Earnest is a newer player in the student loan refinance space. It started in 2012 and obtained its first round of venture capital funding in 2014. As a result, it is still a very small company compared to the industry giants such as Sallie Mae, Navient, and Nelnet. However, Earnest has been making a lot of waves in the student loan refinancing industry. Not only do they have a very generous loan-to-value ratio at 50%, but they also have a 0.25% rebate if you refinance with them, which can result in a savings of up to $1,000.
SoFi is one of the most well-known student loan refinance companies. It has been around for some time now and continues to gain popularity, especially among young professionals. However, it is not the only one on the market. One of its competitors, Earnest, is a relatively new company. SoFi vs. Earnest is a very popular topic in the industry and, as a result, it is constantly discussed in various forums.
SoFi and Earnest are financial companies that offer many services, including private student loans and student loan refinancing. These companies have common features, such as fixed and variable rates, rate offers that do not affect your credit history, and a 0.25% discount for automatic payment. However, it is the differences between them that will help you decide which company can best meet your student loan refinancing needs.
Let’s take a look at SoFi and Earnest student loan refinancing to help you find the refinancing option you need.
* Booth. * 30. April 2021
Note that refinancing with one of the private lenders will cause federal student loan borrowers to lose the benefit of a number of advantages. These include income-contingent installment plans, deferment and repayment programs, and debt forgiveness programs. Before you decide to refinance your federal loans, carefully weigh the pros and cons.
Earnest consists of a team of experts in design, mathematics, finance and technology. They use data science and optimized design to provide clients with a cost-effective, personalized financial experience. Earnest’s student loan refinancing service helps borrowers save money over the life of their loans. Consider the pros and cons of an Earnest refinance.
- Diverse application process : Earnest doesn’t just look at your credit score to get a rate estimate – other factors include your savings, education and earning potential.
- Individual maturity : If you are approved for student loan refinancing, Earnest allows you to set your desired monthly payment based on your budget. It offers 180 repayment options with terms ranging from five to 20 years.
- The ability to skip payments: Borrowers can ask to skip a payment every 12 months if unforeseen circumstances affect their budget.
- Flexible payment options: You can increase your repayment at any time to pay off your loan faster, and make additional or early repayments without early repayment penalties. You can also opt for biweekly instead of monthly payments.
- Internal maintenance : Earnest does not work with third parties. The company handles student loans internally; you will still have to deal with Earnest for your account.
- Minimum credit rating : You must have a minimum credit score of 650 to qualify for Earnest student loan refinancing.
- Site constraints : Earnest does not make loans in Kentucky or Nevada. The Corporation does not offer variable rate loans in the following states: Illinois, Minnesota, New Hampshire, Ohio, Tennessee and Texas.
- Without the ability to bail: Earnest does not currently offer a co-financing option for student loan refinancing, but is working to offer this option in the future.
SoFi is one of the most recognized names in student loan refinancing. More than 250,000 people have refinanced their student loans through SoFi, totaling about $18 billion in student loans. Compare the advantages and disadvantages of refinancing with SoFi.
- No hidden costs: SoFi does not charge any filing or recording fees. Moreover, there are no penalties for early repayment.
- Co-borrowers are allowed: You can add a co-borrower when you apply for a student loan with SoFi to enhance your profile.
- An adjournment will be granted: You can defer repayment of your student loan if you are returning to higher education part-time or full-time, are on disability rehabilitation or are on active duty.
- Additional benefits: All SoFi members have access to free professional coaching and financial advice.
- Not all SoFi loans allow for a waiver of the guarantee: The good news is that SoFi allows borrowers to add co-borrowers to their loan. Borrowers whose school loans were issued after May 1, 2019, may apply for bond forgiveness after making 24 consecutive full, on-time payments of principal and interest. SoFi does not offer a guarantee waiver for all its loans.
- Limited payment flexibility : While Earnest offers up to 180 different repayment terms, SoFi only gives you five options (five, seven, 10, 15 or 20 years).
Student Loan Planner recently interviewed borrowers who have refinanced their student loans with Earnest, SoFi and six other lenders. Participants were asked to rate different categories on a scale of 1 to 10 – a score of 1 means the participant had an extremely negative impression of the lender, while a score of 10 was extremely positive.
Earnest’s and SoFi’s overall lending scores were similar, as were their scores in other categories on topics such as application experience, customer service and website usability.
The reviews of lenders Earnest and SoFi are positive; their average scores for app experience, customer service and website experience are above 8.4 (out of 10).
