When comparing Earnest vs. CommonBond, most borrowers will find that these refinance companies have far more similarities than differences.
However, a couple of factors could make choosing between these two companies an easy decision.
Earnest vs. CommonBond: Interest Rates, Repayment Options, and the Basics
In the world of student loan refinancing, there are two main types of lenders: the “tech” companies and the traditional banks.
Earnest and CommonBond both fall into the “tech” company category. Borrowers should expect easy to navigate websites, simple applications, and a mostly automated process.
Interest rates with the two lenders tend to be very close. At the time of this article, both lenders had identical rates for fixed-rate loans, and the Earnest rate was slightly better for variable-rate loans. The best current rates on the refinance marketplace can be found here.
Both lenders offer repayment terms ranging from 5 to 20 years. Earnest allows borrowers to pick the length of their choice, while CommonBond sticks with the traditional 5, 7, 10, 15, and 20-year options.
Finally, as noted in the CommonBond review, CommonBond has a program called CommonBridge. CommonBridge helps borrowers who lost their job find employment. This is a program that borrowers may never need, but it could be a great resource in a difficult time.
One Big Difference: The Earnest Deep Dive on Finances
One aspect that makes Earnest different from CommonBond and nearly all other refinance lenders is how they review applications.
Most lenders simply look at an applicant’s credit report and income when making lending decisions. Earnest takes a deeper dive.
Some borrowers will find this process to be too invasive for their liking. However, borrowers may get a much better rate after an Earnest review than they would with another lender.
I reached out to Earnest to ask about this financial deep dive. The example they provided was that a borrower who is responsible but has a shorter credit history could benefit.
Reader feedback on the Earnest application seems split. Some find it to be easy and a great way to qualify for excellent rates. Others find it to be too invasive and prefer to take their business elsewhere. This discussion on Reddit provides a nice example of the range of borrower opinions on the Earnest application process.
Another Big Difference: Navient Ownership
Earnest and CommonBond both have pretty good reputations within the student loan world.
However, Earnest is owned by Navient, a company with a poor reputation. CommonBond does not have a large corporate owner.
It has been nearly three years since Navient first acquired Earnest. During that time, Earnest doesn’t appear to have changed under the new ownership. Earnest rates and service quality have remained the same.
Borrowers looking to get away from Navient will probably want to avoid Earnest. Most others will find that the ownership structure doesn’t make a huge difference.
Earnest vs. CommonBond: The Little Details
There are a few other tiny differences between these to lenders that may impact borrower decisions.
Credit Checks – When checking an applicant’s credit history, CommonBond uses TransUnion while Earnest uses Experian.
Associate’s Degrees – Earnest will refinance debt for borrowers with an Associate’s degree. CommonBond requires a Bachelor’s degree.
Parent PLUS Refinancing – Unlike CommonBond, Earnest does not require any degree for refinancing Parent PLUS loans.
Choosing Between Earnest and CommonBond
Where there are a few distinctions between these two lenders, the vast majority of borrowers should opt for the one offering a better interest rate.
Important Note Regarding Rate Shopping:Borrowers are encouraged to check refinance rates with at least 3-5 different companies. These applications generally take 5 to 10 minutes, and there is no impact on the borrower’s credit score as long as the shopping takes place within a 30-day window.
Both companies are worth a visit when shopping for the best refinance rates.