[Editor’s Note: This post is one of five sponsored posts being run this summer as part of The White Coat Investor Scholarship program. Earnest (student loan refinancing) is one of five platinum ($2500+) sponsors of the scholarship, and each of those sponsors gets a sponsored post about their business. What’s a sponsored post you may ask? Not only is the post all about their business, but they also get editorial control over what is written. If you have not yet matched my daughter’s $10 donation to the scholarship fund, you can do so here. Be sure to thank Earnest for their generous donation to the scholarship fund in the comments section and especially with your business.]
You are nearing the end of your residency, and it’s time to start paying off your medical school loans in a meaningful way. You have options to manage your debt, including refinancing your student loans.
Here’s a mini-checklist to see if you’re ready for refinancing:
- You have a full-time job offer for a position starting soon.
- You are currently working in a job with a regular income.
- You’re ready to save money!
When you refinance, you consolidate some or all of your loans and get a new loan at a lower rate. Doctors who refinance with Earnest save more than $36,000 on average.
At Earnest, you can set your monthly payment to an amount that fits your budget—Earnest will then customize your loan with a term and interest rate to match that amount.
A Step-by-step guide to refinancing your medical school loans with Earnest.
Step 1: Set your personal student loan budget.
When weighing your student loan payments, it’s important to consider the bigger financial picture. Are you planning on buying a house? Will you be starting a family of your own soon? What are your financial goals and priorities over the next few years?
Depending on your response to these questions, think of a comfortable monthly repayment budget. With Earnest’s Precision Pricing feature, you have the option to set a monthly payment that works for your budget—whether that’s $500 per month or $2,500—when you’re approved for your refinancing. By using this feature, you will have greater flexibility over how you manage your monthly cash flow—and it allows you to use some of your monthly income to both pay down your loans and save for other financial goals if you need.
In contrast, most other lenders dictate to you the payment to make. We work the other way— you tell us what you want to do. We’ll customize your new Earnest loan with the precise term and interest rate to match your payment.
Step 2: Check your new rate.
Before formally applying, see what kind of rate you will qualify to get—it only takes two minutes.
Check your rate in two minutes here
We only conduct a soft credit inquiry to generate this preliminary rate quote, which does not affect your credit score and does not show up on your credit report. Compare the rate quote with your existing rates. Give us a call at 1-888-601-2801 if you have any questions.
Your full loan application builds on the information you provided in the initial rate check. When you apply, we will ask that you submit the supporting document for each item listed and that you link your financial accounts.
Step 3: Gather all your documentation to apply
Your entire application can be submitted online. During the review of your loan application, our underwriters will need documentation of your income, assets, and liabilities. Be assured that we take your online privacy and account safety very seriously.
We also recommend getting a copy of your credit report before submitting a full application. Carefully review it to ensure that the information is accurate. If something is inaccurate, you have the right to dispute it with the credit reporting agencies.
Earnest only reports to or pulls from Experian, so consider getting your Experian Credit Report. You can get a free copy of your credit report through AnnualCreditReport.com
Step 4: Submit your application.
After you submit your application, our specialists get right to work. It will take between three and five days to review your application thoroughly. When we review your loan application, we take into consideration all kinds of factors that go beyond your FICO score
Our approach to underwriting is holistic—we consider your education, specialty, other assets you may have saved, and the overall picture of your financial responsibility to provide you with the best possible rate.
When you’re approved, we will contact you by email to let you know we’re ready to get your new loan started. There are never any origination fees to start a new loan with Earnest.
Remember that monthly budget number you figured out in Step 1? You’ll need that to set up the exact terms of your new loan.
Step 5: Pay off off your old loans and start your Earnest loan.
Your last to-do is to contact your previous lenders and obtain what’s called the “10-Day Payoff Amount”—this is different than your current balance as it also includes any additional interest accrued. Once we have this information, we’ll start the process of your loan payoff based on the exact amount you shared with us. We have electronic payment agreements with many of the large servicers, so this typically can be done very quickly—however, a few loan servicers could take a little longer.
Read a more detailed explanation of what to expect during the payoff period.
Step 6: Get set up with your loan dashboard.
Once the payoff to your old servicer clears, we will send you a confirmation email. That marks the “activation” of your Earnest loan! Hooray!
You can manage your Earnest loan account through an online dashboard or with the mobile app. Through either, you can schedule payments, make extra payments, and get up-to-date information on your loan balance.
We always recommend setting up autopay—it both saves you money (we offer a .25% APR discount for using autopay) and ensures that you’re never behind on a loan payment. We never charge any prepayment penalties or fees.
Earnest also offers radical repayment flexibility for the life of your loan—and we are ready to work with you for the life of your loan. We never hand off your loan to a third-party servicing company—once an Earnest client, always an Earnest client. Welcome!
Got Questions? We’ve got answers! Call, Chat or Email in with any question big or small for Earnest. Our number is 1-888-601-2801.
Refinance with Earnest today and get the special WCI Deal for $300 cash back!
What do you think? Have you refinanced with Earnest? How did it go? How much have you saved so far? Comment below!
