If you’re considering private lenders to help you finance your education as a student, there are several reasons to consider Earnest as a potential lender. Earnest provides loans for a variety of educational circumstances including undergraduate and graduate loans, law school and medical school loans and even half-time student loans. Plus, applicants can borrow up to the cost of attendance for their school.
Below, CNBC Select provides a full breakdown of what you need to know about Earnest student loans. Read on to find out more.
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Undergraduate and graduate students, parents, health professionals
$5,000 minimum (or up to state); maximum up to cost of attendance
5, 7, 10, 15, years; up to 20 years for refinancing loans
Earnest
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Eligible borrowers
Undergraduate and graduate students, parents, half-time students, international and DACA students
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Loan types
Undergraduate, graduate loans, parent loans, MBA, medical school, law school, international and DACA student loans
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Loan amounts
$1,000 up to the cost of attendance for new loans, $5,000 to $550,000 for refinance loans
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Loan terms
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Borrower protections
Nine-month grace period available
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Co-signer required?
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Offer student loan refinancing?
Pros
- Nine-month grace period available
- No co-signer required
- 0.25% interest rate discount for autopay
- Qualified borrowers can skip one payment every 12 months
- Offers student loan refinancing
Cons
- No co-signer release option available
- Variable rates not available in all states
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 4.24% APR to 10.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 6.13% APR to 10.74% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
What can Earnest student loans be used for?
Earnest offers several types of student loans that can be used for undergraduate and graduate school, MBA school, medical school and law school. You can also apply for a parent loan and can apply for loans even if you’re an international student or if you’re refinancing an existing loan.
Another option Earnest offers is co-signed student loans. This just means that if you’re looking to get approved for better rates and terms, or if you’re concerned about being approved on your own, you can get a parent or other trusted family member to be your co-signer on the loan. According to Earnest’s website, co-signers can improve their student’s chances of getting approved by as much as five times.
How to qualify
In order to qualify for a student loan from Earnest, borrowers should attending or planning to attend school at an eligible four-year institution, and residing in a state where Earnest can lend money. Earnest can provide loans in all states except for Nevada.
They must also be a U.S. Citizen, a Permanent Resident, Deferred Action for Childhood Arrivals (DACA) or Asylee or have a cosigner who is.
There are also some additional criteria, depending on the specific type of loan you’re applying for and your circumstances as a borrower.
Co-signed student loan
You must…
- Have enough savings to cover at least two months of normal daily life expenses
- Spend less than you earn
- Have an increasing bank account balance
- Not carry large amounts of non-student and non-mortgage debt from credit cards, personal loans and other forms of debt
- Have strong on-time payment history
- Not be regularly charged late, overdraft or insufficient funds fees
Independent undergraduate student loan
Independent graduate student loan
You must…
- Not carry large amounts of non-student and non-mortgage debt from credit cards, personal loans and other forms of debt
- Have strong on-time payment history
- Not be regularly charged late, overdraft or insufficient funds fees
Parent loan
Terms, rates and fees
Interest rates can fluctuate depending on the benchmark rate set by the Federal Reserve but as of the time of this writing, Earnest offers rates starting at 3.19% with a co-signer and 4.89% without a co-signer. These rates are inclusive of a 0.25% autopay discount.
Of course, applying with a co-signer who has a better credit situation than you do can help you qualify for an even lower interest rate.
Earnest doesn’t charge any origination fees, prepayment fees or extra payment fees. The lender boasts zero fees on its student loans and according to its website, it generates revenue primarily from collecting interest.
Typical term lengths for Earnest student loans include 5, 7, 10, 12, and 15 years. Term length approval will depend on your credit report, the information provided in your application and other factors.
Student loan repayment options
Earnest offers four general repayment options: deferred, fixed, interest-only and full repayment.
The deferred option means that you pay $0 while you’re still in school and during your nine month grace period. However, you may still accrue interest on your loan balance even though you aren’t required to make a payment during this time.
The fixed option means you’ll make a fixed low monthly payment of just $25 while you’re still in school and during your grace period. After you graduate and your grace period has ended, you’ll then be required to make the full monthly payment. This option helps you get a small headstart on repaying your loan even if you can’t afford to make the full payment right away.
The interest-only option involves making payments that only cover your accrued interest while you’re still in school and during your grace period. Full payment will be due after your grace period ends. This option is only available to those with co-signed loans.
Lastly, the full repayment option, as the name suggests, involves making your fully monthly payment even while you’re still in school and after you graduate. As you can imagine, this option lets you pay the least amount in interest and helps you repay the loan the fastest. Of course, you should always choose the option that works best for your circumstances.
