Earnest Review

Wednesday, June 7th

2023 Student Loan Provider Reviews

Earnest

• Undergraduate and graduate loans available in all states but Nevada
• Must be enrolled full-time for college freshman, sophomores, juniors and at least half-time for seniors
• 9-month deferral period available after graduation plus Skip-a-Payment once a year
• 4 repayment plan types
• No origination fees, late fees, or prepayment penalties
• Minimum loan of $1,000, up to 100% of your cost of attendance for the academic year
• Loans available: undergraduate, graduate, medical/business school, cosigned, parent
• Competitive loan interest rates, which includes a 0.25% discount for making automatic payments
• Both fixed- and variable-rate loans available
• "A" rated and accredited by the BBB

More than 125,000 people have used Earnest to borrow funds for education or for personal reasons. The company aims "to make higher education accessible and affordable for everyone" , with lower-than-average interest rates and a helpful "Client Happiness" customer service team.

Most students need to be enrolled full-time

What are the eligibility requirements to get a student loan through Earnest? If you're a college freshman, sophomore or junior, you have to be enrolled full-time at a Title-IV qualified, not-for-profit four-year institution (no associate's degree programs). The enrollment requirement drops to "at least half-time" if you're a college senior. You have to borrow at least $1,000, and either you or your cosigner (if you have one) must have a FICO score of 650+ and at least three years of credit history, among other financial criteria. Finally, Earnest student loans are available in Washington DC and in all states but Nevada.

Needs to be more direct

We wish that Earnest were more forthcoming with specifics about their student loans. For example, looking in the FAQ for more details about their interest rates, all you'll see is a generic "we try to be competitive" non-answer. The same goes for the question of how much applicants can borrow when using Earnest: a lengthy description of how much can be gotten through federal loans and then another "generally speaking" about all private student loans. Why not just come out and say it - or at least give a ballpark - without making prospective clients click on the "Apply Now" button? On the undergraduate student loans page, even the "Today's Rates" section only gave a "starting at" rate, that's it.

Look around to see current rates

It was only on the "Cosigned or Independent?" page of that application process that we found their complete rates: they advertise different ranges for both cosigned loans (which are lower), and independent student loans. All of those rates include a 0.25% discount that assumes you'll make your payments automatically. We also dug around in the Earnest Help Center and eventually found out that their loans have a minimum of $1,000 borrowed and go up to 100% of your cost of attendance for the school year.

No actual rates without hard credit pull

But, here's where we got really aggravated: throughout the process, Earnest reassures you that your credit score won't be affected by checking your rates. Great! But there's no point during the application that lets you see any possible loans: once you enter the amount you want to borrow, the last page asks for your phone number, your social security number, and then consent to a hard credit inquiry. Um, what? That's a serious disadvantage compared with many of Earnest's rivals, who more often than not will tell you what loan rates and terms you prequalify for, and who only use a soft credit pull to do so.

Some unique benefits here

However, there are still some upsides to Earnest that stop us from kicking this lender to the curb, so to speak. While many student loan providers only offer a 6-month grace period after graduation where no repayments are required, Earnest gives you 50% more (nine months). Also, once you've made six consecutive, on-time payments, you're eligible for their once-a-year Skip-a-Payment option. So, if you've had a costly car repair or there's a slowdown in your income, you've got some breathing room here.

Surprisingly positive reputation

Beyond that, borrower feedback tends to be much more positive than we expected. There were nearly 4,000 Earnest clients who gave them a perfect five-star rating, saying that on both loans and loan refinancing they were able to get extremely low interest rates. Almost every review said that the experience was seamless, and many students have used Earnest from one year to the next to get their educational expenses covered. The BBB concurs, giving this lender an "A" rating and accreditation.

Room for improvement but not bad overall

Out of all of the student loan providers we evaluated, Earnest left us feeling the most conflicted. Clients tend to love them, and if you qualify for a low interest rate you could save thousands of dollars over the life of your loan(s). But, you have to get there first - and Earnest makes that much harder to do without having a hard inquiry on your credit report. With more transparency prior to the formal loan application process, Earnest could easily jump in our rankings. Until or unless that happens, Earnest gets a "maybe, maybe not" ranking here.