After working to improve student loan refinancing for over 5 years, I’ve learned two fundamental truths:
- Student loan refinancing is a great option for those looking to get a lower interest rate or a lower monthly payment, and sometimes both.
- Navigating the world of student loans can be confusing (although we’re doing our best to fix this).
Refinancing with Earnest combines the benefits of private student loan consolidation to organize your multiple loans into a single bill, with the added benefit that you could receive a lower interest rate, more reflective of your financial progress since you first took out the loan.
With that in mind, I’ve written a quick guide on how to refinance your private or federal student loans with Earnest, and what sets us apart as a lender:
How to Refinance Your Student Loans with Earnest
Ready to take control of your student loan debt but not sure where to start when refinancing with a private lender? Let’s walk through each step of our process:
2-minute rate check
Before you invest too much time and effort (as well as a credit check), we want to make sure Earnest is the right lender for your student loan refinancing needs. By analyzing information beyond your credit score, we can provide an instant rate estimate (both fixed and variable rates) and guidance as to your likelihood of approval. It’s our way of getting to know you and confirming you’re eligible to refinance with Earnest.
Once you get your rate check results, you’ll move on to fill out an application. Here we ask for further information to fill out your profile—such as indicators of financial responsibility like your saving and spending habits. If you really want to speed along, have your current loan statement(s) with the loan amount(s), financial account login information, as you will be asked to link your account(s), your total annual income, and additional assets information.
Once you have submitted your application, we perform a hard pull to review your credit report. We also look beyond your credit score at data other lenders don’t—from your savings patterns to career trajectory, we consider your unique financial situation to provide rates and terms tailored to you.
While your application is in review, remember to keep paying your loans with your current servicer. Want to check on the status of your application? Once you’re signed in to your Earnest account, your loan status can be found by clicking on “My Loans” at the top of the page.
Finalize your loan agreement
Once the review process is complete, you’ll receive an email with your loan decision. If you’re approved to refinance, you’ll get your final rate and the opportunity to customize your loan terms.
With Earnest’s proprietary Precision Pricing algorithm, you can set your preferred monthly payment based on your budget and if you want to enroll in autopay. Here you decide if you are optimizing for quick repayment term with the least amount of interest paid, or reduced monthly payments to fit your budget. If you make more than the required payment each month you don’t have to worry, Earnest does not charge clients prepayment penalties.
You will have 30 days to accept your student loan refinance offer. If you have any questions throughout this process, check out our Help Center FAQ, or reach out to our Client Happiness team. Earnest does not charge an origination fee when you sign your new loan.
When Should I Refinance My Student Loans
Are you ready to get a lower rate on your education loans, but aren’t sure when the right time to apply is? Lenders are looking for a declining debt to income ratio, a strong credit history, and a pattern of on time debt payments. Did you just get a credit card paid off, repay another existing loan, or get a new job or raise to increase your income? Any of these can be a great catalyst in life to take another look at your personal finances and consider refinancing for your lowest rate to save on interest payments.
If you are a student who added a cosigner to their private student loan application, refinancing can also act as a cosigner release. This means your cosigner will no longer have the student loan tied to their credit and will be off the hook for making payments on the loan going forward.
Parents who took on a Parent PLUS loan to support a student’s education can apply to refinance for an interest rate reduction six months before the student’s graduation date.
Who Shouldn’t Refinance Their Student Loans?
Refinancing a federal loan might not be right for everyone. If you are utilizing a repayment program for a Direct Consolidation Loan with the federal government to pay down your loan balance, you would no longer have access programs with a private loan.
Graduates working towards loan forgiveness with a federal program, such as Public Service Loan Forgiveness, would also not want to refinance for a new interest rate, as they would no longer be eligible for forgiveness.
Why Refinance to a Private Student Loan with Earnest?
We are focused on empowering people with the financial capital they need to live better lives. Part of this is tailoring your student debt to a new loan and repayment plan that works for you.
There are many reasons to consider refinancing, but they all come down to building the best student loan program for you.
When you refinance loans with Earnest, you can:
- Pick any monthly payment and term from 5-20 years
- Select a variable or fixed rate for your new loan
- Never worry about fees for the life of the loan
- Skip one payment per year and make it up later1
- Make biweekly automatic payments
- Increase your payment or make extra payments anytime after signing to pay off your loan faster, with no fee or penalty
- Count on in-house servicing and customer support to answer any of your questions, Earnest will be your new loan servicer
1Earnest clients may skip one payment every 12 months. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time payments, and your loan is in good standing. This skipped payment will then be spread out across your remaining payments, resulting in an increase in your monthly minimum payment and interest will continue to accrue. Please be aware that a skipped payment will count towards the forbearance limits outlined in your loan agreement. Please note that skipping a payment is not guaranteed and is at Earnest’s discretion.
Terms and conditions to refinancing your loans with Earnest apply. See Eligibility criteria information at www.earnest.com/eligibility.