Earnest, a leading student loan refinancing company, began offering private student loans in April of 2019. To make the experience as innovative as possible, Earnest incorporated 300 hours of user research with students, co-signers, and financial aid offices into building its lending process.
What resulted is flexible in-school repayment options, a unique range of loan terms, and a grace period three months longer than the industry standard. Students in financial hardship also have a variety of options to amend their payments.
While their features are robust, Earnest student loans can be difficult to qualify for. There are certain states Earnest doesn't lend in, eligibility requirements are rigid, and there is no release option for co-signers.
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Prequalification is available.
You have the option to skip a payment every 12 months.
There is nine-month grace period.
There are no fees.
Earnest is not available in all 50 states.
You must meet age-of-majority requirements.
You must be enrolled full-time.
There is no co-signer release.
- Prequalification is available. Before filling out a full application, Earnest will run a soft credit inquiry from Experian to show estimated rates without affecting your credit score.
- You have the option to skip a payment every 12 months. Borrowers can request a one-month forbearance every 12 months without going through a formal application.
- There is a nine-month grace period. Earnest offers a nine-month grace period on all its loan types, three months longer than the industry standard.
- There are no fees. Earnest charges no loan fees whatsoever, not even late payment fees.
- Earnest is not available in all 50 states. Earnest private student loans aren’t available to residents of Alaska, Connecticut, Hawaii, Illinois, New Hampshire, Nevada, Texas, or Virginia.
- You must meet age-of-majority requirements. To be eligible for a private student loan through Earnest, you must meet the age-of-majority requirement for the state where you reside. For most states that age is 18. For Alabama and Nebraska it’s 19, and in Mississippi it’s 21.
- You must be enrolled full time. If you are enrolled less than full time, you’re not eligible for a student loan from Earnest. In general, a full-time student is usually a student who takes 12 units, credits, or hours per term at an institution where the standard course load is equal to 16 units, credits, or hours.
- There is no cosigner release. If you apply with a co-signer, the only way to release your co-applicant from the loan is to refinance.
Earnest Student Loans Available
Undergraduate Student Loans
Full-time undergraduate students can get an Earnest student loan independently or with a cosigner. An interest rate is assigned based on your repayment term and the credit history of you and/or your cosigner. Students can choose from five loan terms from five to 15 years.
|Variable Rates||1.78% to 11.44%|
|Fixed Rates||4.39% to 12.78%|
|Loan Amounts||$1,000 up to the total cost of attendance|
|Loan Terms||Five, seven, 10, 12, or 15 years|
Graduate Student Loans
Earnest’s graduate student loans are available to students enrolled full time in a qualifying graduate, MBA, medical, or law school program. Medical students can defer their repayment until their residency is complete.
|Variable Rates||1.78% to 9.89%|
|Fixed Rates||4.39% to 10.99%|
|Loan Amounts||$1,000 up to the total cost of attendance|
|Loan Terms||Five, seven, 10, 12, or 15 years|
To be eligible for an Earnest student loan you must meet a lengthy list of requirements:
- You must have a Social Security number.
- You must live in the District of Columbia or a state Earnest lends in.
- You must be the age of majority in the state where you reside.
- You must be enrolled in school full time.
- You must be pursuing a bachelor’s or graduate degree.
- Your school must be a Title IV-qualified, not-for-profit, four-year institution.
- You must have no past-due balances for at least 365 days.
If you’re taking out a loan independently, you’ll have to meet some extra requirements:
- You must be a U.S. citizen or permanent resident.
- You must have a minimum FICO score of 650.
- You must have at least three years of credit history.
- You must have a minimum income of $35,000 per year.
If you don’t meet all of those requirements, you can apply with a co-signer who does. Both co-signers and students must have a history of on-time payments, with no accounts in collections or bankruptcies on their credit reports.
Earnest will take other factors of your finances into consideration when determining your eligibility. You should have enough savings to cover at least two months of normal expenses, including housing, spend less than you earn, have increasing bank account balances, and not carry large amounts of non-student, non-mortgage debt, such as credit cards, personal loans, etc.
Is Loan Prequalification Available?
Earnest offers an eligibility check and a rate check. To quickly check your eligibility, you’ll input some basic personal information, school details, and an estimated credit score to see your eligibility and if you might benefit from adding a co-signer.
Before you begin your full application, you’ll input an overview of your financial information, and Earnest will run a soft credit inquiry from Experian to show you your estimated rates without affecting your credit score. You’ll then be able to complete the application.
Earnest student loans are free of fees, meaning you’ll never be charged any application, origination, late payment, or prepayment fees.
Earnest offers a 0.25% interest rate discount for borrowers who enroll in its Auto Pay program. This discount is reflected in Earnest’s advertised rates.
Students have four repayment options while in school and throughout their nine-month grace period:
- Full Payment – While in school and following graduation, the full minimum monthly payments will be due. This is only available for cosigned loans.
- Interest Only – While in school and for the nine months following graduation, you’ll make monthly payments to cover the interest that accrued since your last payment. This is only available for cosigned loans.
