Refinancing with Earnest
Refinancing rates from 3.21% APR. Checking your rates won’t affect your credit score.
When you learn about a fellow student loan borrower finishing off their debt, you might be eager to read their story — only to find it unrelatable to yours. Maybe the borrower didn’t have as much debt as you do, or perhaps they earned a six-figure paycheck that’s out of your reach.
Consider the essential elements of Student Loan Hero’s 50 (and counting) success stories, and your outlook might change.
On the surface, these ex-borrowers — from a social worker earning a $24,000 salary to a technology executive raking in $200,000 — have very little in common. Mixed in are teachers, lawyers, bloggers, an array of medical and financial professionals, and even a waitress and a nanny. Seventeen of them were repaying the debt they borrowed for a second or third degree.
They are also all over the map when it comes to repayment, reporting anywhere from $14,000 to $600,000 of education debt, with loan terms that range from seven months to more than 15 years.
Looking back, however, we’ve come to realize that despite their differences, these 50 borrowers succeeded by employing a very similar set of tactics.
1. Cutting spending
The greatest majority (34) of borrowers cited trimming expenses as a key factor in making progress on their repayment. Not all of these borrowers resorted to in-depth, line-by-line budgeting, but they at least consciously decided to cut back here and there.
Reducing routine costs allowed them to at least meet their minimum monthly payment, and in many cases to make extra loan payments as well. (See strategy No. 4, below.)
For example, Jon Barker repaid $130,000 in five years by replacing his “cash-guzzling hobbies” in favor of the free entertainment available at his local library.
To tighten your belt, consider some of our tricks for reducing spending.
2. Taking on a side hustle
You can budget only so much, but you can always increase your income. For 19 of the success story borrowers we’ve looked at, starting a side hustle made it possible to make larger payments to their lenders.
Kara Perez was among those who decided that a full-time job wasn’t enough to accelerate her loan repayment. To repay $25,000 in 42 months, she coached lacrosse, catered, and served as a production assistant, among a handful of other part-time gigs.
3. Selecting the debt avalanche or snowball method
Many student loan borrowers spread their monthly payments equally to their handful of creditors, hoping to reduce their overall dues one step at a time. But 19 of our interviewees relied on a one-loan-at-a-time strategy (while paying the minimum on their other loans, of course).
Eleven opted for the debt snowball method, attacking the smallest loan balances to close them out first. Among them, Jessica Garbarino repaid $56,00 in five years using the snowball method because, as she put it, “I am a firm believer that the small wins help keep you motivated.”
The other eight borrowers preferred the debt avalanche method, repaying the highest-interest loans initially to save as much as possible. Melisa Boutin, for example, hastened her repayment via the avalanche method, zeroing in on a foreign bank loan carrying a 9.00% interest rate.
Settle the snowball-avalanche debate for your own repayment.
4. Making extra payments
Fourteen of our out-of-debt borrowers recounted throwing every red cent they had at their debt until it disappeared. Some relied on salary increases, income tax refunds and even inheritances. We connected with one borrower — Cameron Battagler — who shortened his loan term by finding a $1,500 state grant, helping him repay a total of $30,000 in about 30 months.
It doesn’t take a genius to realize how much interest you could save by submitting additional payments. Our lump sum and prepayment calculators can help you figure out your potential interest savings.
5. Seeking help from loved ones
Nearly half of our ex-student loan borrowers weren’t in repayment alone.
A dozen of them gave credit to supportive family and friends, including 2016 graduate Caitlin Navratil who covered a $15,000 debt in 10 months. Navratil borrowed — and refinanced — on discounted interest rates from her mom and dad.
Another dozen success story subjects combined debt with their significant other for a team-oriented payoff. That included Danielle and Jonathan, who repaid $52,000 in two years, in part by calling each other “accountability partners.”
Even if you don’t have a loved one to lean on for monetary help in repayment, you could also tap certain family members or friends for student loan advice.
6. Refinancing to a lower rate
Consolidating your debt with a private lender — known as student loan refinancing — is right for some borrowers, but not for others. Refinancing might allow you to reduce your interest rate, for example, but it would also cause you to irreversibly lose federal loan safeguards like income-driven repayment.
For some borrowers, such as Schauren Hinson, refinancing was the critical plot twist that greatly eased repayment. Hinson, a nurse who repaid $70,000, managed to refinance her debt to the tune of a 3.00% interest rate via industry leader Earnest.
Unsurprisingly, each of the eight borrowers from our success stories who refinanced with a private lender had high debt loads but a stable career — five of them were medical professionals.
