.
At the same time, some lenders understand that a recent college grad hasn’t had time to build up their credit score yet. But if your score still isn’t up to scratch, you could boost your application by applying with a cosigner. Some lenders even offer a cosigner release after you make on-time payments for a certain period of time.
If you’re not sure your credit score is strong enough, you can always request a quote from the company. This won’t affect your credit score and will give you an initial sense of the offers.
Refinancing would give me better terms on my student loans.
Finally, you must make sure refinancing would improve your student loan situation. Identify your goals for refinancing. Are you working with a lot of lenders and want to simplify your monthly payments? Refinancing would definitely help you do that.
Are you trying to lower your monthly payment or interest rate? To find out if refinancing will help, you must submit a few pieces of information, like your name, income, and total debt. In just a couple of minutes, you can see what kind of offers you could qualify for.
You don’t have to worry about a hard credit check at this point. You can compare lenders to see what your monthly payments and interest rates would be. Then, use a student loan refinancing calculator to determine whether or not you’d save money.
When is refinancing a bad idea?
There are some cases when you might be better off waiting to refinance. If any of the following refinance checklist applies to you, you might not be a good candidate for student loan refinancing at this time:
- My income is irregular or unstable.
- The average weighted interest rates of my loans is already low.
- I might need an income-based repayment plan in the future.
- I’m in or am considering a career that qualifies for federal loan forgiveness, such as PSLF or Teacher Student Loan Forgiveness.
- My credit score is lower than 650.
- Refinancing wouldn’t help me save money or lower my monthly payments.
Decide whether refinancing is right for you
Before refinancing your student loans, make sure you understand the full implications. Assess your situation to determine whether you’re a strong candidate for refinancing.
For many people dealing with student loan debt, refinancing improves their financial picture. By evaluating your personal situation, you can confidently determine whether or not refinancing is right for you.
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 SoFi.
2 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 2.50% APR (with Auto Pay) to 7.27% 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 April 17, 2019, 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 04/17/2019. 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 our student 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|