Refinancing with Earnest
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With student loan debt ballooning, a few states have passed legislation to form refinance programs. These programs help residents refinance student loan debt with lower interest rates. The Rhode Island Student Loan Authority (RISLA) offers one program you should consider, even if you don’t live in the state.
Rhode Island Student Loan Authority review
RISLA is a non-profit organization commissioned by the state of Rhode Island in 1981. Since then, it has provided programs to help make higher education more affordable. Services include loans, refinancing, college planning assistance, and financial literacy resources.
RISLA student loan refinance program review
Some of RISLA’s programs are for Rhode Island residents and students who attend college in the state. But its refinance program is open to anyone residing in the 50 states. Here’s an overview of the program.
With RISLA, you can refinance the following loans:
- Private loans
- Parent PLUS loans
- Stafford loans
- Subsidized and Unsubsidized Direct Loans
The program offers 5-, 10-, and 15-year terms and fixed interest rates. It also gives you a 0.25 percent discount if you set up automatic payments. Here’s a breakdown of the interest rates (including the discount):
- 5-year term: 3.49%-6.14% APR
- 10-year term: 4.24%-7.14% APR
- 15-year term: 4.74%-7.64% APR
You’ll also pay no upfront fees when setting up the new loan or prepayment fees if you pay it off early. You can refinance between $7,500 and $250,000. The maximum amount you can refinance depends on the highest degree you’ve earned.
RISLA requires that applicants have a FICO credit score of 680 and an annual income of at least $40,000. However, you can meet the income requirement with a cosigner.
Adding a cosigner
If you don’t earn enough to meet the program’s income requirement, you can combine your income with a cosigner who lives at the same address. If you and your cosigner do not live at the same address, at least one of you must earn the minimum.
In some cases, applying with a cosigner might be a good idea even if you earn enough on your own; it might qualify you for a lower interest rate.
Make sure your cosigner understands that RISLA does not have a cosigner release program. Once your income and creditworthiness improve, however, you may reapply to refinance without a cosigner.
Once you’ve refinanced through RISLA, you might qualify for an income-based repayment (IBR) plan. On an IBR plan, your monthly dues are 15 percent of your and the cosigner’s discretionary income or less, depending on your income and family size.
Additionally, your loans will be forgiven after 25 years of payments. Forbearance and deferment periods don’t count toward that 25-year timeline. Plus, your forgiven balance may be taxable.
RISLA also requires that you submit income and other documentation each year. Depending on changes in your income and family size, they may adjust your payments. See the full terms of RISLA’s income-based repayment plan on their website.
Forbearance and deferment
RISLA offers forbearance for up to 12 months for financial hardship. The program allows you to apply for forbearance in three-month increments.
Deferment is also available up to 36 months, but RISLA offers it only to graduate students. To qualify, the student must be attending school at least half-time.
Pros and Cons
If you’re interested in refinancing with RISLA, there are some key benefits and drawbacks to know.
Income-based repayment: Private student loan servicers generally don’t offer flexible payment options. Income-based repayment plans are especially rare. RISLA’s income-based repayment plan can help you stay afloat when you’re financially struggling.
Competitive rates: All of RISLA’s interest rates are fixed. With a cosigner, you might be eligible for the lowest rates available.
It’s not state-restricted: Unlike other state-based refinancing programs, RISLA doesn’t require you to be a Rhode Island resident. Borrowers across the country can take advantage of the program.
High income and credit requirement: RISLA requires an annual income of at least $40,000 to qualify. Some other refinancing programs have no minimum income requirements or require as little as $24,000 a year.
RISLA’s credit score requirement is also fairly high at 680, with or without a cosigner. If your debt load is bringing down your credit score, you might not qualify.
No cosigner release: It’s not a standard feature by any means, but some other refinancing programs allow you to release a cosigner without having to refinance again. With RISLA’s high eligibility standards, it might take you a while to improve your credit score and income standing to be able to refinance alone.
Can’t refinance Perkins loans: If you want to refinance your Perkins loans because you won’t qualify for cancellation, you’ll have to look elsewhere.
Applying for RISLA refinancing
You can apply online or by calling RISLA directly at 1-800-758-7562. During the application process, you’ll provide the following information:
- Name, phone number, email address, and permanent address
- Highest level of education completed
- Social Security Number, date of birth, and citizenship
- Driver’s license number
- Employment and income information
- Liquid assets
- Housing costs
- Details about the loans you wish to refinance, including the lender, payments, and balances
- Your desired loan term
After you apply, you’ll receive a preapproval response immediately. If you are preapproved, you’ll need to send RISLA the following documents to verify your information:
- Most recent billing statements for each loan you want to refinance (unless they’re existing RISLA loans)
- 60-day payoff amount for each loan you want to refinance (unless they’re existing RISLA loans)
- Pay stubs or another form of income verification
- W2s from the previous tax year
- Statements verifying your liquid assets
You can submit your supporting documents through RISLA’s website.
Should you refinance with RISLA?
If you meet RISLA’s income and credit requirements, its refinancing program might be a good option. If you have federal loans, you won’t have to give up an income-based repayment plan. You’ll also get access to competitive rates, especially if you have a cosigner.
If you might be eligible for federal student loan forgiveness, you might want to keep your loans where they are. The same applies if you already have a favorable interest rate. Also, with RISLA’s high minimums for income and credit scores, you might benefit from other refinancing options.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.23% 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
Savings example: average savings calculated based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were disclosed. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
Application detail: 5 minutes indicates typical time it takes to complete application with applicant information readily available. It does not include time taken to provide underwriting decision or funding of the loan.
Instant rates mean a delivery of personalized rates for those individuals who provide sufficient information to return a rate. For instant rates a soft credit pull will be conducted, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
Total savings calculated by aggregating individual average savings across total borrower population from 9/2013 to 12/2017. Individual average savings calculation based on single loans refinanced from 9/2013 to 12/2017 where borrowers’ previous rates were provided. Assumes same loan terms for previous and refinanced loans, and payments made to maturity with no prepayments. Actual savings for individual loans vary based on loan balance, interest rates, and other factors.
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
|2.47% – 6.99%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 6.23%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.95% – 6.37%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.72% – 8.32%6||Undergrad & Graduate||Visit Citizens|