Launched in 2013, Earnest is an online lender that offers student loan refinancing and private student loans. Both types of loans are best for borrowers who want flexible repayment options, including a few built-in forbearance protections.
Earnest offers loans for students seeking undergraduate, graduate, business, law and medical degrees. Borrowers may qualify on their own or use a co-signer. Earnest also allows you to refinance your student loans.
Earnest’s best feature is its full menu of repayment options. Borrowers can choose from four main repayment plans, and during repayment, they may be able to tap into several defined forbearance and deferment programs. For example, you can request to skip a payment once a year. The lender also charges no fees and offers low interest rates on all of its loans.
Earnest student loan snapshot
Undergraduate, graduate, co-signed, business, medical, law, refinancing
Private loans: $1,000 to 100% of the cost of attendance
Refinancing loans: $5,000 to $500,000 (minimum $10,000 in California)
Private loans: Starting at 0.99% variable APR and 2.99% fixed APR (with autopay)
Refinancing loan: Starting at 1.88% variable APR and 2.50% fixed APR (with autopay)
Private loans: Not specified
Refinancing loans: 5 to 20 years
Pros and cons of Earnest student loans
Earnest’s student loans can be a great option if you need to fill in the gaps after maxing out federal student loans. But as with any financial product, there are downsides as well. Here are some pros and cons you should consider before applying.
- No co-signer needed. Unlike with other student loan lenders, you may be eligible for a student loan based on your credit history, income and other factors.
- Skip a payment: Earnest allows eligible student loan and refinance borrowers to skip one payment every 12 months. But keep in mind that this move extends your repayment term and counts toward your forbearance limits.
- Long grace period: Eligible borrowers can defer payments for up to nine months after graduation.
- $200 referral bonus: Every time you refer a friend who refinances a student loan, the lender will reward you with $200 cash. (The reward doesn’t apply for borrowers living in Massachusetts, Michigan and Kentucky.)
- No co-signer release: If you do have a co-signer on your loan, there are no options to remove them unless you refinance your loan.
- Average credit needed: Earnest requires borrowers or their co-signers to have a credit score of at least 650. If you have poor credit, then you may not qualify for a loan.
Earnest student loan requirements
Eligibility requirements vary based on which type of loan you’re taking out. Generally, all borrowers must:
- Be a U.S. citizen or permanent resident.
- Be at least the age of majority in their state.
- Live in Washington, D.C. or any state except Nevada (for any borrower) or Kentucky (for refinance borrowers).
- Have a minimum credit score of 650 (or have a co-signer with a minimum credit score of 650).
Independent undergraduate and graduate private student borrowers
If you’re a student with some credit history under your belt, you might be able to qualify for an Earnest student loan on your own. Keep in mind: Once you start attending school, you’ll need to be enrolled full time if you’re a freshman, sophomore or junior. Seniors and graduate students may enroll half time.
During the application process, Earnest will check that you have:
- At least three years of good credit history.
- A minimum annual income of $35,000.
- Zero bankruptcies on your credit reports.
- A history of making on-time payments on debt where you’re listed as the primary borrower. You also can’t have accounts in collections.
Co-signed loan borrowers
Many students don’t have enough credit history to qualify for private student loans — but you still have options. If you don’t meet the above qualifications, you can add a creditworthy co-signer to your loan. This person promises to make payments on your loan if you default later on.
They will need to meet the same eligibility requirements as independent borrowers. But Earnest may check more details about your co-signer’s financial situation, such as their savings account balance.
Refinance loan borrowers
Earnest has a unique underwriting system for refinance loan borrowers that looks at spending patterns, earning potential and education. There’s no minimum income requirement, but applicants must have either a consistent income or a written job offer. You may qualify even if you’ve filed for bankruptcy as long as it’s dropped off of your credit reports and you don’t have accounts recently in collections.
Earnest also wants to know that you typically spend less than you earn every month, keep at least two months’ of expenses in savings and show a pattern of increasing bank account balances.
And if you’re still in school, you must be enrolled less than half time, with your student loans already in repayment.
Who is this loan good for?
Earnest’s private student loans are best for borrowers who either can qualify on their own or have a creditworthy co-signer. Because the lender offers several repayment protections, it’s also a good fit for borrowers who prefer a measure of financial security.
Interest rates and terms
Earnest borrowers can get a 0.25 percent discount after setting up automatic payments. The rates below include this discount:
|Loan product||Variable rate||Fixed rate|
|Undergraduate student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|Graduate student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|Co-signed student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|MBA student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|Medical student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|Law student loans||Starting at 0.99% APR||Starting at 2.99% APR|
|Refinance student loans||Starting at 1.88% APR||Starting at 2.50% APR|
Fees and penalties
Earnest doesn’t charge origination fees, late fees, returned payment fees or prepayment penalties. However, Florida residents must pay a documentary stamp tax, which is calculated as 35 cents for each $100 borrowed. On a $10,000 loan, that works out to $35.
What are repayment terms and grace period for Earnest?
Depending on state limitations and your credit profile, you may be able to choose from four repayment plans:
- Deferred payments: Pay nothing while you’re enrolled in school and for a grace period of nine months after graduation. At that point, you start making full payments of principal and interest.
- Fixed payments: You pay $25 a month while in school and for nine months following graduation — then you’ll start full payments.
- Interest-only: If you have a co-signer, you can choose to pay only interest while in school and for the nine months following graduation.
- Full payment: If you have a co-signer, you can start making full payments as soon as the funds are disbursed.
If you’ve hit a rough spot once in repayment, Earnest offers a few forbearance and deferment options.
Forbearance is available to borrowers with either private or refinanced loans. Borrowers may be able to temporarily pause payments, up to 12 months, for the following reasons:
- Your income has involuntarily decreased.
- You’ve lost your job through no fault of your own.
- Your basic essential expenses have significantly increased.
- You’re on unpaid maternity or paternity leave.
- You request to skip a payment, available once a year.
You can defer payments while you’re:
- Enrolled in school at least half time.
- In the military.
You also might be able to access these options:
- Loan forgiveness and discharge in the event of death or total and permanent disability.
- Rate reduction program, which reduces your interest rate (and therefore monthly payment) for up to six months.
- Term and rate modification program, which extends your repayment term and lowers your interest rate.
Earnest gets an “A+” rating from the Better Business Bureau, the highest rating possible. When calculating ratings, the BBB considers the company’s complaint history and whether it resolved those complaints in an appropriate, timely manner.
Borrowers can contact Earnest’s customer service department by submitting a request online or by calling customer service at 888-601-2801. Hours are Monday through Friday, 8 a.m. to 5 p.m. PST.
How to apply for a loan with Earnest
For the initial check, you’ll need to provide basic demographic information, including your name, email address, postal address, birthdate, school name and credit score range. Earnest will also ask about your citizenship status, whether you earned income last year, the type of degree you plan to pursue and your expected graduation date. Then you’ll see a range of interest rates you may qualify for.
Once you start the official application, you’ll need your Social Security number. You also may need to supply proof of income, such as a pay stub, and permission to check your credit.
What to do if your application gets turned down
If Earnest doesn’t accept your loan application, it will tell you the reason. You may also get further clarification by calling customer service. Understanding why you were turned down can help when you’re applying to other lenders. There could also have been a processing error during the application process.
Every company sets its own lending criteria, so you might have luck with a different private student loan lender. Check out your options with Sallie Mae, Discover and Citizens Bank — they all offer competitive rates on undergraduate and graduate student loans. Shopping around and getting quotes from multiple lenders can help you get the best deal on your student loan.
How Bankrate rates Earnest
Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.