The average rankings of Earnest and SoFi lenders were similar, but their rankings among the other six lenders with whom respondents refinanced their student loans varied slightly more:
Earnest’s results were good enough for second place in the areas of application experience and customer service. The lender ranks third in terms of website usability. SoFi’s credit ratings vary a bit more: Overall rating (5), app experience (3), customer service (6) and website usability (2).
Respondents’ feelings about SoFi and Earnest differ much more when it comes to the ratio of likes and dislikes. Those who refinanced their student loans were asked which of the eight lenders they liked the most and also the least.
The number of borrowers who indicated they liked the lender the most was divided by the number who indicated they liked the lender the least to determine the like/dislike ratio for each company.
As of January 2019, SoFi and Earnest had similar like/dislike ratios of 2.4 and 2.7, respectively. By the end of the year, however, the difference had widened slightly. Earnest’s ratio improved 4.5 points in December 2019, while SoFi’s improved just 0.4 points.
What caused such a jump in goodwill to Earnest instead of SoFi? This may be due to the acquisition of Earnest by Navient in 2017.
A parent company gives Earnest more capital, allowing it to offer lower rates. In addition, Earnest does not have to spend time fundraising and can concentrate on its clients.
SoFi, on the other hand, has several departments and does not devote as much time or attention to refinancing student loans. Reminder: Earnest ranks second in customer service in the survey, while SoFi is sixth out of eight companies.
It’s interesting and useful to see what salaries people make who refinance their student loans and what they do for a living. These factors can give you an idea of which lender you could refinance your student loan with based on what people in your pay grade and/or profession do.
Here are some results of our research on the salaries and occupations of the participants based on who they refinanced their student loans with:
- Nearly half (45%) of Earnest borrowers earn between $100,000 and $200,000 per year.
- The income distribution of SoFi borrowers was more balanced. Four of the five salary ranges fell between 20% and 25% of participants. Only the group with a threshold of less than $50,000 had less (7%).
- Thirty-one percent of physicians refinanced their student loans with SoFi, compared to 15% who used Earnest. This makes sense because SoFi does not put a limit on the amount borrowers can refinance – medical student debt can be very high.
- However, 33% of attorneys refinanced their student loans through Earnest.
- The occupations of Earnest and Sofi borrowers are evenly split between medical assistants (29%) and dentists (about 20%).
Ask me about your student loans
Respondents to our survey were also given the opportunity to provide detailed information along with their assessment of the lenders. Many of our respondents who recently refinanced their student loans through SoFi or Earnest had positive experiences.
- Lower interest rates and term plan, as well as referral premiums
- Reasonable monthly minimum payments reduce the pressure on cash flow.
- Good customer service, e.g. B. The representative took the time to explain what it means to overfund a loan.
- Simple and uncomplicated procedure and user-friendly website
- Good customer service – representatives respond quickly to questions and give clear answers.
- Allows other lenders to consider the case despite the borrower’s low income and lack of payment history.
If you’re looking to refinance your student loan to get a lower interest rate or a better term, SoFi and Earnest are great options. The question, however, is which lender is best for you. Both lenders have their advantages and disadvantages, which depend on your needs and preferences for student loan refinancing.
- You need a bail bondsman. Earnest does not currently offer a co-borrower option. Keep in mind that SoFi doesn’t offer escrow exemption on all loans – you’ll need to reapply to see if you qualify yourself.
- You refinance over $500,000. SoFi allows you to refinance student loans up to the total balance of the loan.
- They plan to go back to school or into active duty in the military. SoFi offers borrowers a loan deferral in such circumstances.
- You do not need a guarantor. If you have a strong credit history, refinancing with Earnest can be a viable option.
- You want flexibility in lending. Earnest allows its customers to skip a student loan payment once every 12 months if you’re having financial difficulties. Earnest also offers an automatic bi-weekly payment option.
- Your finances are in order. Earnest takes into account factors other than your credit score when determining whether to accept your application. The lender will want to know if you have enough savings to support yourself for at least two months, and if you are spending less than you earn.
A plan for a student loan
Refinance your student loan and receive a bonus in 2021.
