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SoFi vs. Earnest Student Loan Refinance Comparison

SoFi is the biggest name in student loan refinancing for a good reason, but Earnest may be the best choice for many borrowers.

Written By: Michael P. Lux, Esq.

Last Updated:

Affiliate Disclosure and Integrity Pledge

Two of the top lenders in student loan refinancing are SoFi and Earnest.

Not surprisingly, the two companies have a lot in common. Both lenders offer excellent rates, but there are reasons some borrowers may want to steer clear of both options.

SoFi and Earnest Basics

SoFiEarnest
Variable-Rate Loans6.24% – 9.99%5.89% – 9.74%^
Fixed-Rate Loans5.24% – 9.99%4.99% – 9.74%^
Loan Terms5, 7, 10, 15, and 20 Years5 – 20 Years
Minimum Loan$5,000$5,000
Signup BonusNA$150^

^ The lowest listed rate for Earnest is a 5-year variable rate loan, and rates for both lenders are listed as an APR. Please see the Earnest Disclosure for more details on rates and bonus terms.

On the surface, these two lenders look nearly identical. However, by digging a little deeper, some critical distinctions emerge.

Key Differences

Perhaps the most significant difference between the two companies is the application criteria for getting approved. As we noted in our review of SoFi, the credit score and income requirements are pretty high. In contrast, Earnest places less value on these two financial indicators. The Earnest approach looks at more financial records to better understand your responsibility with money and ability to pay. That is why they ask to connect your bank accounts and investment accounts (if you have them).

The downside to the Earnest approach is that they may require more records before your loan reaches final approval. Depending upon your circumstances, this could be a good thing or a bad thing.

A Red Flag for Each Lender

Both lenders have solid reputations.

However, each lender also has a skeleton in their closet that may upset potential borrowers.

When Earnest first entered the refinance market, it was a tech-based startup. They set out to be better than the rest by offering excellent rates and flexible terms. Several years ago, Earnest was purchased by Navient, a company disliked by many student loan borrowers. As noted in the comprehensive review of Earnest, this purchase was finalized many years ago, and it doesn’t seem to have changed Earnest. However, whether or not this is a problem is up to each individual borrower.

Similarly, SoFi is a tech-driven lender with consumer-friendly focus. As SoFi has grown, it has remained independent, and largely remained borrower-friendly. However, in the spring of 2023, SoFi made the decision to file a lawsuit to end the federal student loan payment and interest pause. As a result of this decision, some borrowers may choose not to work with SoFi.

The Sherpa Perspective: Nearly every major lender in the student loan refinance space is a for-profit company. As such, each lender has made some decisions that will likely upset some borrowers.

If I was refinancing my loans today, I’d pick the lender the offers the lowest rate and use them to save as much money as I could. The second another lender offers a lower rate, I’d refinance again. Lenders ultimately make decisions in their best business interests. As a consumer, I tend to do the same.

Important Similarities Between SoFi and Earnest

Now that we know the reasons borrowers might want to avoid these two lenders, it is important first to explain why they both rank highly on the student loan refinance lender rankings.

In addition to the low-interest rates, both companies offer similar terms that most borrowers should expect. For starters, neither company charges any origination fee. Along the same line, neither company charges any prepayment fee. Most telling is that contracts with both lenders have provisions for loan discharge in the event of disability or death. This is a term that not all lenders include but one that borrowers should demand.

The SoFi Advantage

The thing that separates SoFi from Earnest, and all other lenders, is their job placement program. When you apply for student loan refinancing, it usually means you are in a pretty good financial situation. Otherwise, you would have little chance of approval.

Few people consider the possibility of losing their job during this time.

Most lenders are willing to provide a short deferment or forbearance, but SoFi has employees who will help you find a new job or a better job. They bet that they will spend less money helping people find a job than what they would spend trying to collect the debt for people who fall behind. Nobody plans on losing their job, but if you do, you will likely be glad you opted to get your loan through SoFi. This program is part of the reason that SoFi checks in toward the top of our student loan rankings.

Another aspect of SoFi that borrowers should like is their transparency. Due to the federal interest rate freeze during the Covid-19 pandemic, borrowers with federal loans were much better off choosing not to refinance. This site evaluated how each lender did advising borrowers to make a smart decision. SoFi had the best guidance.

Reasons to Pick Earnest

Two big factors could make Earnest a better option for borrowers.

The first Earnest edge is the deeper dive they take into an applicant’s finances. Borrowers who keep an emergency fund and save for retirement may help their application with Earnest. Most other lenders ignore these signs of creditworthiness.

Secondly, Earnest allows borrowers to get very flexible with their repayment length. Most lenders force borrowers to pick between a 5, 7, 10, 15, or 20-year loan. At Earnest, a borrower can select a customized repayment length between 5 and 20 years.

Finally, Earnest also offers $150 to new borrowers who refinance their loans.

Sherpa Thoughts on Comparing SoFi vs. Earnest

I’ve been watching and reviewing student loan refi companies for the past decade.

Based on what I have seen during that time, I’d give SoFi a very slight edge. Generally speaking, borrowers who apply with SoFi have slightly better odds at getting approval, but there are undoubtedly many cases where Earnest comes out ahead.

These two lenders are structured very similarly as they are both categorized as “fin-tech” companies. For borrowers, this means the rate they offer will depend upon investor interest in student loan refinancing. At times Earnest will have more available capital and be more likely to approve a borrower. Other times, SoFi will have more funding available and be more aggressive about getting new customers.

Anyone looking to find the best student loan refinance rate should certainly consider both SoFi and Earnest.

Other Lenders to Consider

Splash FinancialSplash is extremely focused on interest rates. They consistently have the lowest rates in numerous loan categories. Read more...
ELFIELFI is a traditional bank with a major focus on quality customer service. Getting approved is hard for some borrowers, but those that do get approved receive excellent interest rates. Read more...
LendKeyLendKey partners with smaller banks and credit unions across the country. This approach results in higher approval numbers and competitive loan terms. Read more...
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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