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We put together a quick guide to understanding the transition period known as the 10-day payoff so you know exactly what’s happening when with your Earnest refinance.

After you are approved for an Earnest loan there is a transition period while we pay off your old loans and start your new one. With any loan you refinance (whether that’s a student loan, auto loan, or home loan), this is known as the 10-day payoff. To be sure, it sometimes takes a little more than 10 days, but this is a standard process you’ll find with many kinds of refinancing.

Before you start

Getting the correct 10-day payoff information before the clock is ticking is crucial.

The amount due in your 10-day payoff is the current loan amount from your old servicer—that includes the principal and interest accrued up until today—plus interest that accrues over the next 10 days. Each loan you’re refinancing will have its own 10-day payoff amount.

Payoff amount = Current loan amount + interest on the principal for next 10 days

The calculation is based on calendar days, not business days, so if your loan servicer allows you to calculate it yourself, be sure to select the right dates.

Based on what you report to us, Earnest will send a “payoff” check that covers this total amount so your loan is paid off in full.

Most loan servicers provide the 10-day payoff balance to you directly in your online account, along with other information you need including account number, loan number, and mailing address for a payoff check.

If you cannot get that information online, you may need to directly call or email your previous servicer to confirm the following: the payoff amount, account number, your individual loan numbers, and address for sending checks.

Be sure to confirm the information below before signing your loan agreement:

  • Payment address versus correspondence address: When you look at your billing statement, you may see a few addresses. Checks can only be processed at the payment or payoff address for your servicer so be sure you’re providing that address, not the correspondence address. Note: If you have private and federal loans with the same servicer, they may have different addresses.
  • Specific payoff amount for each loan: If you’re paying off some but not all of your existing loans, you’ll need the 10-day payoff amount for just the specific loans that you’re paying off. You may need to call your servicer to get this amount if it’s not broken down by individual loan for you on your statement.
  • Account number: Be sure to double check your account number when you’re entering this information. A typo could mean a check is applied to another person’s account, or a delay — both of which we want to avoid.

Our finance team will review payoff information before sending to ensure everything is complete but they’re not always able to confirm addresses or account information. Be sure to upload a full billing statement to your Earnest account so we can help you verify this information before we send out your checks. We may reach out to you if we have any questions at this step.

We know it can be difficult to find this information. If there’s any doubt, call your servicer directly to confirm. The better the information we get upfront, the easier the payoff process is.

10 day payoff

Day 0: Sign your Earnest loan.

Once you’ve obtained your 10-day payoff amount(s) and provided the information to us, be sure to sign your Earnest loan agreement on the same day. If you sign on another day, then you’ll need to re-check the amounts and update your 10-day payoff balances before signing so you can ensure your loan gets paid off in full.

After you sign your loan agreement, you’ll see “Payoff En Route” on your Earnest dashboard.

Day 1-3: Wait the cooling period.

Now Earnest must wait three business days by law before sending your payoff checks. This is known as a cooling period and it is a time where you have the right to cancel your new loan.

Day 4: Earnest sends payment to your old servicers.

Once this legal holding period is over, Earnest will send a check (or checks) via mail or electronic transfer to your current servicer(s).

We’ve been working hard to build relationships with loan servicers to make the process as simple as possible. With servicers that accept electronic transfers, we send the funds directly, which reduces potential issues.

If your previous servicer does not accept electronic transfers, the check is sent through the mail with explicit instructions about where the funds should be used (e.g., specific loans). If you tell us that there are certain loans you don’t want to pay off, those details will be included along with the check as well. While your payoff is being sent, you still have an active loan with your existing servicer. You won’t accrue interest on an Earnest loan until your servicer’s loan has been paid off so you’re never paying double interest.

Day 10: Your old loans are closed.

Once the check from Earnest clears, we’ll send you an email letting you know that your Earnest loan is active. If you have multiple loans, interest only accrues on the amounts that we’ve confirmed have cleared.

Always check in with your previous servicer to confirm that your loan has been paid down to zero when we let you know that your payoff has cleared.

Sometimes your check is processed early or late by your servicer which could leave you with a small balance or negative amount on your account.

The timing of the payoffs don’t always match up to exactly 10 days. If you see a negative balance, the payment will either go back to Earnest or back to you. Note, it can sometimes takes four to six weeks for the payment to arrive. If Earnest receives an overpayment, we apply that to your account as an extra payment.

If there is a remaining balance on your loan, we’ll ask you to pay off your servicer directly to your existing servicer account is paid in full. Now that you know exactly how it works, we are ready to help you get started.

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