Earnest Review

Earnest is an online lender based in San Francisco. Earnest collects and analyzes hundreds of data points about each potential borrower, using that data as a better way to make lending decisions than a simple credit score, although that is a factor. This allows them to offer low interest rates to responsible individuals.

The company was founded in 2013, and expanded into student loan lending in 2019, including private student loans and student loan refinancing.

How Earnest stacks up

  • No fees
  • Accepts those who are young and new to credit
  • Flexible payments and schedules
  • Requires good credit
  • Requires a scan of your checking account
  • No ATMs or branches
  • Requires hard credit check


What’s interesting about Earnest

Earnest bank offers some of the lowest interest rates around for online lenders. It also does not charge late fees or origination fees as many other online lenders do; and it also offers unique repayment options for its new student loan programs, including being able to skip one payment a year.

The reason this lender can offer such low rates is it factors in not only credit score, but the financial health of the applicant revealed by the accounts they connect. Earnest likes borrowers who make payments on time for products like student loans and credit cards, spend less than they earn and have a decent amount of money in savings.

Things to consider

The drawback to Earnest loans of all types is that if you have high consumer debt, don’t have savings or have a poor credit rating, you probably won’t qualify for a loan. There really aren’t any poor credit options, although Earnest does work with those who are new to credit as long as they meet the income requirement and have some money stashed away in savings

How can the bank tell? The application process includes a scan of your checking account or even more than one account. So if you have privacy concerns, just know that without that scan, you can’t get a loan. There are also no options for joint applications. If you and your spouse want a loan, you’ll have to pick whose name will be on it.

Personal loans

Earnest has some great personal loans with some great rates, as long as you are a well-qualified buyer. There are also no origination or late fees; because they lend only to the best borrowers, Earnest doesn’t need to rely on those fees and interest to cover costs.

There are restrictions on what you can use the loan for. Personal loans cannot be used to pay tuition, fund a startup or an existing business, buy real estate or invest in it. It can be used for home improvements, debt consolidation and other large expenses and purchases.

To qualify, you will need a minimum credit score of 680, proof of regular income like direct deposits or frequent deposits from the same source, on-time payment history with some kind of credit, no bankruptcies in three years and no open collections accounts. There are a few states where you cannot get Earnest loans, including Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

Student loans

Earnest started offering student loans in 2019. What sets this lender apart in education financing is some unique repayment options and terms and some lower interest rates than other lenders. For a fixed-rate student loan, Earnest offers a rate as low as 4.69% and 3.35% for variable rates. Both of these options are eligible for a 0.25% discount if the lender signs up for autopay.

Like its personal loans, student loans aren’t offered in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

If you have a cosigner, you can stretch your payments out to 15 years, but if you are a solo borrower, the longest term available is 7 years. These loans are really designed for those who want to pay off loans quickly after graduation. There is a grace period of nine months — this is longer than most, but some private lenders offer grace periods over a year long. Actual interest rates vary and will depend on you and your cosigners credit rating and history, but they are competitive. One disadvantage with Earnest is that to determine your rate and payment options, the lender performs a hard credit check while many other lenders can check your rates and eligibility without one.

Student loan refinancing

Things are different for student loan refinancing, but again, Earnest is competitive. However, there are restrictions such as no cosigning options. However, terms are between five and 20 years, and you can borrow anywhere from $5,000 to $50,000. Interest rates are fixed or variable, and you can get a discount on your rate by setting up autopay. Students can’t refinance their parents’ PLUS loans they may have taken out for them, but there are no origination fees or late fees, and there is no penalty for early payoff. If you had a cosigner on your original loan, they are removed when you refinance. Like Earnest’s regular student loans, you can opt to skip one payment a year.

Mortgage loans

As a specialty lender and not a bank, Earnest does not offer mortgages, refinancing or any type of home equity credit. For home loans, Rocket Mortgage and other similar lenders can often get approvals for you even if your credit is not perfect, and there are many other viable banking options for any type of home loan.

As its personal loans cannot be used for real estate purchases or investing, Earnest doesn’t really have an option for home buyers and investors.

Mortgage refinancing

Unfortunately, Earnest also does not offer mortgage refinancing products. The best mortgage refinancing can be found through Quicken Loans and Better.com. All of these offer a variety of options with variable terms from 15 to 40 years. There are fixed and variable rate mortgage refinance loans, and there are pros and cons to each. Be sure to research your needs, and understand that your current equity, credit score, needed loan amount and other factors will all contribute to the type of loan, terms and rates that will be available to you.

Home equity loans and HELOCs

Again, because Earnest is a specialty lender and not a bank, it does not offer any home equity loans or home equity lines of credit. For a HELOC or home equity loan, start by contacting your current mortgage holder to see what options they offer. Alternatively, lenders like Rocket Mortgage, Capital One and even your local credit union may have some great options for you. This will depend on your current equity and other factors.

Car loans

Earnest also does not offer auto financing or car loans of any type. Lenders from Capital One to Ally Financial and Chase all offer competitive auto loan rates and even offer options to those with less-than-perfect credit.

The final word

Who is Earnest best for? Those who have good credit history and are stable financially but need a solid personal loan will find great financing opportunities with Earnest loans. Also, those students who want new or refinanced loans with flexible payback options, and who want to pay back loans quickly will find Earnest likely has a solution for them. It’s not a good fit for those who have poor credit history or high consumer debt. It’s not likely they will get approved, as there are no real options for those with less than good credit.

Earnest overall is a great online lending option. They could do better by offering cosigners on some of their loan products, and by expanding their offerings into states where they are not available at the moment.