Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.
When I first graduated from college, I had no idea what student loan refinancing meant. I was content to set up the Standard Repayment Plan on my $20,000 student loan and dutifully make payments for the next decade.
But as I learned more about refinancing, I realized I could both save money and pay off my loan faster. Instead of wasting my paycheck on interest, I could keep more of it for myself.
But I was nervous about making the wrong financial move. Here’s how I addressed my concerns and refinanced for better terms on my student loan.
I weighed the pros and cons of refinancing
Before making any permanent changes to my student loan, I did a bunch of research on refinancing. I learned how student loan refinancing works and weighed the pros and cons.
The pros were fairly straightforward. Refinancing could leave me with lower monthly payments and a more competitive interest rate. Over the years, I could save hundreds — if not thousands of dollars — on student loan interest.
I could also move away from my old loan servicer, Navient. Although I’d never had problems myself, I knew other borrowers had serious complaints about the company. Switching to a different lender felt like another benefit in my eyes.
But I would also be giving up a few things. By refinancing, I would be changing a federal student loan of $20,000 into a private one. As a result, I would lose access to federal programs such as income-driven repayment and forbearance. If I were to lose my job, I wouldn’t have the same federal protections to help me out.
Ultimately, I felt confident about my ability to pay back my loans. I had a steady income, and since I was a few years out of college my credit score was in decent shape. A strong credit score could mean competitive terms on a refinanced student loan.
The pro of saving money outweighed the con of privatizing my student loan. Confident with my decision, I kicked my plans to refinance into action.
I checked my rates with several lenders
My first step toward refinancing involved applying for a rate quote with various lenders. This rate check let me compare preliminary offers. It didn’t affect my credit score at all.
Although each rate quote application looked a little different, the process only took a few minutes. Most of the lenders asked for my name, salary, education level, and loan amount.
Then, they showed me preliminary offers for loans. Interest rates varied depending on the length of the repayment plan and whether they were variable or fixed.
After comparing my offers, I saw that Citizens Bank offered me the lowest interest rate. By choosing Citizens Bank, I would save the greatest amount of money on my student loan.
I compared my new student loan with my old one
My $20,000 student loan from Navient had a 5.96% interest rate, and I was chipping away at it on a 10-year plan. My payments were about $250 per month.
My research on refinancing, though, motivated me to pay off the loan faster. I couldn’t crush through $20,000 in one year, but I could swing a five-year repayment plan.
Citizens Bank offered me a five-year plan with a 4.99% fixed interest rate. By paying $100 extra per month, I’d get out of debt years ahead of schedule. Plus, I’d get an additional 0.25% interest rate deduction by setting up auto-pay.
Before selecting this offer, I used a student loan refinancing calculator to compare my old loan with the new one. By reducing my rate from 5.96% to 4.74% (with the rate deduction), I would save almost $2,700 in interest over the life of my student loans.
That amount of savings made the decision a no-brainer. I was ready to refinance my $20,000 student loan with Citizens Bank.
I filled out a student loan refinancing application
Once I chose my new loan terms, it was time to submit a full application. I entered my name and contact information, as well as details on my education.
To confirm this information, I had to upload two main documents: a recent pay stub from my employer and a billing statement from my student loan.
I was able to access both of these documents online. Then, I simply uploaded them to the Citizens Bank application.
Finally, I read over the forms to make sure everything was correct. At this point, all I had to do was hit “submit” and wait for approval on my refinanced student loan.
The entire refinancing process took a few weeks
Once I submitted my application, I didn’t have to do anything but wait to hear from Citizens Bank. After a few weeks, I got an email that my loan was approved.
I could log into my account and set up auto-pay from my bank account. By setting up auto-pay, I knew I wouldn’t miss a payment as I transitioned from Navient to Citizens Bank.
Within the month, I was notified that my Navient loan had been closed. I logged into my Navient account and confirmed that the new balance was indeed $0.
From start to finish, the entire refinancing process took less than a month. Now, I don’t have to think about my student loan, unless I want to throw an extra payment at it from time to time.
I’m confident that I have the best terms currently available to me, plus I’m on a repayment plan that makes sense for my income.
Getting out of student loan debt
The biggest lesson I learned from this process was how important it is to be proactive about your student debt. You don’t need to passively accept the standard plan you get straight out of school.
Instead, choose a plan that best fits your individual situation. If you can swing it, you could pay your student loans off ahead of schedule. Just imagine how good it will feel to never have another student loan bill.
However, refinancing isn’t the best financial move for everyone. Federal student loans, for instance, have some protections that most private lenders don’t offer. But if you feel sure you can pay back the loan, refinancing can make it easier.
For me, this process was empowering. By taking control of my student debt, I feel more confident about handling my money and taking control of my financial future.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|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 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|