Earnest private student loans review

How much do Earnest private student loans cost?

Earnest offers both fixed and variable rates. Fixed rates start at 3% APR with autopay, while variable rates currently start at 1.04% APR — also including the 0.25% autopay discount. To get and keep that discount, you have to enroll in autopay and keep it active through the life of your loan. You also can’t combine it with other discounts through loan repayment programs.

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.

Earnest doesn’t charge any fees to apply, nor does it have any late payment or prepayment penalties. Its terms run from five to 20 years, and you can borrow up to the cost of attendance. Use the calculator below to see how much an Earnest student loan might cost you each month — if you start making full repayments right away.

How it works

The rate and term you qualify for depends on factors like you or your cosigner’s credit score and income, while your loan amount depends on your school’s cost of attendance.

If you choose to defer or make partial repayments on your loan, you can expect a higher monthly cost than the calculator above shows.

Does Earnest offer any discounts?

Yes, you can qualify for a 0.25% rate discount when you sign up for automatic repayments. You can’t combine the discount with others you may receive from repayment plans. And if you have a multiparty loan, only one party can enroll in autopay.

What do I need to qualify?

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.

Requirements for students applying with a cosigner

• Enrolled full-time at a Title IV nonprofit four-year institution
• Studying for a bachelor’s or graduate degree
• Resident of Washington, DC or any state except Nevada
• Social Security number
• Age of majority in state of residence

Requirements for cosigners

• 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 Washington, DC or any state except Nevada
• Age of majority in state of residence
• US citizen or permanent resident

Earnest also 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.

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. You can find lenders that offer them by reading our guide to parent loans.

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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
• Available to all borrowers

• Highest long-term cost

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.

Fixed repayments

• Available to all borrowers
• Reduces long-term cost

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

• Reduces long-term cost

• 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

• Lowest long-term cost

• Highest immediate 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:

• No cosigner release. The only way you can take your cosigner off your loan is by applying for student loan refinancing.
• Not available in Nevada. Earnest doesn’t offer student loans in Nevada. 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.

Is Earnest legit?

Yes, Earnest is a legitimate private student loan provider. You can easily access its lending licenses on its website. And it take steps to protect the information you enter online, like using SSL encryption. It also doesn’t sell your information to third parties — though it may share it with partners for business use.

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:

1. Go to the Earnest website.
2. Click Private student loans in the main navigation bar.
3. Click Let’s get started.
4. Follow the directions to complete the application with information about yourself, the school you’re attending and your cosigner, if applicable.
5. 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.

More about Earnest

Earnest is a direct online lender that specializes in student 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.

It just started offering private student loans in 2019, and previously provided personal loans. You can also refinance student loans through Earnest.

Read our guide to student loans to weigh your options and see how Earnest compares to the competition.

Frequently asked questions

• My school isn't listed on the application. Am I still eligible?

  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.

• How do I skip a repayment?

  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.

• Do I need to have a credit score to apply for an Earnest student loan?

  Not if you apply with a cosigner. However, your cosigner must have a credit score of 650 or higher.