- Fixed – You pay flat monthly payments of $25 while in school and for the nine months following graduation.
- Deferred – You pay nothing while you’re in school and for the first nine months after graduation. This option isn't available to residents of the following states: Alabama, Arizona, California, Florida, Massachusetts, Maryland, Michigan, North Dakota, New Jersey, New York, Ohio, Pennsylvania, and Washington.
Earnest offers repayment terms of five, seven, 10, 12, or 15 years. At the end of the application process, borrowers can see a summary of their loan options before signing. You can then choose between terms and in-school repayment options to customize a loan for your individual financial needs.
Earnest has a student loan refinancing referral program offering $200 when you refinance your student loan using your personal referral link or code. The company also hosts an annual scholarship program awarding $5,000 scholarships to 50 undergraduate students.
Are Co-signers Required?
Students who meet eligibility requirements don’t need a co-signer. However, a creditworthy co-signer can help you get a lower rate and open up the option for full and interest-only repayment options while you’re in school.
Forbearance and Loan Discharge Options
Earnest has a variety of options for borrowers going through financial hardships. The simplest is the option to skip a payment once every 12 months without applying for forbearance. You can also apply for up to 12 months of forbearance over the life of your Earnest student loan for several reasons:
- An involuntary decrease in income due to a reduction in hours, unpaid leave, or a change from full-time to part-time employment
- Involuntary loss of employment due to layoffs
- Significant increase in essential home or family costs, including medical expenses, emergency home repairs, and child care
- Unpaid maternity or paternity leave
Military members are eligible for a deferment during active duty and up to 180 days after demobilization.
Earnest also offers other means of assistance. If you can’t afford your full payment but can still pay something, it has a Rate Reduction Program that provides a reduced interest rate for a six-month period, lowering the monthly payment during that time. Should you become delinquent, the Term and Rate Modification Program can help you get current by extending your repayment term and reducing your interest rate. Finally, in the event of death or total and permanent disability, Earnest will discharge all of the borrower’s private student loans.
Length of Time for Loan Approval and Disbursement
You’ll see if you’re approved for an Earnest private student loan as soon as you complete the application process. You’ll then choose your loan, and Earnest will reach out to your school to certify enrollment.
Earnest says some schools certify loans within a few weeks of classes beginning, while others may have a three-to-five-week processing timeframe no matter when they receive your loan information. Earnest recommends applying as soon as you know you’ll need a private student loan to allow ample time for its disbursement.
Is Student Loan Refinancing Available?
Earnest has refinanced more than $8 billion in federal, private, and Parent Plus student loans. Variable rates start at a 2.39% annual percentage rate (APR) and fixed rates start at 3.20%. Both include an 0.25% rate discount for enrolling in Auto Pay. Students can refinance as early as their last semester of college.
As with its student loans, Earnest looks at more than your credit profile to determine your eligibility for refinancing. It will evaluate your savings, education, and earning potential to approve you. If you’re approved, you can customize your payment and term options using Precision Pricing.
Precision Pricing allows Earnest to offer terms at one-to-three-month intervals from five to 20 years, providing you with up to 180 repayment options. You can also set up biweekly auto payments to pay down the loan faster.
Out of 2,200 complaints the Consumer Financial Protection Bureau received about private student loan companies In 2019, 14 were about Earnest for varying reasons. If you have a question, Earnest’s customer service is available by phone Monday through Friday, from 8 am to 5 pm PST, at 888-601-2801, or by email.
Applying for an Earnest Student Loan
Earnest’s student loan application is available online and is mobile-friendly. It takes into consideration a borrower’s earning potential, and to determine that the application is exhaustive. Some of the things the full application asks for include:
- Security Number
- Educational and Employment Background Information
- Most Recent Tax Forms
- Link to Your Financial Accounts
- A Picture of Your Government-Issued Photo ID
Paying for College
Before you apply for private student loans, fill out the Free Application for Student Aid (FAFSA) and determine all your options for grants, scholarships, and federal student loans. For the 2019-2020 school year, federal student loans have a fixed interest rate of 4.53% for undergraduate loans and 6.08% for graduate loans. Once you’ve used all your federal options, or if the rates you’re approved for with Earnest are lower than that of federal student loans, then take out private student loans.
Is an Earnest Student Loan the Right Fit for You?
Earnest uses innovative technology to offer the most flexible repayment options of any student loan refinancing company. It already offers flexible repayment options for its student loans, but the possibilities for improvement are significant. Furthermore, in the case of unanticipated financial hardship, Earnest offers the most flexibility to help borrowers protect their credit scores by lowering payments and interest rates and offering forbearance programs.
However, while Earnest’s features are robust, its application-and-approval process is exhaustive, and loans aren’t available in all states. Students who are approved for an Earnest private student loan should compare rates to other lenders before making a decision.
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected over 45 data points across more than 15 lenders—including interest rates, fees, loan amounts, and repayment terms—to ensure that our content helps users make the right borrowing decision for their education needs.
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