Earnest vs. SoFi: Who is Best for Student Loan Refinancing?

Earnest and SoFi are two student loan refinancing companies that both offer fixed as well as variable rate loans, a 0.25% autopay rate discount, and certain unemployment protections to help in the event of involuntary job loss. However, there are also differences between the two to keep in mind.

Comparing Earnest vs SoFi

Here’s a side-by-side comparison of both lenders to help you make an informed decision. Keep in mind that neither Earnest nor SoFi are Credible partner lenders.

Earnest student loan refinancing

Best for: Borrowers with fair credit

Unlike other lenders that require good to excellent credit for refinancing, you might qualify with Earnest even if you have fair credit. With Earnest, you can refinance loan amounts from $5,000 to $500,000 ($10,000 minimum for California residents) with repayment terms from five to 20 years.

Requirements to borrow from Earnest

To refinance your student loans with Earnest, you must:

• Be a U.S. resident, permanent resident, or visa holder
• Have a minimum credit score of 650
• Be employed, have a written job offer that starts within 6 months, or demonstrate consistent income
• Have graduated with an associate degree or higher from a Title IV-accredited school, or be or be within six months of graduating and have a job offer
• Not live in Delaware, Kentucky, or Nevada

Pros

• Accepts fair credit: Many lenders require borrowers to have good to excellent credit to qualify for refinancing. But with Earnest, you might qualify even if you have fair credit.
• High loan maximum: With Earnest, you can refinance $5,000 up to $500,000 ($10,000 minimum for California residents). This could be helpful if you attended an expensive program, such as law or medical school.
• Can defer one payment each year: Earnest allows borrowers to defer one monthly payment per year with no penalty. You’ll just need to have made at least six consecutive, on-time payments to defer for the first time.

Cons

• Cosigners not accepted: Unlike many other lenders, Earnest doesn’t allow borrowers to refinance with a cosigner. This means you’ll need to qualify on your own merit, which might be difficult if you are a new graduate, have poor credit, or don’t have a stable income.
• Limited availability: Earnest student loan refinancing isn’t available in Delaware, Kentucky, or Nevada.
• Variable rate restrictions: Earnest offers both fixed- and variable-rate loans. However, its variable rates aren’t available to residents of Alaska, Illinois, Minnesota, New Hampshire, Ohio, Tennessee, or Texas.

SoFi student loan refinancing

Best for: High student loan balances

With SoFi, you can refinance loan amounts starting at $5,000 up to the full balance of your qualified education loans with terms from five to 20 years. SoFi borrowers also have access to several perks, such as unemployment protection, career coaching, and investing advice.

Requirements to borrow from SoFi

To be eligible for student loan refinancing through SoFi, you must:

• Be a U.S. resident, permanent resident, or visa holder
• Have good credit
• Be employed, have sufficient income from other sources, or have an offer of employment to start within the next 90 days
• Have graduated with an associate degree or higher from a Title IV school

Pros

• High loan amounts: With SoFi, you can refinance $5,000 up to the full balance of your qualified education loans.
• No fees: Unlike some lenders, SoFi charges no fees for refinancing — for example, you don’t need to worry about late fees or prepayment penalties.
• Borrower perks: With SoFi, you’ll have access to a variety of valuable perks, such as unemployment protection and free investing advice.

Cons

• Might be hard to qualify if you don’t have good credit: SoFi doesn’t disclose its minimum credit score requirements — however, the average credit score of SoFi borrowers is 779. This means it might be difficult to get approved if you have poor or fair credit.
• Doesn’t offer cosigner release: While SoFi allows borrowers to apply for refinancing with a cosigner, it doesn’t offer a cosigner release option for refinanced loans. If you have a cosigner on your SoFi loan, you’ll have to refinance again if you want to remove them from the loan.
• Degree required: You must have graduated with an associate degree or higher from a Title IV school to refinance with SoFi. Most SoFi borrowers hold advanced degrees in fields like law or medicine.

Or you could opt to extend your repayment term to reduce your monthly payment and lessen the strain on your budget — though keep in mind that this means you’ll pay more in interest over time.

How to refinance student loans

If you’re ready to refinance your student loans, follow these four steps:

1. Research and compare lenders. In addition to Earnest and SoFi, be sure to shop around and compare as many student loan refinance companies as possible to find the right loan for your situation. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibility requirements.
2. Pick a loan option. After you’ve done your lender research, choose the loan option that best suits your needs.
3. Complete the application. Once you’ve picked a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs. Also be prepared to provide information regarding each of the loans you want to refinance.
4. Manage your payments. If you’re approved, continue making payments on your old loans while the refinance is processed. Afterward, you might consider signing up for autopay so you won’t miss any payments in the future — Earnest, SoFi, and many other lenders offer a rate discount to borrowers who opt for automatic payments.

Choosing a lender to refinance your student loans

If you’re struggling to manage your student loans — while also juggling other debt like a credit card or auto loan — a student loan refinance could be a huge help. With refinancing, you might be able to save money, get out of debt faster, and even reduce your monthly payment.