BONUS of $1,000 for 100,000 or more. 200 for 50,000 to 99,999¹.
variable 1.99% – 5.64% APR1
fixed 2.98% – 5.79% APR1
1,250 BONUS2 For 250k+, tiered bonus from 300 to 500 for 50k-250k.2
1,275 BONUS3 For 150,000 and above. Multi-level bonus from 300 to 575 for 50k to 149k.3
variable 2.39% – 6.01% APR3
fixed 2.79% – 5.99% APR3
1,000 BONUS4 for $100,000 or more. 200 for $50,000 to $99,9994.
variable 2.25% – 6.43% APR4
fixed 2.99% – 6.88% APR4
1,050 BONUS5For 100k+. 300 bonus for 50k to 99k.5
1,250 BONUS6 for 100k+ or $350 for 5k to 100k.6
1,250 BONUS7 For $150,000 or more. Multi-level bonus from 100 to 400 for 25k to 149k.7
variable 1.91% – 7.69% APR7
fixed 2.95% – 8.49% APR7
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1Earnest: $1,000 for $100,000 or more, $200 for $50,000 to $99,999.99. For Earnest, if you refinance $100,000 or more through this site, $500 of the $1,000 cash bonus will be provided directly by Student Loan Planner. In the above price range, an additional discount of 0.25% is included for automatic paymentInformation on income.
2Laurierweg: If you refinance over $250,000 through our link and Student Loan Planner receives the loan, a $500 cash bonus will be paid directly to Student Loan Planner. If you are a member of a professional association, Laurel Road can offer you the choice of a reduced interest rate or the $300, $500 or $750 cash bonus mentioned above. The Laurel Road proposals cannot be combined. The above price range includes an additional 0.25% discount for automatic payment. Laurel Road Disclosure.
3Fairy If you refinance over $150,000 through this website, $500 of the above cash incentives will be provided directly by Student Loan Planner. Uncover Alfie.
4Sofi: If you refinance $100,000 or more through this website, $500 of the $1,000 cash bonus will be provided directly by Student Loan Planner. The above price range includes an additional 0.25% discount for automatic payment. Disclosure Sofi.
5Plain Obligation If you refinance over $100,000 through this website, $500 of the above cash bonuses will be provided directly by Student Loan Planner. General Bond Disclosure.
6Valid: If you refinance over $100,000 through this website, $500 of the above cash bonuses will be provided directly by Student Loan Planner. Reliable dissemination of information.
7LendKey : If you refinance over $150,000 through this website, $500 of the above cash incentives will be provided directly by Student Loan Planner. The above price range includes an additional 0.25% discount for automatic payment.
This source has been very much helpful in doing our research. Read more about sofi vs earnest reddit and let us know what you think.
Frequently Asked Questions
Is earnest good for refinancing student loans?
You have just graduated from college, and you are no doubt proud of your accomplishments: you have a shiny new degree, you know how to get your message out there, and you are ready to take on the world. You have also just acquired tens of thousands of dollars in student debt, which often makes it hard to get back on your feet financially. And you are not alone: student debt has more than tripled since 1995 (the last year you were in school), and now hovers at around $1 trillion. Earnest is a student loan refinancing company.
They make the process of getting a student loan refinancing easy. Anybody can apply for refinancing, regardless of your current situation. The application is straightforward and you will be provided with a fast, free of charge, no obligation quote. There are no hidden fees, no early repayment fees, and no prepayment penalties.
Is SoFi or earnest better?
In recent months, there has been a lot of coverage about student loan consolidation companies, such as SoFi and Earnest. These companies offer student loan refinancing options to students who have been in school for a few years and want to switch to a lower interest rate. However, they’re both relatively new to the market, and it isn’t clear how different they are from one another. As you are applying to college, you have a lot on your plate.
You need to think about choosing the right classes for the future, make sure you get good grades, and of course, you need to start thinking about filling out that dreaded application. But if you’re anything like me, then you might have a fourth thing to consider: should you refinance your student loans? After all, interest is accruing and loans cost money.
What is the best company to refinance student loans?
If you are a student who is struggling with their student loans, you might be wondering if there is a better way to finance your education. If so, you are not alone. Student loan debt is at an all-time high in the United States. And if you are like many students, you may be thinking it would be nice to have a simpler way to pay your student loans. One option that many students are considering is student loan refinancing.
Refinancing your student loans is a big decision that can have a big impact on your financial life. Before you start shopping around for the best student loan refinance rates, it is important to understand your options. If you have federal loans, you may be able to lower your monthly payments and reduce your interest rate through the Federal Direct Loan program. However, if you have private loans, it is important to consider all of your options before you refinance. (Insert optional description of the type of person the reader is, e.g. “you should go to a bank if you are conservative”)