Refinancing with Earnest
Refinancing rates from 2.47% APR. Checking your rates won’t affect your credit score.
You’ve heard about refinancing student loans. Maybe you’ve even wondered if you would benefit from refinancing your student loan debt. Yet for some reason, you keep putting it off.
It’s not too late to refinance your student loans and take advantage of today’s low interest rates, freeing up money for other financial goals.
Read on to find out why now is the best time to refinance student loans.
1. Get a lower student loan interest rate – for now
If you have a higher student loan interest rate, refinancing can be one way to lower it. Currently, the best lenders that refinance student debt have variable rates as low as 2.47%, and fixed student loan rates at 1.95%. You’ll need excellent credit to qualify for the lowest rates in most cases; even if your credit isn’t amazing, it doesn’t hurt to get a few quotes and see if you can save.
You can take the refinancing quiz below to see if you’re likely to benefit from favorable student loan refinancing rates.
If you’re hoping to refinance to a lower student loan interest rate, you’ll need to act fast. In March, the Federal Reserve raised the Federal Funds rate, a key factor influencing current student loan rates. The Fed is expected to bump rates at least twice more in 2017, with the next rate hike projected for June. So if you’re hoping to get a lower rate by refinancing student loans, today’s rate offers are probably your best bet.
With higher interest rates on the horizon, student loan borrowers should move today to refinance their debt. Refinancing now will be key to take advantage of lower interest offers. It could also be smart to refinance from a variable-rate student loan to a fixed-rate loan to avoid potential rate increases in the future.
2. Cut your monthly payments
If refinancing student loans could result in significant interest savings for you, there are few good reasons to put it off. And every month you put off refinancing could cost you.
Take, for example, Silvia, a borrower who has student loan rates at 8.00%. If she is just entering repayment with a balance of $35,000, she will face monthly payments of $425. Refinancing to a rate of 5.00% over 10 years, however, lowers her payments to $370, saving her almost $55 a month, or $660 a year.
If she wanted to go the extra mile, she could use her $55 in interest savings as extra monthly payments on her new 10-year student loan. Those extra payments would save her another $4,481 in interest and shave 2.4 years off her repayment period.
Use the calculator below to calculate your potential savings after refinancing student loans.
Student Loan Refinancing Calculator
3. Free up cash flow for other goals
Clearly, refinancing student loans to a lower interest rate will produce savings over time. However, getting a lower interest rate isn’t the only reason to refinance. You can also refinance student loans to change your repayment term — either shorter or longer. If you opt to extend your repayment term to 15 or 20 years, your monthly payments will be significantly reduced.
Lower monthly payments free up funds you can use to work on other time-sensitive financial goals. Refinancing student loans has long-term benefits when you use this cash flow to make smart money moves. Maybe you use extra funds to save more for retirement, or you can use extra funds to put towards a down payment on a home.
While you will end up paying more in interest over the life of your loans, the trade-off for more immediate cash might be worth it for you.
4. Focus on paying down other high-interest debt
Refinancing now can help you save on interest to get rid of your student debt faster (depending on the term you choose). But you can also use those saving to pay extra towards more expensive debt instead.
For instance, maybe Silvia refinances to her lower student loan interest rate over 15 years instead of 10.
Her new monthly payments would drop to $277 a month, freeing up $148 a month (or $1,778 a year) to put toward other goals. And Silvia would still save $1,170 over the life of the loan, thanks to her lower interest rate.
Silvia also has a $6,000 credit card balance with an 18.00% APR. If she paid only her $120 minimum every month, this debt would take nearly eight years to repay and cost $5,170 in interest. But what happens if she adds the extra $148 from refinancing to her monthly credit card payments?
That extra $148 knocks out Silvia’s $6,000 credit card debt in just 2.3 years and saves $3,807 in interest. That’s $4,977 of combined savings on credit card and student loan interest.
5. The current administration hasn’t overhauled student loans yet
Perhaps you’ve been putting off refinancing because you’re holding out for changes to student loan policy that would make your debt cheaper or easier to repay. You could be counting on President Donald Trump’s campaign proposal for student loans, which suggested capping student loan payments at 12.5 percent of income and forgiving remaining balances after 15 years.
But should you count on it? The early Trump presidency has not prioritized the student debt crisis. And Secretary of Education Betsy DeVos has taken some administrative actions that weakened protections for student loan borrowers.
Even if Congress or Trump were to work on a student loan assistance plan tomorrow, that kind of legislation could take years to hammer out, improve, and pass. There are no guarantees that if Trump delivers on his promise, it will be in time to be of much help to today’s borrowers.
You can’t afford to leave your student loans and financial fate to politicians. If refinancing can help you save on student loan interest, go for this guaranteed savings over the gamble of betting on the future.
Refinance and reap the rewards
Of course, no one should rush into refinancing student loans without carefully considering their options. There are some downsides, too. Take the time to understand how refinancing will affect your student loans and payments moving forward before making a decision.
Once you’ve found a solution that makes sense, take action. You can quickly refinance student loans and start reaping the benefit before your next payment is even due.
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 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% 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|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|