Earnest Review: Student Loan Refinancing And Personal Loans

The entire loan process with Earnest takes place online, so you can apply online and get loan quotes in as little as two minutes.

In fact, private student loans are available for all levels of college attendance, including undergraduate and graduate school, as well as business, medical, and law school attendance.

Earnest has a lot of options for financing and refinancing student loans, so let's take a look. 

In the process, they created a company that combines data science, streamlined design, and exceptional service to offer a fast, low cost, and hyper-personalized financial experience.

The company provides private student loans for new students at all levels of the higher education process, as well as refinances of existing student loans.

They’ve also expanded into personal loans, which are unsecured loans that can be used for just about any purpose.

Earnest has refinanced $11.6 billion in student loans to more than 130,000 clients.

The company has a rating of A+, which is the highest rating on a scale of A+ to F by the Better Business Bureau.

Earnest Student Loan Refinances

Minimum and maximum loan amounts: $5,000 up to $500,000. Funds can be borrowed to partially or completely refinance your current student loan debt up to the maximum loan limit.

Minimum credit score requirement: 650. But, the higher your score, the lower your interest rate will be. All current student loan accounts must be in good standing and you need to be current on your rent or mortgage payments. Your credit report must not reflect a bankruptcy or accounts recently placed in collection.

Available loan types: Fixed rate and variable rate loans.

Loan terms: Five years to 20 years.

Qualifications: In addition to your credit score, Earnest also considers your savings, education, and earnings potential in calculating your interest rate. There are no maximum income requirements, and no debt-to-income ratio is disclosed.

Eligibility: You must be a US citizen or permanent resident alien, and either have graduated and be employed, or be within six months of graduating with a promise of employment that must be submitted with your application.

Availability: 47 states, plus the District of Columbia (the three exceptions are Delaware, Kentucky, and Nevada).

Loans eligible for refinance: Both federal and private student loans, as well as Parent PLUS loans.

Cosigner permitted: Cosigners are not permitted on student loan refinances. You must qualify based on your own credit profile and financial resources. In addition, no co-borrower can be added to your loan application even if that person is your spouse.

Forbearance Due to Economic Hardship

Earnest offers a long list of options if you are having difficulty making your payments:

Skip-a-payment – you can skip one payment every 12 months, but you must have made at least six consecutive on-time payments, and your loan must otherwise be in good standing.

Forbearance – available for an involuntary loss of employment or a decrease in income, or a significant increase in costs that are essential to the home or family, or unpaid maternity or paternity leave. You will be eligible for up to 12 months of forbearance, though simple daily interest will continue to accrue on the loan.

In the military – Earnest offers military deferment and SCRA benefits (caps your interest rate of 6%) to eligible service members.

Loan forgiveness and discharge – the loan will be discharged in the event of death or total and permanent disability.

Rate reduction program – you may be eligible for a reduced interest rate for up to six months, which will lower the monthly payment.

Term and rate modification program – combines the rate reduction program with an extended payment term.

Earnest Student Loan Refinances – Rates and Fees

Earnest does not charge an origination fee, prepayment penalties, or early or extra payment fees. The only direct fee they charge is up to $8 to pay charges assessed by any financial institution for processing a returned payment.

They do warn, however, that residents of Florida are subject to a stamp tax of 0.35% of the amount borrowed (for example, $35 on a $10,000 loan, $350 on a $100,000 loan).

Interest rates range from 2.44% to 5.79% APR on fixed rate loans, and between 1.88% and 5.64% on variable rate loans.

Earnest Private Student Loans

Minimum and maximum loan amounts: $1,000 up to the entire cost of attendance for the academic year.

Minimum credit score requirement: Same as for student loan refinances. Cosigners must have a minimum of three years credit history, with no history of bankruptcy on their credit reports and no accounts currently in collection.

Qualifications: Student or cosigner must have a minimum income of $35,000 per year.

Eligibility: You must be a US citizen or permanent resident alien, and attending a college or university accredited with the US Department of Education under Title IV.

Available loan types: Fixed rate and variable rate loans.

Loan terms: 5, 7, 10, 12 or 15 years on cosigner loans, or 5 or 7 years without a cosigner.

Grace period: Repayment terms are flexible and provide for deferment of up to nine months after graduation.

Availability: 49 states, plus the District of Columbia (Nevada is the exception).

Cosigner permitted: Cosigners are permitted and must meet the eligibility criteria described above.

Cosigner release: Earnest does not offer cosigner release. Cosigners must remain on the loan until it is fully paid.

Loan servicing: In-house by Earnest.

Mobile app: Mobile optimized website only.

Customer service: Available by phone, live chat, or email, Monday through Friday, from 8:00 am to 5:00 pm, Pacific Time.

Forbearance due to economic hardship: The same forbearance programs available for student loan refinances are also available for private student loans.

Earnest Private Student Loans – Rates and Fees

The fee structure for Earnest private student loans is the same as it is for student loan refinances.

Earnest offers six different private student loans:

• undergraduate
• graduate
• cosigned
• business
• medical,
• law school loans

Each type of loan carries its own interest rate structure.

They don’t publish interest rate ranges, but the rates for all six private student loan types start at 3.49% for fixed-rate loans, 1.24% for variable-rate loans.

Earnest Personal Loans

Earnest doesn’t make personal loans directly, but instead, offers them through a partnership with Fiona. Fiona is an online loan marketplace that matches you with a personal loan lender that will best meet your needs.

Personal loans are completely flexible loan types. You can borrow large amounts of money, which can be used for just about any purpose (except student loans). What’s more, the loans are completely unsecured, and carry a fixed rate, payment and term.

