Save time and money by refinancing your federal and private student loans with these online lenders.
With so many lenders advertising affordable refinancing, you can feel misled when the actual rates you’re offered don’t match up. By shopping around, you could find the best lender for you.
SoFi, CommonBond and Earnest are popular online lenders offering federal and private student loan consolidation to save you money when refinancing your student loans. See how they compare to learn which could be the right fit for your situation.
What makes SoFi, CommonBond and Earnest unique?
Online lenders SoFi, CommonBond and Earnest are direct competitors trying to win your business. But a closer look reveals few differences that could benefit the right borrower.
- SoFi includes a member community with access to perks outside of student loans, like group outings and career workshops to further your professional growth.
- CommonBond’s member program offers similar a community. But outside of lending, it has strong social mission to make education available in countries where the ability for all to study is scarce.
- Earnest is different in a way that’s specific to lending — something it calls Precision Pricing. It’s essentially an algorithm that takes into account a borrower’s saving habits, ability to make payments and potential for future higher earnings when determining rates and terms. The lender further customizes this rate based on your preferred monthly payment.
First, am I eligible to apply with SoFi, CommonBond or Earnest?
Each of these three lenders require you to be a US citizen, be least 18 years old and have at least $5,000 of student debt. Beyond that, SoFi and Earnest require the same eligibility, while CommonBond differs slightly.
To refinance with SoFi, must:
- Have good to excellent credit or a creditworthy cosigner.
- Hold an associate degree or higher.
- Be employed or have a job start date within 90 days of applying.
If you want to refinance with CommonBond, you’ll need to:
- Have good credit or a creditworthy cosigner.
- Hold a bachelor’s degree or higher.
With Earnest, you’ll need to:
- Have a credit score of 660 or higher.
- Hold an associate degree or higher.
- Be employed or in your last semester of school.
Which lender offers lower interest rates?
Out of the three online lenders, loans with SoFi come with the highest variable and fixed rates. Its variable rates start at 2.51%, with fixed rates starting at 3.899%.
CommonBond offers starting variable rates at 3.2% and fixed rates at 3.35%.
Unlike the other two lenders, CommonBond offers a hybrid loan, where the first five years of your loan are paid back at a fixed rate and the last five years are variable.
Variable rates for Earnest’s student loans start at 2.57%, with fixed rates starting at 3.49%. Variable-rate loans come with a lifetime cap of 8.95%, 9.95% or 11.95% APR depending on your loan terms and state regulations.
While all three lenders offer competitive rates, Earnest’s advertised rates are lower across more flexible options.
Which comes with fewer fees?
None of the three lenders charge origination or prepayments fees, meaning that it comes down to their potential late fees.
SoFi extends to its borrowers a 15-day grace period on late payments. Payments received after 15 days are subject to fees of $5 or 4% of the payment, whichever is less.
CommonBond gives you a 10-day grace period before charging late fees of $10 or 5% of your loan payment, whichever is less.
Earnest is unique in extending its no-fee policy into late payments. If you’re having trouble repaying your loan, Earnest will work with you to find a plan that can get you back on track. If you get too far behind in payments, however, it will report the status of your loan to the three main credit bureaus.
No late fees gives Earnest the clear upper hand over SoFi and CommonBond. But be wary of applying for refinancing if you intend to be late on payments; this could you mean you’re unable to afford the loan.
Malcom wants student loan refinancing from a competitive online lender, not his local bank
Malcolm is lucky enough to have gotten through his undergrad debt-free, but he ended up borrowing $40,000 to pay for his master’s degree in Spanish literature. He assumed he was stuck with his payments — that is, until he heard about a friend who saved a ton of dinero by refinancing.
Not wanting to deal with the hassle of his local bank, Malcolm compared variable-rate loans from online lenders SoFi, CommonBond and Earnest.
