The Good

• Approval of borrowers with limited credit history
• Competitive interest rates
• Flexible repayment options
• No origination fees

Earnest strives to be the preferred lender for borrowers who have limited credit history, meaning, they haven’t had credit cards and loans before.  Earnest utilizes over 1,000 data points in determining whether or not to make a loan, including employment history, savings trend over time, frequency of overdraft or late charges, and absence of any recent bankruptcies or collections.

To refinance your student loans with Earnest, you need to be at least 18 years old and a US resident

Earnest also has made it very easy to adjust payments when there is a hardship or some other issue that prevents borrowers from paying on the intended schedule:

• Deferment – Postpone your loan payments for up to 36 months if you return to grad school. Note, interest does still accrue during deferment.
• Forbearance – Postpone in three-month increments, up to four times, if you have a decrease in in income (such as a reduction in hours or changing from full-time to part-time employment), an involuntary loss of employment through no fault of your own, or an increase in “essential” costs which means medical expenses, child care, or major home repairs.
• Skip a payment – Borrowers are eligible to skip one month’s worth of payments every twelve months. The skipped payment is then distributed out across future loan payments, so your monthly payment will increase slightly.  Skipped payments also count as a forbearance, and you only get four (see above)
• Extend a payment date by seven days – Borrowers can pay an individual payment seven days later by doing it manually or pushing out the autopay date through the online Earnest portal

Earnest operates in 45 states and currently does not service customers in Nevada, South Dakota, Kentucky, Alabama, or Mississippi.  At the time of this writing, they do not charge any origination fees on their student loan refinancing.

The Bad

• Cannot refinance Sallie Mae loans
• No co-signer allowed

Earnest has a couple of quirks that will be negative for some borrowers.  First, if you have a loan currently serviced by Sallie Mae, Earnest cannot refinance it.  Sallie Mae is one of the largest providers of student loans in the U.S., so this is not an insignificant fact.  But Earnest was acquired by Navient in 2017 as an independent subsidiary, and apparently, Navient has an agreement with Sallie Mae Bank that prohibits them from refinancing those loans until 12/31/18.

Second, Earnest does not allow for a co-signer.  This is somewhat unusual as far as student loan refinancing goes, but they’ve set up their underwriting to be able to qualify borrowers without a co-signer.  So for many applicants who want to establish their own credit history independently, or who don’t have a co-signer, or who have parents with negative credit, this won’t matter.

Our Summary

Earnest is a very good option for new borrowers with limited credit history who might be denied elsewhere.  Earnest is specifically set up for these types of borrowers to be approved.  It is also an excellent option for borrowers who anticipate possible issues with paying the loans back on time, as Earnest is particularly flexible in their forbearance options.