SUPPORT FOR PRIVATE LOAN CLIENTS
If you’re having trouble making payments due to the COVID-19 crisis, there is help. Be sure to contact us here so we can help you understand options that can fit your situation.
Here are some of the options available:
Short-term coronavirus forbearance (beginning July 1, 2020)
We understand that COVID-19 continues to affect many people’s lives. We’ve created a short-term option for clients who contact us for relief on or after July 1, 2020. For a limited time, Earnest is offering a short-term coronavirus forbearance to qualified clients who request it. This program brings your eligible loans current and postpones payments for at least one full month.
The short-term forbearance will not count against your hardship forbearance time. During this time, you will not be responsible for making payments but interest will continue to accrue. At the end of the short-term forbearance, unpaid interest will not be capitalized (added to your outstanding principal balance).
Coronavirus national emergency forbearance (through June 30, 2020)
In response to the national emergency declared by the President in March 2020, Earnest offered up to three months of disaster forbearance to qualified clients who made their request no later than June 30, 2020. This program brought eligible loans current and postponed payments for up to three months.
During this time, interest accrued but was not be capitalized (added to the unpaid principal) at the end of the forbearance period. (Please note if the accrued interest was not paid and you used a different type of forbearance or deferment in the future, the interest could be capitalized at that future time.) While no payments were required during the forbearance period, you could have chosen to make extra payments to help lower the overall cost of your loan.
Additional short-term and long-term relief is available (see below) to assist clients who experience difficulty due to the COVID-19 pandemic and its effects on the economy.
Other programs that may assist you:
- Short Term Interest Only Program – This program will allow you to make a lower (interest only) payment on your loan for up to 90 days. Your monthly payment will be lowered to an interest-only amount for up to 3 months, this will prevent the post-program monthly payment from significantly rising by extending the terms of their loan by the same number of months (3).
Making a payment, even a reduced one, is always the best thing long-term as interest continues to accrue. Forbearance will ease the burden of required payments, but making some payments still saves money in the long run.
- Other programs may also be available, learn more here. Please note that these options may require a review of your and any cosigner’s financial situation and ability to pay.
Frequently Asked Questions
Even though interest will not be capitalized at the end of a coronavirus forbearance, there are other considerations you should be aware of. Your Monthly Payment Amount may increase due to the additional interest accrued during the forbearance. Your repayment period will be extended by the number of months of forbearance you have used. And the total cost of your loan may increase due to both the additional interest and your extended repayment period.
These are limited-time programs. Our original three-month coronavirus national emergency forbearance will not be offered after June 30, 2020. The new short-term coronavirus forbearance begins on July 1, 2020 and will be evaluated on an ongoing basis. We expect that the short-term coronavirus forbearance program will be phased out over time, as the country reopens for business and COVID-19 cases decrease.
We strongly encourage you to explore your long-term options as soon as possible. There are several existing programs for clients who are experiencing difficulty but can pay a reduced payment amount.
You may be eligible for a standard hardship forbearance if your difficulty is unrelated to coronavirus or its impact on the economy, but note that all normal terms and conditions (including capitalization of interest) would apply. Please contact us here if you are nearing the end of your coronavirus forbearance and anticipate difficulty making payments.
The interest waiver announced by the White House is for federally held student loans only. Private education loans are not federally owned or guaranteed. Many of our clients have federally owned loans in addition to private student loans, so, other options may be available for those loans.
No. Earnest will report loans enrolled in the coronavirus disaster forbearance program as “current” with a payment history of “deferred” and a special comment of “affected by natural or declared disaster.” Any delinquency on your loan has been addressed with this forbearance; however, it will not remove any prior delinquency information reported to the consumer reporting agencies. If you have questions about the impact of this forbearance on your FICO score, please visit www.myfico.com.
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