Refinancing with Earnest
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When my student loans were in repayment, my salary from my full-time job wasn’t enough to cover my living essentials and my loan payments. To make ends meet, I took on different side gigs such as pet-sitting and house cleaning.
I wasn’t the only one in that situation. A 2017 survey from Bankrate found that 44 million people in the U.S. have some kind of side hustle. The earnings from these jobs can be lucrative; 25 percent of side gig workers earn over $500 a month.
However, lenders don’t always consider side hustle income when reviewing your loan application. If you’re looking to refinance your student loans to take advantage of perks like a lower interest rate or a different repayment term, not being able to list your side hustle earnings can be a huge problem. Thankfully, some lenders out there can help.
Student loan refinancing and side gigs
Refinancing my student loans seemed like a great solution. I could consolidate my debt and potentially get a lower interest rate. More of my payments could go toward the principal balance rather than interest, helping me save money and get out of debt sooner.
However, finding a lender was harder than I expected. One company after another turned me down because my salary was too low when compared to my high amount of student debt. While I made over $1,000 extra per month with my side gigs, most lenders wouldn’t consider that money as part of my overall income.
When you have a side hustle, you could bring in hundreds or even thousands on top of your salary — but it can only help you if the lender will accept your side gig as part of your household income.
As I discovered, few lenders will include side hustle earnings in your application review. These three lenders are among those that will.
CommonBond offers competitive interest rates and makes including side income easy.
When you complete the application, the company will ask you to enter your salary. However, unlike other lenders, they have an option for you to add other forms of income. You can add earnings from a second job like driving for Uber or waiting tables.
2. Laurel Road
According to Laurel Road, customers who refinance their loans through the company save $20,000, on average.
Additionally, the lender will let you pause your payments if you’re facing economic hardship. You can enter into forbearance for up to one year.
On Laurel Road’s application, it first asks you for your annual base income. But after entering the initial section, you can include additional income information such as bonuses and side hustle earnings.
LendKey is a unique option for refinancing. When you apply for a loan with LendKey, the lending platform searches its list of partners — which includes credit unions and other nonprofit organizations — to find you offers. That approach means you might find more flexible terms or repayment plans.
On the application, LendKey asks you to enter your total annual income, including all sources of funds. Include your side gig income here.
Completing the loan application
Once I found a lender that would consider my side income, I had to find a way to document it.
Most of my side gig clients paid me in cash. Although I tracked my earnings for tax time, I didn’t have a pay stub as proof. The absence of formal documents made the process a little more difficult, but I was able to overcome it by digging through bank statements.
If you want to include your side gig wages in your application, the lender will ask you for some proof of your earnings. These documents can help you show just how much you earn each month beyond your main salary.
- W-2: If you have a traditional second job, such as working in retail part time, your employer will send you a pay stub and a W-2 at tax time. By uploading them online with your application, the lender can see that your earnings are accurate.
- 1099: For those who do contract work or freelance on the side, your clients will send you a 1099 tax form if you did more than $600 of work for them. If you keep your 1099s together, you can use them to prove your annual income.
- Invoices: If your projects are typically under $600, you might not receive a 1099. Instead, you can show the lender copies of invoices you sent to clients to show your cash flow.
- App charts: If you have a side gig through a company like Uber, Shipt, or PostMates, the businesses usually provide a platform that shows your earnings by week, month, or year. Screenshots or statements of that data can be used in your application.
- Bank account statements: If you don’t have any of the above, you can also prove your income by providing several months of bank statements from your checking or savings account. The lender will consider all of the deposits in the account in its review.
By keeping good records, you can ensure the lender reviews all of your income when deciding whether to issue you a loan. In my case, my records proved my income. My lender approved me for a low-interest loan that helped me pay off my debt years ahead of schedule.
Choosing a refinancing lender
When it comes to student loans, launching a side gig can help you afford the payments and improve your financial situation. It can even make refinancing your loans possible, even if your full-time salary is too low for the lender’s eligibility requirements.
You can find side gigs that pay well and allow you to set your own schedule. By boosting your income, you can give yourself more security and breathing room in your budget.
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
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
|2.57% – 6.98%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.80% – 6.22%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.57% – 8.17%6||Undergrad & Graduate||Visit Citizens|