Refinancing with Earnest
Refinancing rates from 2.57% APR. Checking your rates won’t affect your credit score.
Student loan refinancing can be a great way to take control of your financial future. It may lower your interest rate and help you save thousands of dollars over the lifespan of your loans.
But before you make the major decision to refinance your student loans, how do you ensure you make the best decision?
We’ve got you covered. Here’s what you need to do before your refinance your student loans.
Step 1: Weigh the pros and cons
Before making any major changes to your student loans, make sure you understand the consequences of refinancing — not just the benefits.
When you refinance, you take out a new student loan to repay your old one. Ideally, the new loan will have a lower interest rate. Plus, you may choose a shorter repayment period so you can pay it off as fast as possible. (You can opt for a longer repayment period, too).
Refinancing may save you money and simplify your monthly payments. Instead of dealing with multiple loan servicers, you’ll work with just one. But if you’re refinancing federal loans, it also means you’re turning them into private debt with a lender like SoFi or CommonBond.
As a result, you’ll no longer have access to federal programs like income-driven repayment or Public Service Loan Forgiveness. If you’re worried about losing your income or working toward forgiveness, refinancing isn’t a smart move.
But if you don’t anticipate needing these federal options, refinancing could make your student debt more manageable. Make sure you weigh the pros and cons of refinancing before submitting an application.
Step 2: Determine your goals
Once you’ve learned about refinancing, decide on your personal goals. They might include:
- Simplifying multiple monthly payments to just one
- Lowering your interest rate
- Lowering your monthly payment
- Changing the number of years left on your repayment plan
- Moving away from loan servicers with bad customer service
By clarifying your goals, you’ll be better able to compare offers from lenders. Once you know exactly what you’re looking to accomplish, you can choose the offer that’s best for you.
Step 3: Get quotes from a variety of lenders
You might be surprised to learn you can browse initial refinancing offers in just a few minutes. Lenders look at a few basic factors to give you an initial offer. Typically, they ask for four main pieces of information:
- Total loan debt
- Former college or university
Some may also ask how much work experience you have to gauge how stable your income is. Other lenders want a sense of your monthly expenses, so they may ask how much you pay for rent or a mortgage.
At this point, a lender will provide you with initial refinancing offers. You’ll see a variety of plans with different repayment terms and interest rates. You can typically choose between a five, 10, 15, and 20-year plan, each with a variable or fixed interest rate.
Note that this initial request for a quote will not affect your credit score in any way. A lender will only run a hard credit check once you accept an offer and submit a full application.
If you’re not impressed with any of the offers, you might benefit from applying with a cosigner. If your cosigner has a strong income and credit, you could get more attractive loan terms.
Step 4: Do the math
When you’re comparing loan terms, it’s easy to get confused. Even if your new interest rate is lower, it’s tough to calculate exactly how much you’ll save or spend over the life of your loan.
Before choosing an offer, take the time to do the math. First, use a weighted average interest rate calculator to find one interest rate for all your current student loans.
Then, use a student loan refinancing calculator to compare your old loans with the new offers. This calculator will show you exactly how much you’ll save or spend over the life of your loans.
Let’s say you have $30,000 in loans with a weighted interest rate of 7%. You have eight years left on a 10-year repayment plan. When you applied for a refinancing quote, you qualified for a 5% interest rate.
Even if you started over with a new 10-year plan, you’d save over $1,000 in interest and lower your payments by $91 each month. If you refinanced to a 7-year repayment plan instead, you’d save over $3,600 on your loans.
A refinancing calculator can help you see exactly how much you’ll save and which repayment terms will best help your finances.
Step 5: Choose an offer and submit your application
Once you’ve chosen your lender and loan terms, it’s time to submit a full application. Have the following information and documents for refinancing ready:
- Proof of citizenship (social security number or government ID number)
- Valid ID number (driver’s license or passport)
- Proof of income (pay stubs or a job offer letter)
- Official statements for all your federal and private loans
- Cosigner’s information, if you’re applying with one
Some lenders also want to see proof of monthly housing payments or verification that you graduated college.
You’ll upload the documents and the lender will confirm whether or not it has all the information it needs. If you have questions, you can always contact customer service for help.
Most lenders give you a few months to get everything in order before your initial offer expires. But the sooner you apply, the better; that way, you can say goodbye to your old loan servicers and start saving money as soon as possible.
After you submit your completed application, the lender will run a hard credit check. The company needs to see your credit history to confirm your new loan. This hard credit check can affect your credit score, but your score will bounce back after you start making regular payments on your new loan.
Crossing the finish line with your new student loan
Once you’ve submitted the application, you’ll need to wait a few weeks to a month to get your new loan up and running. In the meantime, it’s important to continue making payments on your current student loans.
Before you stop paying your old loan servicers, make sure you have no outstanding payments left and all your previous accounts have been closed. Once that’s the case, all that’s left for you to do is set up autopay with your new lender.
If you follow these steps, you’ll be able to refinance your student loans quickly and with confidence. After all, knowledge is power — especially when it comes to your finances.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|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 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|