After you’ve graduated and have built up your credit, you may be considering refinancing your old student loans at a lower rate. And with so many lenders advertising affordable refinancing, you might feel misled when the actual rates you’re offered don’t match up.
That’s why shopping around is important. SoFi, CommonBond and Earnest are popular online lenders that offer federal and private student loan consolidation. You may be able to get the low advertised rates and save money by refinancing your student loans with one of these trusted lenders.
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.
SoFiincludes 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 a similar community. But outside of lending, it has strong social mission to make education available in countries where the ability to study is scarce.
Earnestuses a system 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. Then the rate is further customized based on your preferred monthly payment.
Am I eligible to apply with SoFi, CommonBond or Earnest?
Each of these three lenders require you to be a US citizen, at least 18 years old and have at least $5,000 of student debt. Beyond these basic points, SoFi and Earnest require borrowers to meet almost the same eligibility criteria. 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 need to:
Have good credit or a creditworthy cosigner.
Hold a bachelor’s degree or higher.
With Earnest, you need to:
Have a credit score of 650 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 1.74%, and fixed rates go from 2.49% to 6.94%.
CommonBond offers starting variable rates at 3.74% 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 1.74%, with fixed rates of 2.44% to 5.79% APR with autopay. 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 and have more flexible options.
Which comes with fewer fees?
None of the three lenders charge origination or prepayments fees, meaning that this comparison 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 think you may be late on payments; this could you mean you’re unable to afford the loan.
Case study: 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 money by refinancing.
Not wanting to deal with the hassle of his local bank, Malcolm compared variable-rate loans from SoFi, CommonBond and Earnest.
Here’s what he found by shopping around:
Starting APR for variable-rate refinancing
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. It also won him over with its social mission of helping underserved populations gain access to education.
Which is most cosigner-friendly?
SoFi allows you to apply with a cosigner to help you get for a lower rate, though you have to prequalify on your own.
It also doesn’t offer cosigner release, so you have to refinance again if you want to take your cosigner off your loan.
Unlike SoFi CommonBond also allows you to bring on a cosigner to help you meet eligibility requirements and qualify for more favorable rates and terms.
You can apply for cosigner release after making two years of on-time loan repayments.
Earnest currently doesn’t allow applicants to apply with a cosigner.
CommonBond is the only lender of the three that allows cosigners and offers cosigner release.
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 allow deferment based on 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.
CommonBond is not available to residents of Idaho, Louisiana, Mississippi, Nevada, South Dakota or Vermont.
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 Delaware, Kentucky or Nevada.
Which has a better reputation?
SoFi gets a high rating of 9.5 as of December 2018 based on nearly 2,000 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 as of December 2018. 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 9.5 out of 10 based on over 400 reviews as of December 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 lending limits match CommonBond’s: You can refinance between $5,000 and $500,000.
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 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 7 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. The best option 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.
See how other top student loan providers compare
SoFi vs. Earnest
SoFi vs. CommonBond
Frequently asked questions
You might. Unless you have a healthy credit history, some lenders will require a cosigner for your loan. Earnest doesn’t allow borrowers to refinance with a cosigner, however.
Once your loan is approved, your new lender pays off the old student loan and issues you a new loan with new terms. You are then be responsible for paying off the new loan with the new lender.
Yes, but you can only refinance a federal student loan through a private lender. Doing so could result in losing the benefits that come with all federal loans, including longer deferment periods and income-based repayment plans. Weigh your options carefully before signing any contract.
Kyle Morgan is a writer and editor for Finder who has worked for the USA Today network and Relix magazine, among other publications. He can be found writing about everything from the latest car loan stats to tips on saving money when traveling overseas. He lives in Asbury Park, where he loves exploring new places and sipping on hoppy beer. Oh, and he doesn't discriminate against buffalo wings — grilled or fried are just fine.
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