Benefits and features
Earnest offers a nine month grace period on their student loans. Depending on the repayment option you choose, full payment may not be due during this time.
This lender also lets qualified borrowers skip one payment every 12 months. You’ll pretty much enter a one-month forbearance that won’t affect your standing with your loan. To be eligible for your first skipped payment, you must have made at least six consecutive on-time payments in full. And then if you want to skip a payment for a second time, you must have made at least 12 more consecutive on-time payments in full.
You’ll also be required to submit a request form to skip a payment.
Lastly, Earnest offers a 0.25% discount for signing up for auto pay. This discount is also typically offered by many other lenders, though.
Earnest student loan pros and cons
Before applying for an Earnest student loan, consider these pros and cons.
Pros
- Offers multiple repayment options that may account for different needs
- Offers a nine-month grace period
- Offers a 0.25% interest rate discount if you sign up for autopay
- Offers the ability to skip one payment after making a certain number of consecutive on-time payments in full
- Offers both fixed and variable interest rates
- A variety of loan repayment terms
- Allows you to apply with a co-signer but a co-signer is not required
- Offers loans for half-time students
- Students can borrow up to the cost of attendance
Cons
- Not available in all states (the only state it’s not available in is Nevada)
- Doesn’t offer an option for early co-signer release
How to apply
To apply, you can submit an online application from Earnest’s website. Choose your desired type of loan and follow the steps to provide additional information.
How it compares
Ascent Funding is another solid student loan option but instead of offering repayment terms of up to 15 years like Earnest does, Ascent offers terms as long as 20 years. This can be a huge draw for someone who would prefer to have a bit more time to repay their loan despite accruing more in interest.
Another big difference between the two is that while Earnest allows you to borrow up to the cost of attendance for your school, Ascent only lets you borrow up to $200,000 for undergraduate loans and up to $400,000 for graduate student loans. Most borrowers probably won’t need to borrow this much money but if you happen to be someone who needs more than that, the lower funding limit from Ascent can definitely be a deal breaker for you.
Ascent® Funding
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APR
3.09% to 15.61% APR with autopay discount (undergraduate new loan). Other rates and loan types are available. Visit Ascent’s website for full details.
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Loan types
Undergraduate and graduate loans, MBA, medical school, dental school, law school, doctorate and Master’s, health professional loans.
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Loan amounts
$2,001 up to $200,000 for undergraduate loans and $400,000 for graduate loans
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Loan terms
5, 7, 10, 12, 15, 20 years
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Borrower protections
Deferment and forbearance options available
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Co-signer required?
For DACA recipients and non-U.S. citizens or permanent residents
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Offer student loan refinancing?
Pros
- Considers borrowers with no credit
- High loan limit
- Co-signer release available after just 12 payments
- Up to 1% interest rate discount for autopay
- 1% cash back rewards
Cons
- Maximum fixed APR is on the high side
- Doesn’t offer student loan refinancing
Funding U also has a few stark differences compared to Earnest. First off, Funding U only allows applicants to borrow up to $20,000 per school year. While this ensures that some students don’t borrow more than they may need, this limit may not be enough for some students.
Next, Funding U offers repayment terms of only five or 10 years, making it less flexible with repayment time horizon compared to Earnest, which offers repayment terms that range from five years to 15 years. Funding U also only offers fixed rate loans. However, one factor that makes Funding U a very attractive option is that it offers a 0.5% rate discount for making interest-only payments in school. Earnest doesn’t offer a comparable discount for doing the same thing, but it does offer a 0.25% rate discount for signing up for autopay.
Funding U
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Eligible borrowers
Qualifying undergraduate borrowers
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Loan amounts
Up to $20,000 per school year
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Loan terms
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Loan types
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Borrower protections
Forbearance options available
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Co-signer required?
Pros
- Considers borrowers’ earning potential
- Borrowers have hardship protections
- No co-signer required
- No fee for paying off loan early
- 0.5% interest rate discount for making interest-only payments in school
- Loan officer assigned to each borrower for hands-on help
Cons
- Only fixed-rate loans
- Not available in every U.S. state
- Non-cosigned loans tend to charge higher interest rates
FAQs
What is the minimum credit score required for Earnest?
Of course, it’s always best to apply with a higher credit score but Earnest lets those with a credit score of 650 or higher apply for a loan without a co-signer. If your credit score is below 650, you can still apply for a loan but you’ll need a co-signer.
Does Earnest do a hard credit check?
Earnest does conduct a hard credit check in order for you to officially apply for the loan and receive an outcome.
Does Earnest verify your income?
Earnest may take steps to review your income depending on the type of loan you’re applying for. Your income must come from a stable and verifiable source, according to the lender’s FAQs.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every student loan review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of student loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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