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Enrolled full time at eligible Title IV school, 650+ credit score, $35,000+ income, clean credit history, live in eligible state, US citizen or permanent resident, age of majority
Enrolled full-time at Title IV nonprofit 4-year school
Anna Serio is a trusted loans expert who's published more than 800 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Fundera, Business.com, and ValueWalk feature her professional advice, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
Expert Review
Review by
Anna Serio
Earnest’s longer-than-average nine-month grace period and flexible in-school repayment options make it stand out from other private student loan providers. With a wide range of loan terms to choose from, you can pick a repayment plan that best fits your monthly budget. And you won’t have to worry if you occasionally can’t make a payment on time — Earnest charges zero late fees. It also comes with the option to skip a repayment once a year.
However, you’ll want to make sure Earnest is available in your state before applying — there are 11 it doesn’t lend in. And if you want to take your cosigner off your loan down the road, your only option is to refinance it in your own name.
Earnest’s longer-than-average nine-month grace period and flexible in-school repayment options make it stand out from other private student loan providers. With a wide range of loan terms to choose from, you can pick a repayment plan that best fits your monthly budget. And you won’t have to worry if you occasionally can’t make a payment on time — Earnest charges zero late fees. It also comes with the option to skip a repayment once a year.
However, you’ll want to make sure Earnest is available in your state before applying — there are 11 it doesn’t lend in. And if you want to take your cosigner off your loan down the road, your only option is to refinance it in your own name.
Earnest has two sets of eligibility requirements: one for students and one for cosigners. Students who apply on their own must meet both sets of requirements.
Enrolled full-time at a Title IV nonprofit four-year institution
Studying for a bachelor’s or graduate degree
Resident of an eligible state
Social Security number
Age of majority in state of residence
650 credit score or higher
At least three years of credit history
$35,000 annual income or higher
No bankruptcies on credit report
History of on-time repayments on credit report
No accounts in collection
Resident of an eligible state
Age of majority in state of residence
US citizen or permanent resident
Earnest considers several factors beyond your credit rating when assessing your application:
Savings. You or your cosigner need to have enough savings to cover at least two months of personal expenses — including housing.
Spending. You must show that you spend less than you earn and have increasing bank account balances.
Debts. You might have trouble qualifying if you have a lot of debt, excluding other student loans and mortgages.
Payments. You must demonstrate a history of on-time repayments and not be regularly charged late, overdraft or insufficient funds fees.
What states are Earnest private student loans available in?
Earnest student loans are available in Washington, DC and all states except the following:
Alaska
Connecticut
Deleware
Hawaii
Illinois
Kentucky
New Hampshire
Nevada
Ohio
Texas
Virginia
How do Earnest private student loans work?
Earnest private student loans work by directly sending money to your school to cover up to your full cost of attendance. Earnest recommends that you first apply to grants, scholarships and federal aid and also consider what your family can afford to pay before turning to its private student loan option.
You can apply online on your own or with a cosigner. If approved, Earnest confirms your loan amount with your financial aid office and sends the funds directly to your school. You can choose to start making full or reduced repayments right away to save on interest. Or you can hold off on repayments entirely until nine months after graduation.
Does earnest offer parent loans?
No, Earnest currently only offers loans to students.
How much do Earnest student loans cost?
Earnest doesn’t charge any fees to apply, nor does it have any late payment or prepayment penalties. So the main cost you need to consider is interest. Earnest offers both fixed and variable rates. Fixed rates start at 4.39%, while variable rates currently start at 2.74%.
Fixed rates might be higher, but they give you regular, predictable repayments. Variable rates have the potential to increase or decrease, depending on the lending market. To protect borrowers from unexpected changes in the lending market, Earnest caps variable rates at 8.95%, 9.95%, or 11.95% depending on the loan term.
How Earnest’s terms and repayment plans affect the cost
How much you pay in interest depends on two factors: your loan term and repayment plan. Earnest’s terms run from 5 to 20 years. Its has several repayment options that allow you to hold off on or reduce repayments while you’re in school or facing financial hardship.
The longer you take to pay off your loan or let interest add up, the more your loan costs in the long run. But a longer term gives you monthly repayments that are more affordable. Deferring your loan or making repayments lower than interest also makes your loan more expensive, since all unpaid interest gets added to your loan balance.
Does Earnest offer any discounts?
Yes, borrowers can qualify for a 0.25% rate discount when they sign up for automatic repayments.
What are my repayment options?