If you’re interested in a personal loan, you’ll click through the link on the Earnest website and be brought directly to the Fiona website. There, you’ll complete a brief, online application to get quotes from as many as eight personal loan lenders, some of whom are among the biggest names in the business.

The advantage of an online marketplace is that you can get competing quotes side-by-side. Armed with that information, you can choose the personal loan that will work best for you.

Below are the features of Fiona personal loans offered through Earnest:

Minimum and maximum loan amounts: $1,000 up to $100,000.

Loan Terms: Between two and seven years.

Interest rates and fees: Interest rates can run between a low of 5.99% and a high of 35.99%, based on your credit profile. None of the participating lenders on the Fiona platform charges an application fee. However, some will charge an origination fee between 1% and 6% of the approved loan amount, which will be paid only if the loan is approved and accepted. There are typically no prepayment penalties.

Minimum credit score requirement: Varies by personal loan lender, but the higher your score, the lower your interest rate will be.

Qualifications: Varies by personal loan lender, but you will need to be steadily employed with a predictable income that will comfortably support your current housing and debt payments, as well as the payment on your new loan.

Eligibility: You must be a US citizen or permanent resident alien, and either have graduated and be employed, or be within six months of graduating with a promise of employment that must be submitted with your application.

Availability: Available in all 50 states, but not all participating lenders make loans in all states.

Cosigner permitted: Cosigners are not permitted on personal loans. You must qualify based on your own credit profile and financial resources. Also, no co-borrower can be added to your loan application even if that person is your spouse.

Cosigner release: N/A.

Loan servicing: Varies by personal loan lender.

Mobile app: Varies by personal loan lender.

Customer service: Varies by personal loan lender.

Forbearance due to economic hardship: Forbearance is not available on personal loans.

How to Apply with Earnest

You must be a US citizen or resident alien living in the District of Columbia or one of the 47 states where Earnest lends. A resident alien must possess a ten-year, non-conditional, permanent resident alien card. If you are applying for a private student loan, you must be at least 18 years old or have attained the age of majority in your state of residence, unless your application will include a cosigner.

For both student loan refinances and private student loans, the college or university you are attending or have attended must be accredited with the US Department of Education under Title IV, and attendance either must lead to or have led to the attainment of a degree.

In completing the loan application, you will need to link your financial accounts to the Earnest application. That will give Earnest read-only access to your financial transactions. This is the way Earnest verifies your financial accounts, as well as to perform calculations they deem necessary in reviewing your application.

Eligible financial accounts in the application process must be based in the US and report balances in US dollars. Accounts that can be included are checking and savings accounts, retirement accounts, or investment accounts. Joint accounts are eligible for consideration, but shall be given credit for only half the balance in the account.

In some cases, Earnest may request that you upload a copy of your most recent income tax return. Qualifying income must be documented from stable and verifiable sources. Ernest looks to see that you earn more than you spend and that your income is high enough to support your current debt load plus the new financing you are requesting. Your rent or mortgage payment will be included in your total debt. Even if your current house payment is zero, Earnest will assume that situation could change over the life of the loan, and takes that into account in the underwriting process.

Once all documentation has been submitted, a decision will be provided within 2-5 business days.

To qualify for the AutoPay 0.25% rate reduction, you will need to link your checking or savings account to your Earnest account. But, you could also choose to pay by paper check or by ACH payments.

Consistent with all student loans, you will have 30 calendar days to accept or decline a student loan refinancing or a private student loan.

Earnest Pros and Cons

Earnest has a lot of pros to be aware of, as well as a few cons to consider.

Pros:

• You can apply for a loan in just two minutes.
• Earnest offers some of the lowest interest rates in the industry.
• There are no application or origination fees, and no prepayment penalties.
• Earnest is a direct lender.
• You have the option to skip one payment every 12 months.
• Very generous maximum loan amounts—up to $500,000 on a student loan refinance,
• Ernest offers at least six forbearance programs on both their private student loans and their student loan refinances.

Cons:

• Student loan refinances are not available in Delaware, Kentucky, or Nevada.
• Variable-rate student loan refinances are not available in Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, or Texas.
• You will be required to connect your financial accounts to the Earnest application for verification and approval purposes.
• Co-borrowers and cosigners are not available on student loan refinances or personal loans.
• Cosigners are permitted on private student loans, but no cosigner release provision is available.
• Earnest does not offer a mobile app, although the website is mobile optimized. 

Who Will Earnest Work Best For?

So who will Earnest work best for? The answer to that question will depend on what your circumstances are and what particular type of loan you need.

If you are currently struggling to pay several student loan debts at the same time, some of them with high interest rates, Earnest offers some of the very lowest interest rates available on student loan refinances. And, since they have no application or origination fees on student loan refinances, you won’t have any upfront out-of-pocket costs.

If you’re a current student or planning to enroll, you may find federal student loans (which should always be your first choice) don’t provide all the financing you need to cover the full cost of your education. Whether you’re an undergraduate, a graduate, or you are enrolled in a business, medical or law school, it’s likely you’ll need additional funds from private sources.

Earnest offers some of the very lowest interest rates available on private student loans. Their online application and underwriting process keeps costs lower than they will be with traditional brick-and-mortar banks, giving you the benefit of lower rates.

And, if you’re looking for a personal loan for any purpose other than financing your education, Earnest is partnered with Fiona, where you can get competing loan quotes from multiple lenders. You can borrow up to $100,000 on a completely unsecured loan.

For alternatives to Earnest, please see our guide, 10 Best Places to Refinance Student Loans.

If you’d like more information or you’d like to apply for a private student loan or personal loan, or refinance your current student loans, visit the Earnest website.