Earnest Student Loan Consolidation and Refinance Review

Michael Lux Blog, Consolidation, Student Loan Consolidation Reviews, Student Loans 8 Comments

Earnest Student Loan Consolidation

Interest Rates
Co-Signer Release
Loan Terms
Repayment Length


Earnest looks at your financial different than other lenders. Instead of just credit score and income, they look at other factors that show financial responsibility.

Article Updated on 7/3/19 to include the latest interest rate information.

The growing numbers of student loan consolidation companies makes it difficult to keep up with everyone in the market.  As more companies enter the fray, it becomes even harder to find what makes one lender different from the next.  One company bucking the student loan consolidation and refinancing trend is Earnest.

The Earnest sales pitch is that you will get better results with them because they are better at making lending decisions.  Where some lenders look only to FICO and year income, Earnest takes a look at the big picture.  This big picture approach makes looking into Earnest a wise decision for many refinance shoppers.  As a result, Earnest currently gets the 8th spot in our student loan refinance company rankings.

Meet Earnest Basics

Like most lenders, Earnest offers both fixed-rate and variable-rate consolidation loans.  Presently, Earnest has very competitive rates with their variable-rate loans starting at 2.41% and their faxed-rate loans starting at 3.36%.  One thing that makes Earnest a little different is that they offer more than the traditional 5, 10, 15 and 20 year loans.  Borrowers are able to choose repayment lengths that fall anywhere on the 5 to 20 year spectrum, meaning if 18 years is ideal for you, you get 18 years to repay your loan.

Earnest calls this feature “precision pricing”.  This sliding scale may not appeal to everyone, but it has two main advantages.  For long-term planners with specific deadlines, such as retiring in 12 years, or buying a home in seven, precision pricing could be ideal.  It also works nicely for the people who know exactly how much they have in their monthly budget.  If you can spare exactly $327.42 per month, you can get a plan that fits your specific need.

Like other legitimate lenders out there, Earnest doesn’t charge any pre-payment penalties or loan origination fees.  Paying back your loan is just paying back principal and interest.

Navient Purchase of Earnest

When this article was first published, Earnest was a student loan startup out to make a name with their flexible repayment options.

As time went by Earnest grew and was ultimately purchased by Navient, a massive student loan company with a questionable reputation.

Unsurprisingly, the $155 million purchase of Earnest has led to some changes.  Some Earnest customers now complain of things be less consumer friendly and less transparent.

Those looking to refinance their student loans in order to get away from Sallie Mae/Navient should look to other lenders offering refinancing and consolidation services.

Earnest Advantages

One thing that we love about Earnest is that they service all of their own loans.  Many consolidation companies will refinance your debt, but then sell the consolidated loan to another company.  The quality of the new service you get can be a mystery.  Earnest keeps repayment in-house.  It doesn’t guarantee better service, but it is definitely better than the alternative.

The biggest advantage with Earnest, and the reason many people may chose to work with them, is their “big picture” approach to lending decisions.  The believe that by looking at more financial information, they can make a smarter decision when it comes to application approvals.  We reached out to Earnest to get an example of someone who could benefit from their method, and they provided the following response:

“We have a client who is a librarian with a Masters in English Literature. She makes a public librarian’s salary and is incredibly financially responsible — she pays her bills in full and on time and saves a substantial amount of money in both investment and non-investment accounts. But she also doesn’t have a great credit score — it’s not bad, but not great — because she simply doesn’t use traditional credit cards and credit products. That’s someone who could be instantly denied by a lot of traditional lenders (as well as Earnest competitors), but when we look at that profile, we see someone who is tremendously responsible with her money and deserves our best rates. We think our approach unlocks access to credit for a lot of people who truly deserve it.”

A couple of things stand out from this example: a less than perfect credit because of a limited history, and building a retirement account.  If you are someone who is very careful with their money, i.e. saving more than you spend and putting money aside for retirement, Earnest is definitely worth exploring.

Cause for Concern…

Earnest advertises a 2 min application for a credit approval, but practically speaking, we do have some concerns about this process.  The big advantage of Earnest, the big picture approach, could also become a big issue during the application and loan consolidation process.  Because Earnest examines more financial information, it means that Earnest will need access to more financial information.  It means more records to verify, and paperwork to put into place.

Ultimately, if sending in a little bit of extra information lowers your interest rate, it is time well spent, but it does increase the odds of headaches along the way.

Finally, Earnest provides consolidation services for federal student loans.  While this can be a smart financial move for some, for others it is a huge mistake.  Before you consolidate, make sure you know whether or not student loan consolidation is for you.

The Bottom Line

Earnest is probably the ideal option for people who are responsible with their money, but might not have a huge income or a perfect credit score.  If you think your credit score or yearly income don’t tell the full story, Earnest could be the ideal option.

Given that Earnest has loans with rates starting below 3% and a unique approach, they immediately get a spot in the top ten of our student loan consolidation rankings.  As we get feedback from borrowers about their experience (especially when it comes to the paperwork necessary to make the loan happen), we will adjust their rank accordingly.

To check out the rate you qualify for with Earnest, apply here.