Refinancing with Earnest
Refinancing rates from 2.50% APR. Checking your rates won’t affect your credit score.
It’s hard to know where to turn for accurate student loan information. A recent federal government report said some student loan consultants hired by schools to provide counseling to borrowers might be giving bad advice.
Perhaps you should go to the source, right? Your student loan servicer should have all the info. That’s what Ingrid Haftel thought and did — until she realized her student loan servicer had been giving her wrong information.
That misinformation resulted in five years’ worth of payments essentially being wasted, money that Haftel assumed was going toward Public Service Loan Forgiveness (PSLF).
Can you trust your student loan servicer?
“I thought my servicer had the right answers,” Haftel said. “I had talked to them more than once about my eligibility for PSLF, and they told me I was on track.”
In addition to asking her servicer if she qualified for the program, Haftel filled out the employer certification form on its recommendation.
Unfortunately, Haftel didn’t realize her student loans were part of the Federal Family Education Loan (FFEL) program and therefore ineligible for PSLF. No one she talked with at the servicer told her that her loans didn’t qualify, and there was nothing on her servicer’s website to indicate that she had FFEL loans instead of Direct Loans.
It’s not just student loan borrowers working toward PSLF who were misled. Complaints about student loan servicers include:
- Lack of information about income-driven repayment
- Student loan processing errors
- Failure to help borrowers understand their options when coming out of default
This wrong information might not be intentional, according to student loan lawyer Jay Fleischman.
“Most borrowers are talking to a customer service representative who’s low on the totem pole,” Fleischman pointed out. “It’s really probably more of a training and education issue. Of course, that doesn’t let the student loan servicers off the hook. They need to provide better training for their employees.”
You can make choices that are only as good as your information, Fleishman said, and so far, loan servicing companies haven’t been held to account for leading borrowers astray.
Should you sue your student loan servicer?
During the past year, some borrowers decided to sue student loan servicers for compensation related to various issues. The Consumer Financial Protection Bureau (CFPB) has filed lawsuits against some companies, as have some state attorneys general.
“I thought about seeing if I could join a class-action lawsuit against my servicer,” Haftel said. “But there weren’t any such lawsuits pending against my servicer, although there are some against other servicers.”
She also considered suing her servicer on her own or checking if she could find a lawyer to start a class action. In the end, though, she decided it wasn’t worth the hassle.
Fleischman agreed. “In most cases, most of the money from a class action just goes to the attorney,” he said. “The borrowers only see a very small amount of it.”
When the government sues a servicer, it could result in big enough fines to force a change, but individual borrowers aren’t likely to see an immediate benefit, he said.
It’s possible to see better results when you sue a servicer on your own, but the process can be difficult and the outcome can be uncertain.
“Unless you can prove a certain amount of malice or that the servicer messed up in a major way, you probably won’t get much relief,” said Fleischman.
Instead, he urged that student borrowers should work to educate themselves. “I wish I could say servicers provide good information, but they don’t. It’s up to you,” he said.
How to protect yourself from wrong student loan information
“The best inoculation against misleading information is knowledge,” said Fleischman. “Before you talk to your servicer, do your research.”
That research probably can’t be done on your servicer’s website, as Haftel discovered. She found she was ineligible for PSLF only after logging into the National Student Loan Data System (NSLDS).
Once she accessed the NSLDS database and saw that her loans were from the FFEL program, she did more research and discovered that they weren’t eligible for PSLF.
“I got my loans just before the FFEL program ended, but after PSLF started,” Haftel said. “I didn’t realize going in they wouldn’t qualify. No one was clear about it with me at the time, and I was misinformed by my servicer since.”
Looking for information before talking to your loan servicer is important for other questions you have as well.
“Too often, servicers just put borrowers into forbearance, rather than taking the time to help them understand income-driven repayment,” said Fleischman. “They end up with unnecessary fees and they pay more interest as a result.”
If you can’t afford your student loan payments, Fleischman recommended learning about income-driven repayment plans before talking to your servicer.
“Rather than asking your servicer about options, go to the servicer and tell them what payment plan you want to go on,” he said. “They can help you verify that you qualify and get you squared away, but don’t expect them to volunteer any really useful information.”
Another option is to talk to a student loan ombudsman about your situation. The ombudsman is a neutral resource that can help you reach a resolution with your servicer, based on the facts of the case.
Consider refinancing your student loans
Because of the misinformation she received, Haftel ended up in a repayment plan that lengthened her loan term and resulted in more interest charges — without the prospect of loan forgiveness after 10 years. Starting over again with a PSLF plan doesn’t feel like the right move to her.
“I’m working on refinancing my student loans,” Haftel said. “I should be able to get a pretty good rate and an affordable payment.”
She is hesitant about it, though, because she’s worried about losing consumer protections such as access to income-driven repayment and other federal (and some state) forgiveness programs in the future.
Fleischman said refinancing your student loans can work if you have good credit and a high enough income to qualify.
“It’s one way to move forward and potentially save some money,” Fleischman said. “But remember that a private loan servicer might not be any more forthcoming than a federal loan servicer. No matter what, you are your best defense. You need to be vigilant.”
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 SoFi.
2 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 2.50% APR (with Auto Pay) to 7.27% 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 April 17, 2019, 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 04/17/2019. 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 our student 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.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed 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.
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.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
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 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.53% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|