Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.
If you’ve already refinanced your student loans once, you know that doing so can save you money and make it easier to repay your debt. It only makes sense to wonder if you can go through the process multiple times to save even more.
Can refinancing private student loans more than once save you money? The short answer is yes, but you need to take a close look at the details before you refinance your student loan debt again.
Refinancing private student loans again could save you money on interest
If you’ve gone through the process of refinancing student loans, you know it involves taking out a new loan with different terms, often from a new lender. It can also involve the consolidation of multiple debts into one.
Since you refinance with a private student loan company, any federal loans turn into a private one. Refinanced private student loans remain private, but again, they might have entirely new terms.
Not only can refinancing simplify your monthly payments, but it also saves you money if you qualify for a lower interest rate. For example, let’s say you owed $30,000 on a few different loans with an average weighted interest rate of 7.00% and a term of 10-years.
After refinancing, you still owe $30,000, but you only have to keep track of one monthly payment. Plus, your new interest rate is 5.00% with the same 10-year term.
If you choose the same 10-year repayment plan, you’ll save $3,615 on interest over the life of the loan. You might even choose a shorter repayment term to pay less interest over the life of the loan and get out of debt faster.
So it stands to reason that refinancing for a second time could save you money if you qualify for an even lower interest rate at the same term.
Of course, there’s no guarantee you’ll get a lower rate the next time you apply for refinancing. The rate is based on a few factors, including current market rates, your income, and your credit score.
If you’re making a lot more money than you were when you first applied for refinancing, this could help your case. You might also be a more attractive candidate if you’ve built your credit score into the excellent range.
So if you can submit a stronger application this time around, it might be worth checking your rates again with student loan refinancing lenders. If you can get an even lower rate by refinancing for a second time, you could save money on interest and pay your student loans off even faster.
Be careful about extending the life of your loan
Qualifying for a lower interest rate can save you money, but be careful when it comes time to choose new repayment terms.
Let’s say you chose a five-year repayment term when you refinanced student loans the first time around. You’ve already been paying for a year, so you only have four years left before you’re debt-free.
If you refinance for a second time and choose another five-year term, you’ll actually be adding a year to the life of your loans. You’ll be in debt for longer, so you might pay even more in interest overall, even if you qualify for a lower rate.
In this case, refinancing private student loans for a second time wouldn’t help you save money or get out of debt faster. It could be useful if your goal is to lower your monthly payments by spreading them out over a longer period of time.
But it wouldn’t be a solution if your aim is to save money. So before refinancing private student loans for a second time, make sure you understand your new repayment terms and how they affect your debt.
Make sure extra costs don’t outweigh the benefits
Not only could extending your repayment term cost you more money, but you might also pay more in extra fees. Some lenders charge an origination fee for disbursing a new loan, so that’s an added cost when you refinance.
Of course, not all lenders charge fees for refinancing private student loans. SoFi, Laurel Road, and Earnest, for instance, don’t charge any fees for disbursing the loan or paying it off ahead of schedule.
Again, it’s important to read over the details of an agreement before refinancing again to make sure the costs don’t outweigh the benefits.
Check your rates to see if refinancing again makes financial sense
When it comes to refinancing private student loans, there’s no rule that says you can only refinance once. If interest rates have dropped — or if you’ve improved your creditworthiness since the first time you applied — you could benefit from refinancing again.
And if qualifying for a lower rate is your goal, take steps to build your credit. Make sure to pay all debts and credit card balances in full and on time every month. Try not to close your oldest credit accounts, as part of your score is based on the length of your credit history. And keep your credit-to-debt ratio lower than 30%.
By taking these steps, you’ll be an even stronger candidate when you apply to refinance student loans. Another way to boost your application is to apply with a creditworthy cosigner. Whatever you choose, it’s easy to check your rates with multiple lenders to see if you prequalify for lower rates.
As long as you’ve crunched the numbers with our student loan refinancing calculator — and carefully read over the details of repayment and fees — you could save money by refinancing again.
Kali Hawlk contributed to the reporting for this article.
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|