Refinancing with Earnest
Refinancing rates from 2.46% APR. Checking your rates won’t affect your credit score.
When Rebecca Estelle was laid off, she got creative with her student loan repayment. Estelle called up her lender, SoFi, and was delighted to learn that they offered a three-month break from payments, plus career-services support.
“I was just trying to think of some ways to take the pressure off as I was searching for employment,” said Estelle, who found a new job within five months thanks, in part, to her SoFi-curated resume.
“A lot of my friends weren’t aware that this program existed, but that’s not a bad thing to ask about when you’re searching around and looking for a refinancing source,” she said.
Student loan refinancing with a shaky job status
If you’re looking to refinance your student loans but are worried that your job is on shaky ground, you’re already ahead of the game. Many find that bad news has a way of coming out of nowhere. Estelle, for example, had worked for a dozen-plus years at Swedish technology company Ericsson when she found out in October 2017 that she was out of work while still in student loan repayment.
Estelle admitted that she didn’t know about SoFi’s unemployment protection program when she chose the refinancing company to rework her parent PLUS loan. She was most concerned with savings (Estelle refinanced $16,537.45 that she had borrowed to send her daughter to the University of Texas at Austin, lowering her interest rate from 7.90% to 4.875%.)
But interest-rate savings and repayment-plan options are just a couple of the many ways to evaluate lenders. If you’re shopping around for refinancing, you’d be wise to ask lenders a simple question: What happens if I suddenly lose my primary source of income?
You might be surprised by the answer. Some lenders simply don’t offer forbearance — the ability to press pause on your repayment because of economic hardship.
You might think other lenders, like SoFi, go above and beyond your expectations.
Estelle, for example, said SoFi’s career-coaching perks easily trumped the outplacement program offered by her ex-employer. Estelle met weekly with a personal career coach provided by the lender. They improved her application materials, drawing compliments about her newly-formatted resume from one of the hiring managers she met with.
There were big-picture benefits too. Estelle saw SoFi’s program as allowing her to:
- Maintain her credit: Although SoFi reports the loan’s forbearance status to the credit bureaus, her payment history didn’t end up with missed payments that could depress her credit score.
- Focus on finding a job: With her loan payments temporarily out of the picture, she was less stressed about finances and had more energy for her job search.
- Pay for household expenses: Not having to make her monthly payment to SoFi also gave Estelle some extra room in her budget for the bare necessities.
Estelle was all the more happy with the results because she was so skeptical at the outset.
“When a company tells you that you don’t have to pay back your loan for a few months, you don’t know exactly what’s going to happen at the end,” said Estelle, who also received governmental unemployment assistance. “‘Was there some fine print I missed? Is this really going to sting me at the end?’ There were no surprises — the way they explained is the way everything turned out.”
3 more student loan refinancing companies offering unemployment protection
Not all unemployment protection policies are created equal. For each policy, you’ll want to review:
- Eligibility requirements
- The length of forbearance available
- Whether it affects any plans to release a cosigner from your loan
Even SoFi, which launched its program in March 2017, has some fine print to read. It offers up to 12 months of forbearance, in three-month increments, over the life of borrowers’ repayment. And like Estelle, you must have lost your job “through no fault of your own.”
Here are other lenders that could suit your refinancing needs:
As with SoFi, Earnest’s unemployment protection is restricted to an involuntary job loss. However, Earnest’s support also extends to borrowers in the following situations:
- Your income has decreased, for example, due to a reduction in your work hours
- You’re taking a leave from work to care for a child
Earnest also offers simpler flexibility options if your job situation isn’t tenuous enough to merit a full forbearance. For instance, you could move your payment date or skip one payment per year once you’ve made six consecutive, on-time payments.
CommonBond offers up to 24 months of forbearance over the life of your loan in cases where your income has decreased or disappeared.
There are a couple of eligibility requirements, however. For one, you must be less than 60 days delinquent on your repayment.
Citizens Bank, a more traditional lender (albeit with online operations), offers 12 months of forbearance in two-month increments. Its policy isn’t exclusive to job loss, catering to borrowers who experience other types of economic hardship, including trouble with medical bills.
You must make nine monthly, on-time payments before applying for forbearance. Electing forbearance also resets the clock on your path to cosigner release, if that’s a goal you have. You’d need to make three years’ worth of timely payments once you’re back from forbearance in order to remove a cosigner from your loan.
Read the fine print before choosing a refinancing lender
Keep in mind that lenders allow interest to accrue while you’re in forbearance. The interest capitalizes while you take a break from making payments, so don’t be surprised to find a larger student loan balance upon your return.
You also have the option of making interest-only payments during your forbearance to keep the size of your loan from growing.
But although accruing interest is a drawback of forbearance, Estelle said the unemployment protection she received paid significant dividends — specifically, it gave her time to get past her job loss so she could be prepared to continue her loan repayment.
A lender offering unemployment protection could be a boon for you too, but it’s wise to keep a healthy level of skepticism. Ask questions while you shop around; this way, you won’t be surprised by their answers when it matters most.
While you’re at it, explore other ways to vet student loan refinancing companies before choosing the best lender for you.
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 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 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
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|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.44%4||Undergrad & Graduate|
|3.05% – 6.47%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|