Refinancing with Earnest
Refinancing rates from 2.49% APR. Checking your rates won’t affect your credit score.
When you have student loans, going back to school can be a financial challenge.
While getting a new degree may be a winning strategy for making that next career move, you’re probably still in the midst of paying for your first degree. How are you going to pay for those student loans when you’re back in school?
One option is to refinance those federal or private student loans you took out initially. If this is the path you want to take, here are some things to keep in mind before you get started.
1. Your future income situation
Are you going back to school with student loan debt and plan to quit your job to focus on school? If so, refinancing your student loans will need to happen first.
Your income is an important factor when it comes to qualifying for approval on a refinancing offer. Once your income drops to zero, your chances for approval go down significantly.
The good news? You can shop for student loan refinancing offers now without taking a hit to your credit score. Many top student loan refinancing lenders start with a soft credit check, which won’t affect your credit score.
A lender will only do a hard credit check if you officially apply for one of their offers, which will ding your credit score by only a few points.
So go ahead and shop for the best offer now while you’re still employed full-time if you want to improve your chances of being approved for student loan refinancing later on.
2. Deferment options while in school
Before you move forward with a refinancing offer, it’s important to note that you might not be able to defer your student loan payments when you go back to school. Deferment can come in handy when you’re looking to pause your student loans payments temporarily.
In the world of private loans – including refinanced student loans – benefits and options vary by lender. So if deferment is a feature you were counting on, check with the lender you want to apply with to ensure they offer it.
3. Loss of federal student loan repayment benefits
If you want to refinance your federal student loans, you will lose access to federal benefits. That’s because once federal student loans are refinanced, they become private student loans. What’s more, private student loans don’t offer federal repayment benefits such as income-driven repayment plans and federal forgiveness programs.
Again, this is only the case with refinancing. If you consolidate your federal student loans via Direct Loan Consolidation, you still have access to federal benefits.
So if you were counting on these benefits while you’re in school or afterward, you might want to think twice about taking that refinancing offer.
4. Choosing the right type of interest rate
If your number one priority is lowering your interest rates, refinancing can help you do just that.
Plus, a lower interest rate can mean lower monthly payments, too. This is a great benefit if you think you’ll be able to make these payments when you’re going back to school with student loans.
That said, a refinancing offer will come with variable or fixed interest rates. Keep in mind that lenders will often list variable interest rates at a lower rate than fixed interest rates.
However, if you choose a variable interest rate, it’s possible your rate might increase during the life of your loan. If it happens smack dab in the middle of your new educational endeavor, that could spell trouble for you.
Also, don’t forget that rising federal interest rates can affect private student loans. When the federal rate increases, banks can increase the interest rates at which they lend to one another. These increases are then passed down to the consumers via the rates banks charge them.
In short, the interest rate on most types of debt can potentially increase when the federal interest rate goes up.
If you want to refinance for a lower rate, consider opting for a fixed rate, so you’ll know what you have to pay per month while going back to school with student loan debt.
When you have student loans, going back to school can be risky
If you think refinancing is the best way to decrease your interest rates and monthly payments for your student loans before heading back to school, make sure you fully understand the risks involved such as:
- Losing access to federal benefits for federal student loans, including deferment or income-driven repayment plans.
- Taking on a new monthly payment amount you might not be able to handle if you lack a source of income while you’re in school.
The good new is these risks aren’t insurmountable as long as you’re aware of them and prepared. If you plan your finances carefully before you enroll, you can always minimize the risks you take on. That way you can focus on what matters: improving your education and career prospects.
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 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 3.50% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.49% 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 email@example.com, 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 2.48% effective April 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.49% – 7.27%1||Undergrad & Graduate|
|2.49% – 6.65%3||Undergrad & Graduate|
|2.49% – 7.41%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.49% – 7.11%5||Undergrad & Graduate|
|2.98% – 9.72%6||Undergrad & Graduate|