Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
Maybe you’ve heard the buzz surrounding student loan refinancing — the fact that you could save money in interest and merge your loans into one simple monthly payment.
Plus, private refinancing companies are rolling out unique perks to their customers. SoFi, for example, offers unemployment protection and a cool entrepreneur program, while CommonBond commits to its social promise to do good and give back to the community.
There can be a lot of benefits to student loan refinancing. So when can you give it a shot?
For eligible candidates with good credit and stable income, the sooner you refinance, the better. This is because of the potential interest savings.
Let’s say you have a Graduate PLUS loan with an interest rate of 7% and a $50,000 balance. If you refinance to 4.99% over a 10-year repayment period, you could save roughly $50 per month. Even more impressive, however, is that you’d save more than $6,000 in interest over the life of the loan.
Imagine what you could do with that extra cash: you could put more money toward principal payments, save for a rainy day, or invest for retirement.
Even if you just graduated, you could benefit from refinancing. For example, SoFi and CommonBond honor grace periods, so if you just graduated and don’t have to pay your loans right away, you could benefit from a lower interest rate.
The catch? Most refinancing companies want you to have a job lined up already and sufficient income to pay back your loans. If you’re lucky enough to score a job right after graduation, you could save money on interest before your first payment is even due.
Some refinancing companies, such as Citizens Bank, want to see positive repayment history before you are eligible for refinancing, so you may not be eligible right after graduation. As part of the eligibility requirements for Citizens Bank, you must make three on-time payments and show proof of graduation.
In addition, most refinancing companies require you to complete your degree in order to be eligible — but not all of them. If you didn’t complete your degree, you could refinance through Citizens Bank. However, you’ll have to prove you’ve made 12 on-time payments before you refinance.
In some instances, certain refinancing companies, like Laurel Road, will only refinance student loans from a certain degree, such as an MBA or law degree.
Finally, you must be in good standing on your student loans in order to refinance. In other words, lenders are looking for borrowers with on-time payments, who are not in default.
The sooner you refinance the better, but it’s important to look at eligibility requirements for each lender, as they all have different standards.
If you’re still in school, unfortunately, you won’t be eligible for refinancing until you graduate.
Additionally, you will have to meet credit requirements that, depending on your credit history, could make refinancing difficult. For example, most private lenders expect you to have a credit score of around 700, though each lender will vary.
You also need to have a high enough, stable income (as dictated by the lender) to pay back your loans. That means refinancing might not be an option for lower income borrowers. The good news? If you have federal student loans, income-based repayment may be a better option anyway. If your income is truly an issue, you could qualify for payments that amount to as little as zero dollars — yes, you read that correctly.
As mentioned, if you are currently in default, you won’t be eligible for student loan refinancing, either. If you have federal loans and are facing default, you could rehabilitate your loans through a Direct Consolidation Loan.
Typically, student loan refinancing companies look at your credit score, employment, salary, and payment history to determine if you are eligible. As noted above, some lenders may want you to have a certain type of degree. It’s important to look at the eligibility requirements of each lender before pursuing refinancing.
Refinancing may seem like a sweet deal, but there are several important things you should know before making a decision. If you have federal student loans, you’ll lose the option to pursue benefits such as loan forgiveness or an income-driven repayment plan.
The process of refinancing is irreversible — you can’t go back to your old payment plan with your old terms. While refinancing can help you get a better interest rate and save you money, you forfeit federal student loan protections. If you only have private student loans to begin with, refinancing may be less of a risk.
Is Now the Right Time?
So you know refinancing sooner rather than later is a good option. You know what you may be giving up if you pursue this option. But is it the right time for you to refinance? Before you begin the process of refinancing, start preparing first.
You can check your credit reports from the three major bureaus at AnnualCreditReport.com and get your free credit score at Credit Karma to find out where you stand credit-wise. Also make a list of all your outstanding loan amounts and interest rates. Look up eligibility requirements for all lenders.
Now may be a good time to refinance if you have a good credit score (around 700) and a stable income, with a positive repayment history. Student loan interest rates are at historic lows, which could mean big savings for borrowers. On the other hand, if you are working in the public sector or if your salary is less than what you owe in student loans, you may want to pursue federal repayment and/or forgiveness options.
As a borrower, it’s important to look at all of your repayment options, including refinancing, to see what is the best option for you and your financial situation.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|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 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 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
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|