Earnest Student Loan Consolidation
Earnest is another student loan refinancing option for students burdened by debt. Their philosophy is that "financially responsible people deserve something better" seems to influence their attention to detail when determining who receives a loan and what their rates should be. Through "better data analysis" they claim to give you the best possible rate, a practice that apparently contributes to client saving substantially on average.
How it Works
The first step is to find out if you qualify and what your rate will be if you do. To find this, you'll visit Earnest's website and fill out its quick form. It should take you about two minutes to fill out, submit and find what your rate will be.
From there, you can complete the application process. What separates Earnest from other lenders is they look at more than just your credit score. Other criteria they measure includes your saving behaviors, employment history, your investment profile and your earning potential. They use these metrics to gain a feel for your financial patterns; then armed with this data, they can tailor a loan that fit within your budget.
If you receive approval, you will have the opportunity to customize a loan program that fits your needs. As part of this, you will have the option to choose between fixed and adjusted rate programs and you have the flexibility to set up your payment amount based on 5, 10, 15 and 20-year repayment plans.
Earnest offers some fairly competitive interest rates with their refinanced loans. Like with other lenders, Earnest encourages you to set up auto pay by offering interest discounts and, like other lenders, the rates they advertise assume you would take advantage of this discount.
To qualify for refinancing with Earnest, they do have some requirements you need to meet. Here is a look at them:
- You must be a U.S. citizen and are at least 18 years of age or older.
- Your student loan debt is from paying fees for a Title IV school. The debt must also be from you or your children.
- The debt you want to refinance is for a degree already earned or you will earn at the end of your current semester.
- You must be the primary borrower on the student loans you want to refinance; you must remain the primary borrower when you refinance.
- You need to have employment or a written offer of one.
- There are residency requirements, meaning Earnest won't be applicable to everyone. To qualify for refinancing you must live in one of the following states: Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Massachusetts, Maryland, Maine, Michigan, Minnesota, North Carolina, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., Wisconsin, West Virginia and Wyoming.
Benefits of Using Earnest to Refinance Student Loans
Earnest uses a unique criteria system, as explained above, to determine qualification for loans. As such, if you qualify, you could receive exceptional interest rates as low as 2.13% APR on a variable loan and 3.50% APR on a fixed loan. If you have student loan debt, particularly with a private lender, you will find these rates attractive because they are much lower than what you are likely paying. By refinancing with Earnest, you could save on average $17,936, making them the smart option.
Another unique aspect of Earnest is the flexibility they offer you in repaying loans through their "Precision Pricing" program. They use data-driven methods to deterimine a fluid repayment plan based on your tailored financial profile. They will also allow you to switch your loan from a fixed to variable rate or vice versa for no fees anytime you need to. You can make bi-weekly payments to pay off your loans quicker and save on interest charges. You can also change your payment amount, due date and even skip a payment, then make it later. YOu can make extra payments and repay your loan early with no prepayment penalty.
There is so much flexibility here in how you repay your loans, which gives you back control. Unlike third-party student loan providers, who don't offer much in the way of flexibility, Earnest understands each borrower's needs are different, so they tailor personalized repayment solutions to reflect this.
Drawbacks to Consolidating with Earnest
The only drawback is not everyone will qualify to use Earnest for refinancing. For example, if you are still in school and want to be proactive in repaying your loan off, you won't be able to refinance it with Earnest until your last semester. Moreover, with the residency restrictions, you must live in one of the states mentioned above to be eligible for financing.
A Look at Earnest's Customer Service
They do not pass you off to third parties once you receive your refinanced loan. They handle your case from start to finish. This makes them a great option because you can gain a familiarity with the services they provide, acquire more knowledge of the options available to you and take control of repaying your student loans.
Earnest comes highly recommended by customer review site (which is pretty rare) and past clients seem to have been satisfied dealing with the company.
In the event you need to contact them, they have a live chat feature, email support and phone, which are available during normal banking hours Monday through Friday in Pacific Time. If you opt to email them, they say you will receive a response within eight hours. It's their focus on delivering excellent service that makes them a great lender to consider.
Verdict - Very Good
Earnest employs many refreshing tactics as a lender, like allowing you to choose any payment term between 5 and 20 years or the fact that they personally handle your loan without passing you to a third party. These factors coupled with their rates (that are comparable to the other top student refinancing lenders) make them an excellent option to consider.