CollegeFinance Score: ★★★★☆
For those who want flexibility in structuring and repaying their loans, Earnest is an excellent option. You can customize the terms of your loan and choose from a range of repayment approaches. Unfortunately, you won’t be able to see your rates without undergoing a hard credit inquiry.
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Cons:
Earnest, founded in 2013, built a flourishing student loan refinancing business, helping borrowers refinance over $4 billion in its first six years. In 2019, the company diversified its offerings, adding private student loans to its lending services.
Like many of today’s best private student lenders, Earnest takes pride in its distinctly modern approach to attracting and serving qualified borrowers. In contrast to long-established financial institutions, the company emphasizes innovation and personalization to provide an exceptional customer experience.
Thankfully, Earnest’s mission to bring the student loan industry into the 21st century isn’t just good branding. The company delivers plenty of useful perks for today’s college students, from an easy application process to several forms of wiggle room on repayment.
No lender can eliminate all the administrative headaches, but Earnest aims to minimize them with a genuinely fresh approach tailored to millennial and Gen Z borrowers. If you want a lender whose policies and practices feel current, Earnest’s vibe may be right up your alley.
Sure, Earnest may claim to be superior to more established institutions that offer student loans. But does the company deliver for current customers, providing a positive borrowing experience overall?
One important indicator of a business’s customer service and general trustworthiness is its rating with the Better Business Bureau (BBB). The BBB, a private nonprofit founded in 1912, compiles and assesses customer complaints about businesses, judging whether the complaints are justified and how businesses attempt to address them.
Good news for borrowers interested in Earnest: The company earned an A+ rating, the highest grade offered by the BBB. This grade reflects the fact that Earnest has relatively few customers complaints compared to other lenders and responds appropriately when one of their borrowers voices a concern.
Earnest also boasts a strong rating on review site Trustpilot, earning an average score of 4.7 out of 5 based on hundreds of customer reviews. Many of the customers mention how easy it was to complete Earnest’s application process, while others shout out the company’s polite and helpful customer service team.
Compared to other private student loan lenders, Earnest’s main advantages can be aptly expressed in a single word: flexibility. From setting the terms of your loan during the application process to skipping one payment per year, Earnest permits you to shape the repayment process to reflect your personal needs. Combine this approach with well-reviewed customer service and an easy application process, and Earnest certainly earns your serious consideration.
Even the best lenders have room for improvement, and Earnest is no exception. While the following points probably won’t be deal breakers for most borrowers, they are worth keeping in mind before choosing to apply.
Minimum loan amount: $1,000
Loan term options: Option to customize your preferred loan term up to 15 years
Multi-year approval available: Not disclosed
Fixed and variable rates available: Yes
Fixed low APR: 2.89%
Fixed high APR: 16.49%
Variable low APR: 4.99%
Variable high APR: 16.85%
In-school payment options: Choose from four in-school repayment options, including
Grace period: 9 months
Cosigner release available: No, although you may be able to refinance your loan with Earnest to remove your cosigner.
Loan servicer: Navient
Interest rate discounts: 0.25% autopay discount
Other rewards or services: Earnest’s “Skip a Payment” option allows you to do exactly that once every 12 months. However, you’ll have to request the company’s permission, and your loans must be in good standing at the time.
Income requirements: You or your cosigner must have an income of at least $35,000 per year.
Credit score requirements: You or your cosigner must have a credit score of at least 650, established credit history for at least three years, and no history of bankruptcy.
Eligibility for international borrowers: International borrowers require a cosigner who is a U.S. citizen or permanent resident.
Application or origination fees: None
Soft pull rate check availability: While you can check eligibility without hurting your credit score, Earnest does not currently offer real private student loan rates without a hard credit inquiry. This may confuse some prospective borrowers because Earnest does offer a “Rate Check” tool that involves a soft inquiry that won’t hurt your score. Unfortunately, this option is only available to those interested in Earnest’s student loan refinancing, rather than new private student loans.
Given Earnest’s considerable advantages, you may be seriously considering becoming a customer. But before you borrow from Earnest — or any other private lender — you should first exhaust another funding option: federal student loans.
As their name suggests, federal student loans are funded by the U.S. government. They are overseen by the Department of Education and administered in conjunction with colleges and universities as part of the nation’s broader federal financial aid system. Once borrowers leave school, their federal loans are “serviced” by outside companies that manage the repayment process.
Why should you go with federal loans before considering private options such as Earnest? First and foremost, federal student loans are far easier to access because they’re designed to help aspiring students afford school.
You won’t need a strong credit history or income, and there’s no cosigner required: The government isn’t looking for these indications of your ability to repay. Rather, you’ll need to get into the school of your choice and complete the Free Application for Federal Student Aid (FAFSA), sending it to your school. Generally, federal loan money is offered based on a student’s financial need rather than academic merit or economic stability.
However, no matter your financial circumstances, there are other great reasons first to explore your federal financial aid options. As a federal institution, the Department of Education can offer options and protections that private lenders can’t. Here are some of the distinct advantages of federal student loans:
With unique benefits such as these, federal loans should be the primary option for virtually every student loan borrower. But if federal loans don’t cover all of your school-related expenses, a private student loan can be an excellent supplement to the federal money you receive.
That’s where lenders like Earnest can truly deliver, empowering students to focus on their studies by funding their educational pursuits. Like tens of thousands of students every semester, if you find that your federal financial aid isn’t sufficient, a private student loan could be the perfect solution.
As we’ve explained, Earnest stands out for the unique array of options that it offers borrowers. Whereas many other lenders offer a limited selection of loans and rigid repayment terms, Earnest empowers its customers to personalize the borrowing process.
Maybe you love the idea of customizing your loan, setting the term and payment to match your financial goals. Perhaps you value Earnest’s accommodations in the event of financial challenges, such as the chance to skip a payment or a longer grace period should you struggle to find a job after school. Whatever you find attractive about Earnest, you’ll probably enjoy greater control than you would with your typical lender.
Even if Earnest sounds like a great fit, you deserve to evaluate other private student loan options. By comparing Earnest to other potential lenders, you’ll assess their relative advantages concerning your borrowing needs.
That’s where CollegeFinance.com can come to your aid, with comprehensive and unbiased reviews of private student loans. Whether you’re looking for expert opinions on a specific lender or researching the best private loan options overall, we’re here to help you make a sound decision about funding your education.
We can also help with other aspects of planning your studies and financial future, from smart tips for finding scholarships to guidance on repaying or refinancing your loans. For all topics related to affording your education and moving forward financially, you can count on CollegeFinance.com to deliver helpful advice.
Disclosures
Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 3.14% to 16.74% (2.89% – 16.49% with auto pay discount). Variable annual percentage rates (APR) range from 5.24% to 17.10% (4.99% – 16.85% with auto pay discount). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our .25% auto pay discount from a checking or savings account. Enrolling in autopay is not required as a condition for approval.
Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school.
Earnest clients may skip a payment through a one, one-month forbearance during a 12 month period. Your first request to skip a pay can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement.
You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
Earnest Private Student Loans are made by One American Bank, Member FDIC, or FinWise Bank, Member FDIC. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. Finwise Bank, 756 East Winchester, Suite 100, Murray, UT 84107.
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Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770) One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America.
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