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Earnest vs. Citizens Bank Student Loan Refinance Comparison

Citizens Bank and Earnest are both heavy hitters in the student loan refinance business, but Earnest is slightly better.

Written By: Michael P. Lux, Esq.

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Two of the largest refinance lenders are Citizens Bank and Earnest. Neither lender earns a spot in the top five of our lender rankings, but both have solid reputations for helping borrowers.

Even though these lenders both offer low interest rates, there are major differences between the two companies. From the source of funding to the approval process, Citizens Bank and Earnest use very different strategies.

The borrowers that identify and understand these differences will find the best refinance deal.

Citizens Bank vs. Earnest: Refinance Basics

citizens bankEarnest
Interest Rates7.02% - 12.43%5.89% - 9.74%^
Loan Terms5, 7, 10, 15, and 20 Years5 - 20 Years
Minimum Loan$10,000$5,000
Signup Bonus$200$150^

Both lenders offer solid interest rates, with Earnest usually offering slightly lower rates to the best-qualified borrowers.

One of the first significant differences is the repayment length options. Citizens offers the more traditional 5, 7, 10, 15, and 20-year repayment plans. Earnest borrowers can pick any length between 5 and 20 years. If a borrower wanted to repay their loan in precisely 6 years and 7 months, Earnest would create that loan. The benefit of that level of specificity isn’t apparent, but for borrowers who want a specific loan length, Earnest is the only lender offering this feature.

From a terms and conditions standpoint, the lenders are pretty similar. Like most legitimate lenders, there are no prepayment, origination, or application fees with Citizens Bank or Earnest.

Both lenders also refinance federal loans into private loans. Refinancing a federal loan into a private loan is risky because borrowers lose federal perks and protections. However, all refinance lenders provide federal consolidation, so it is hard to fault Citizens or Earnest. Nonetheless, borrowers with federal loans should carefully consider their options before refinancing their loans with any private lender.

A Note About Earnest Ownership Several years ago Earnest was purchased by Naivent. Given Navient’s lousy reputation among student loan borrowers, there was concern that Earnest’s quality would drop.

Fortunately, there hasn’t been a noticeable difference in borrower feedback since this purchase. However, borrowers that wish to distance themselves from Navient may also want to avoid Earnest.

Citizens Bank Advantages

Citizens Bank is one of the few remaining traditional banks offering student loan refinancing. Most of the larger lenders: SoFi, CommonBond, and Earnest, are considered fin-tech companies.

The fin-tech lenders depend on investor interest in student loans to fund loans. If investor interest drops, these lenders have to raise rates. A bank like Citizens can fund their own loans. Borrowers out to find the lowest possible refinance rate should check rates with bank-based and fin-tech lenders to secure the best deal.

Another big advantage to Citizens is that they will refinance loans for borrowers without a degree. Most of the other student loan refinance companies require applicants to have a degree.

Earnest Advantages

The one aspect that separates Earnest from all other refinance lenders is their application process.

Typically, lenders care about two numbers when making credit decisions: monthly debt-to-income ratio and credit score. Earnest looks at the bigger financial picture of applicants. For example, a borrower who sets aside money each month in a retirement account or savings account may fair better with Earnest.

In the past, the additional information that Earnest required meant completing the application took longer. Today, getting approved with Earnest takes about 10 minutes, which is comparable to most other lenders.

Finally, Earnest offers a $150 Bonus to new customers who apply through this link. Full terms and conditions on the bonus program are available here.

Deciding Between Earnest and Citizens

Most borrowers looking to refinance should consider both Earnest and Citizens Bank.

Borrowers without a degree will find Citizens is one of the few lenders willing to refinance. Borrowers who need a very specific repayment length should focus on Earnest.

Ultimately, most borrowers will benefit from checking rates with both lenders. Earnest and Citizens use very different criteria for determining approval and interest rates. One borrower may get an excellent rate from Earnest while another might find a far better deal with Citizens. The exact lender formulas are closely guarded secrets, so borrowers looking for the lowest possible rate must shop around.

Click here to check rates with Citizens Bank.

Click here to check rates with Earnest.

About the Author

Student loan expert Michael Lux is a licensed attorney and the founder of The Student Loan Sherpa. He has helped borrowers navigate life with student debt since 2013.

Insight from Michael has been featured in US News & World Report, Forbes, The Wall Street Journal, and numerous other online and print publications.

Michael is available for speaking engagements and to respond to press inquiries.

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