You don’t have to earn a six-figure income to qualify for refinancing, but a strong credit history goes a long way. You could also piggyback on a cosigner with stronger credentials.
Write your success story by finding the right repayment strategy
Of course, it’s impossible to capture every useful student loan repayment strategy in a sample size of 50 borrowers. After all, there are nearly 45 million Americans with outstanding education debt.
From income-driven repayment to receiving loan forgiveness and beyond, many other game plans work wonders for borrowers.
Among the success stories we’ve reported on so far, other useful (albeit less-used) plans included:
- Making in-school payments or transferring to a cheaper school
- Decreasing living expenses by moving abroad — or moving in with roommates
- Changing careers to increase income
- Setting a strict deadline for finishing repayment — and sticking to it
Of course, every borrower mixes and matches approaches that work best for their unique repayment.
Tallying up the strategies used by our 50 successful borrower stories, we found that only one was employed unanimously: Each person or couple maintained their motivation until the end of their repayment.
Once you’ve found your inspiration, find the other repayment strategies that will work for you. Then your own success story will write itself.
Interested in refinancing student loans?Here are the top 5 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Laurel Road.
Laurel Road Disclosures
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. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of March 4, 2020 and is subject to change.
2 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Splash Financial loans are available through arrangements with lending partners. Your loan application will be submitted to the lending partner and be evaluated at their sole discretion. For loans where a credit union is the lender, or a purchaser of the loan, in order to refinance your loans, you will need to become a credit union member.
The Splash Student Loan Refinance Program is not offered or endorsed by any college or university. Neither Splash Financial nor the lending partner are affiliated with or endorse any college or university listed on this website.
You should review the benefits of your federal student loan; it may offer specific benefits that a private refinance/consolidation loan may not offer. If you work in the public sector, are in the military or taking advantage of a federal department of relief program, such as income based repayment or public service forgiveness, you may not want to refinance, as these benefits do not transfer to private refinance/consolidation loans.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 1, 2020.
Fixed APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rate options range from 2.88% (without autopay) to 7.27% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Rates are subject to change without notice. Fixed rate options without an autopay discount consist of a range from 2.88% per year to 6.21% per year for a 5-year term, 3.40% per year to 6.25% per year for a 7-year term, 3.45% to 5.08% for a 8-year term, 3.89% per year to 6.65% per year for a 10-year term, 4.18% per year to 5.11% per year for a 12-year term, 4.20% per year to 7.05% per year for a 15-year term, or 4.51% per year to 7.27% per year for a 20-year term, with no origination fees. The fixed interest rate will apply until the loan is paid in full (whether before or after default, and whether before or after the scheduled maturity date of the loan).
Variable APR: Annual Percentage Rate [APR] is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Variable rate options range from 1.99% (with autopay) to 7.10% (without autopay) and will vary based on application terms, level of degree and presence of a co-signer. Our lowest rate option is shown with a 0.25% autopay discount. Our highest rate option does not include an autopay discount. The variable rates are based on the Variable rate index, is based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of April 27, 2020, the one-month LIBOR rate is 0.43763%. The interest rate on a variable rate loan is comprised of an index and margin added together. The margin is a fixed amount (disclosed at the time of your loan application) added each month to the index to determine the next month’s variable rate. Variable rate options without an autopay discount consist of a range from 2.01% per year to 6.30% per year for a 5-year term, 4.00% per year to 6.35% per year for a 7-year term, 2.09% per year to 3.92% per year for a 8-year term, 4.25% per year to 6.40% per year for a 10-year term, 2.67% per year to 4.56% per year for a 12-year term, 3.44% per year to 6.65% per year for a 15-year term, 4.75% per year to 6.93% per year for a 20-year term, or 5.14% per year to 7.10% for a 25-year term, with no origination fees. APR is subject to increase after consummation. Variable interest rates will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. The maximum variable rate may be between 9.00% and 16.00%, depending on loan term. The floor rate may be between 0.54% and 4.21%, depending on loan term. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
3 Important Disclosures for SoFi.
4 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 3.21% APR (with Auto Pay) to 8.77% APR (with Auto Pay). Variable rate loan rates range from 3.21% APR (with Auto Pay) to 8.72% 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 May 8, 2020, 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 5/08/2020. 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 protected], 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.
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 0.8100000000000002% effective April 10, 2020.
|1.99% – 6.65%1||Undergrad & Graduate|
|1.99% – 7.10%2||Undergrad & Graduate|
|3.21% – 6.67%3||Undergrad & Graduate|
|3.21% – 8.72%4||Undergrad & Graduate|
|3.22% – 6.05%5||Undergrad & Graduate|