Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
Refinancing your student loans can make a lot of financial sense. You could save money in interest and make managing your student loan payments a lot easier.
But you shouldn’t rush into refinancing student loans without taking a few preliminary steps. Preparing now to refinance your student loans can save you from headaches later on, increase your eligibility, and improve your chances for getting approved.
Here are 6 steps to take before refinancing student loans.
1. Check the Eligibility Requirements
The first thing you should do before refinancing student loans is check the eligibility requirements for each lender. You want to make sure you fully understand their requirements and have read all of the fine print so that you don’t waste your time. For example, SoFi doesn’t offer refinancing for residents of Nevada.
Before applying, do your research and check out the eligibility requirements for all lenders. You can see some of the refinancing requirements listed here.
2. Calculate Your Savings
Refinancing your student loans has the potential to simplify your payments, but you may qualify for a lower interest rate than the rates you have been paying. This is particularly true if you are in a better financial position now than when you had first taken out the loans.
However, this isn’t always going to be the case. It’s important to spend some time looking at what a lender will offer you versus what you already have.
If you have multiple loans, and only one has a high interest rate, it could be disadvantageous to consolidate all your students together to include loans with lower interest rates.
Spend some time with a student loan refinancing calculator and look over the fine print to make sure you’re considering a situation that will actually help you.
Choose a repayment term that works for you and helps you save money. Your monthly payments may be higher with a shorter repayment term, but you’ll save money on interest.
If you do choose a longer repayment term, make sure you’re comfortable with the tradeoff of extra interest charges in exchange for lower monthly payments.
3. Check Your Credit Score and Report
Before refinancing your student loans, do a check up on your credit score and credit report.
Your credit is what lenders look at to assess your creditworthiness — they want to know that you can pay back your loans in full and on time.
Start by checking out your free credit report at AnnualCreditReport.com. Your credit report offers a comprehensive view of your credit history, balances, and payment history. Look at it carefully to make sure everything is accurate.
In addition to your report, check your credit score. Your credit score is a numeric representation of your credit history.
Good credit scores generally tend to be at 700 or above, and most lenders require you to have a score in this range or above it. You can check your credit score for free on sites like Credit Karma or Credit Sesame.
4. Pay Down Credit Card Debt
If you’re also dealing with credit card debt, it makes sense to pay off as much as possible before refinancing your student loans. This is because it will affect your debt-to-income ratio (DTI), as well as your credit score.
Your debt-to-income ratio is one of the main ways that lenders can assess your viability as a borrower, so if you carry high balances on your credit card, it could affect your overall DTI.
In addition, carrying balances on a credit card will affect your credit utilization — or how much you borrow compared to your credit limit — which also affects your credit score. In general, it’s good to keep your balances at 30 percent or less of your credit limit.
Paying down credit card debt can benefit your overall DTI as well as your credit score, which could help improve your chances of getting approved for refinancing.
5. Gather Your Financial Documents
Lenders want to make sure you are legit and able to pay back your loan. As such, they will ask for various documents to assess your eligibility as a candidate. In order to help the application process move along seamlessly, you should gather your financial documents ahead of time.
Each lender will ask for different documents, but to prepare, gather your recent paystubs and your most recent tax return. In addition, create a document that has the following info:
- Your loan servicer’s information, including name, phone number, and address.
- A list of all your loans, including their balance and interest rate.
You’ll eventually need to grab your payoff statements from your current servicers, too, although this typically isn’t needed until after you’re approved for refinancing.
Having this information ahead of time can save you a headache down the line and prevent any delays on your application.
6. Look Into All Your Options
Refinancing student loans can make financial sense, but you want to look at all of your options before committing to refinancing. For example, if you work in the nonprofit sector you may be better off pursuing Public Service Loan Forgiveness.
When you refinance your federal student loans, you are giving up repayment options, including the options to defer payments or enroll in an income-driven repayment plan. Make sure to look into all your options and truly understand what you are going to be sacrificing before refinancing your student loans.
Keep in mind that you have various options when it comes to lenders for refinancing your student loans as well. Many borrowers shop around and apply to several lenders to get the best rates.
Refinancing can be a great option for many borrowers with federal and private student loans that have above-average interest rates. If you’re considering refinancing, use these steps to make the process easier and improve your chances of getting approved. Doing so can save you time and money.
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 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
|2.47% – 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|