Earnest has four repayment options while you’re in school and the nine months after you drop below half-time enrollment. Payments typically begin between 23 and 58 days after Earnest disburses your loan, with the exception of deferred repayments.
Deferred repayments
Lowest immediate cost, highest long-term cost
Not available in all states
Deferred repayments allow you to hold off on repayments entirely until your grace period is up. This option is available to borrowers who applied both with and without a cosigner. However, residents of a handful states are ineligible.
Alabama
Arizona
California
Florida
Massachusetts
Maryland
Michigan
North Dakota
New York
Pennsylvania
Washington
Fixed repayments
This option allows you to make $25 monthly repayments until your grace period is up. Depending on how much you borrow, this option can help you reduce the amount of interest that Earnest adds to your loan. Or if your interest payments are lower than $25 a month, it can also help you get a head start on repaying your loan.
Fixed repayments are available to all borrowers.
Interest-only repayments
Only available on cosigned loans
Make payments on the interest that adds up while you’re still in school and during your grace period. This option helps you avoid having interest added to your balance and makes your monthly repayments less expensive. You must apply with a cosigner to be eligible.
Full repayments
Highest immediate cost, lowest long-term cost
Only available on cosigned loans
Begin making full repayments on your loan balance and interest 23 to 58 days after your loan is disbursed. This is the least-expensive option since you’ll pay less interest and avoid having any unpaid interest added to your balance. However, you must apply with a cosigner to be eligible.
Does Earnest offer deferment or forbearance?
Yes, Earnest offers forbearance if you face a financial hardship that affects your ability to repay. This can include:
Getting laid off
Switching from full-time to part-time work
Reduced hours
Increase in medical expenses
Emergency home repairs
Unexpected childcare costs
Quitting your job or getting fired doesn’t count as a financial hardship, according to Earnest. If you become permanently disabled, Earnest fully discharges your student loan.
Top reasons to consider Earnest
From its extra-long grace period to its lack of late fees, here are a few perks of taking out a student loan from Earnest:
Nine-month grace period. Federal loans and most private student loan providers only offer a six-month grace period before full repayments kick in.
Skip one repayment a year. Earnest allows borrowers in good standing to skip a repayment after they’ve made at least six months of repayments.
No late fees. Most private student loan providers charge a fee when your payment is late. Earnest doesn’t.
Wide range of terms. Earnest offers one of the widest ranges of loan terms you can find with a private student loan provider.
Available to international students. As long as you have a cosigner, Social Security number and can meet other requirements, you don’t have to be a citizen or permanent resident to qualify.
Drawbacks to borrowing from Earnest
Consider these potential drawbacks before taking out a private student loan from Earnest:
Not available in 11 states. Earnest doesn’t offer student loans in 11 states. And both applicants and cosigners need to be residents of an eligible state to qualify.
Title IV schools only. Attending a school that doesn’t offer federal financial aid makes you ineligible for an Earnest student loan.
Restricted repayment options. Not all repayment plans are available to all borrowers, depending on where you live and whether you applied with a cosigner.
Compare more private student loan options
Updated February 26th, 2020
What to expect when signing up
You can apply for an Earnest student loan online. Check that you meet Earnest’s eligibility requirements before you get started. Once you’re sure you qualify, follow these steps to get started:
Go to the Earnest website.
Click Private Student Loans in the main navigation bar.
Click Let’s Get Started.
Follow the directions to complete the application with information about yourself, the school you’re attending and your cosigner, if applicable.
Read the disclosures before clicking Continue.
Once you submit the application, Earnest presents offers for different rates and terms you might qualify for. Select the offer you prefer and follow the directions to sign the loan documents.
Who services Earnest student loans?
You might have heard that Earnest was acquired by student loan servicer Navient in 2017. But the company still services its own student loans. That means you’ll apply for and repay your student loans through the same company. If you’re not happy with Earnest as a servicer, consider refinancing.
More about Earnest
Earnest is a direct online lender that specializes in student and personal loans. Rather than just relying on your credit score, this lender considers other factors like spending and savings habits, employment, levels of education and more.
You might be. Double-check to make sure your school is a Title IV nonprofit institution that offers four-year degree programs. If it is, reach out to Earnest to find out how to add it to the application.
You can skip a repayment by filling out a Skip-A-Payment request form, which you can download on Earnest’s website. To get approved, you have to meet a few requirements:
Your loan is in good standing
You made at least six months of on-time repayments
You submitted the request at least five days before your payment is due
Skipping a payment will extend your loan term, but will count toward your forbearance limit.
Not if you apply with a cosigner. However, your cosigner must have a credit score of 650 or higher.
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