Here’s what he found by shopping around:
|Starting APR for variable-rate refinancing||2.51%||3.2%||2.57%|
|Fees||No origination or prepayment fees. Late payment fees apply.||No origination or prepayment fees. Late payment fees apply.||No origination or prepayment fees. No late payment fees.|
|How much can I borrow?||$5,000 to full balance of your qualified education loans||$5,000 to $500,000||$5,000 to the full balance of your qualified education loans|
Malcolm decides to go with CommonBond for its lower overall interest rates on a long-term loan, as he knew he wasn’t going to be in a position to make big payments on his loan any time soon. CommonBond also won him over with its social mission of helping underserved populations gain access to education.
How else are these three lenders different?
Each of these three online lenders offer discounts for autopay, but SoFi knocks off an extra 0.125% for repeat borrowers. Beyond that, borrowing from SoFi is like joining a club. Members can get access to career and financial advice, networking events and even special programs that offer startup funding for entrepreneurs.
While it’s the only one of the three options that lets you apply with or without a cosigner, it doesn’t offer cosigner release. It now offers refinancing to residents of all 50 states.
CommonBond’s community rivals that of SoFi, offering members mentorship, career resources and events. Most lenders will consider for deferment, considering the borrower’s financial and personal circumstances. But if you’re extended deferment with CommonBond, you could be approved for a period of up to 32 months — or more than 2.5 years to get back on track.
You’ll need a cosigner for all student loan approvals, but they come with an offer for cosigner release later in the loan — again, at the lender’s discretion. And if you live in Idaho, Louisiana, Mississippi, Nevada, South Dakota or Vermont, you’re out of luck completely.
Earnest could be appealing to a borrower who’s worried how their credit score could affect their application. This lender’s Precision Pricing offers a great deal of flexibility, with approvals based on far more than your credit score.
To help with interest, Earnest offers a biweekly payment option and allows you to switch between fixed and variable rates every six months, as long as you make on-time payments for at least six consecutive months. However, Earnest does not allow you to apply with a cosigner and is not available in Alaska, Delaware, Kentucky, Mississippi, Nevada or Rhode Island.
Which has a better reputation?
SoFi gets a high rating of 9.1 as of June 2018 based on nearly 1,730 reviews. Customers have said it’s transparent and that support is easily accessible by email, chat and social media seven days a week.
CommonBond isn’t rated on Trustpilot yet. But users in online forums complain about long approval waiting periods — if they got any communication at all. Its intuitive website offers a loan expert waiting to answer your questions via live chat.
Earnest only has seven reviews and scores a relatively meaning less 8.3 out of 10 as of June 2018. But online forums include users who seem to like the rates and terms they’ve gotten with this lender, as well as its flexible hybrid options. Some users report excellent customer service, while others say they’ve jumped through hoops only to be denied a loan.
Winners: SoFi and CommonBond
SoFi and CommonBond offer more than just funding — and many borrowers enjoy that personal touch.
How much can I borrow with each lender?
This online lender offers funding for loans amounts of $5,000 to as much as your existing student loans require. No limits.
CommonBond too starts its funding options at $5,000, but you’re limited to refinancing of up to $500,000.
Earnest’s limits reflects SoFi’s: Your student loan minimum is $5,000 with no maximum limits.
Winners: SoFi and Earnest
All three lenders start their funding at $5,000. But if you’ve taken on more than $500,000 in student loan debt, you’ll appreciate SoFi and Earnest’s offers to cover your full amount.
Which lender can get me money faster?
All three lenders can disburse money quickly, processing preapproved applicants and then moving forward at the borrower’s discretion. Turnaround depends on how quickly you’re able to get together the documents and information required to fully process your application.
With all of your documents in order, SoFi typically disburses your money within seven to 10 days.
Once approved, CommonBond typically disburses money to your lender 10 days after your documents are complete.
Earnest typically disburses money within 10 days if you’ve completed the necessary paperwork correctly.
SoFi takes a slight edge with the possibility of disbursement three days sooner than the others.
SoFi, CommonBond and Earnest are popular among users for good reason: They each offer competitive rates, fast turnaround and perks beyond what you’ll find at your local bank. Which is best really boils down to your specific circumstances and creditworthiness.
Want to learn more about your student loan options? Check out our student loans guide to compare lenders and learn how it all works.
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