Refinancing is very easy, it is all online. I used a different servicer, 5 yr at 4.55% for $180k. I just started working two months ago, once I become partner in two years, I plan to double my payments to have them paid a year and a half later. Wci gives us excellent information. I just need to find out what to do for retirement this year before I am in the maxed DB plan in my group next year.
By the way, that is for fixed. Variable was much better, but for me the risk of not knowing how it will change, especially with a big election, wasn’t worth it. I shaved off 2.3% so felt pretty good about that.
I think refinancing is a no brainer. I remember reading somewhere that refi could cause someone to become lazy, lower their payment and tempt them to spend more with the extra cash. For me it was the opposite, term change from 30 to 5 year means I have to be aggressive and focused.
A lot would have to happen over 5 years for a variable to not win out, a lot. In all likelihood, you would save more, especially considering your first payments are going more towards principal and thus even if the rate went up (unless exceedingly fast) its on a smaller balance and the weighted average is still better.
No reason to fear variable rates, but do read how theyre calculated and cielings, etc…
There’s reason to fear them, but I think it’s pretty easy to make a case to run the interest rate risk yourself.
I appreciate your feedback. Perhaps I will look into switching loan term once I get a few months under my belt. I guess by nature I always go for the known vs unknown.
It’s scary to see how much tuition costs are in the United States. In Canada (where we already complain about the cost of education) it is much more affordable.
Earnest seems to be doing a great service by making education financing more affordable!
Curious if Earnest (or any other lenders) do a second refinance after an initial refinance? I refinanced with another lender who would do it during residency, but now that I’ve hit attending-hood, I was hopeful that I might be able to squeeze out a better rate. Right now I’m sitting at 4.25% with just under $100k.
Anyone try to do the same? WCI, ever heard of anyone doing a second refinance?
Hi Tyler,
I recently refinanced with Earnest. After 6 months of on-time payments you may submit a new application to refinance again for a lower rate.
They seem to be big on savings so if you didn’t get the lowest rate the first time, make sure you maintain good financial habits and continue to increase the amount you have in savings.
Ive refinanced like 4 times. nbd.
Tyler,
I have heard that SoFi will additionally refinance their own loans. I will likely do that or switch to Earnest within a year after getting one more payment from the NHSC and should be able to go with a 5-year variable, as I’m currently paying extra on 10-year variable. It will save a bit on interest.
Yes, lots of people have. If they won’t do it, you just move on to another company. No guarantee you’ll get a better rate or term of course.
Can only residents who are graduating/attendings refinance with Earnest or do you guys also allow current residents to refinance? Thank you!
Hi Gordon,
Earnest’s offices are currently closed or I’d call and get an answer to your question. Based on their eligibility guidelines (https://www.earnest.com/eligibility) you should qualify because you are employed but you might be rejected due to your debt-to-income ratio, amount of savings, etc.
Based on WCI’s prior posts on student loan refinancing for residents, it seems as though your options are limited to DRB and LinkCapital. Maybe he will chime in with a definitive answer regarding refinancing with Earnest as a resident.
I have about 200,000 in loans; fairly low for somebody with very minimal family help.
My credit score is 780 and have an error free credit report. Regardless, as an R2 making below the national average I was denied refinancing by Earnest.
Interestingly enough I also have 45,000 in retirement funds but none of this helped get accepted for a lower rate.
Even resident friends with very low debt of <100,000 got offers from the other loan companies that were about 0.3% cheaper than their current rates! And they had to pay over a five yr time span!
You really have to have signed a contract to get a reasonably lower rate.
Oh and I live on 14,000 a yr so I VERY easily make my loan payments.
Helps living with roommates and paying 510 all inclusive rent in a normal cost state. (Heat, water, internet, electricity)
PoorIam,
From what I understand, Earnest has higher standards for loan approval that, paradoxically, allows people who would 1) not get refinanced elsewhere or 2) be offered horrendous rates with less stringent refinancing companies to get refinanced and gain access to competitive rates. All of this is to say, you really need to be able to check off all the items listed in the “eligibility” link, most of which focus on savings.
Based on what you’ve shared, I suspect you were denied because you lacked adequate savings. They want you to have a sizable emergency fund saved in a bank account not an investment vehicle. Everything counts but they’re big on savings/cash on hand.
I have 4,000 in emergency savings, a lot since my fixed costs are 1,000 a month.
Also, thanks for chiming in from a resident applicant’s perspective.
From what I understand, refinance options for residents is, currently, extremely limited.
[Correction: I was just informed by a resident who refinanced his loans with Earnest. (He got 3.5% variable.) Good news! Another option for residents wanting to refinance.]
Link Capital not currently lending AFAIK. I’m hoping for one more soon, but right now it’s Earnest or DRB for residents without an attending contract.
No residents so far. I’m always pushing for it though, every time I talk to a company! The problem is it is a tough product to sell to investors. Think about it. You want someone to buy a $200-400K loan on which not even the interest can or will be paid for 3-7 years, and then it’ll only pay you a percent or two more than a treasury bond? Tough sell. So not much money available to lend to residents out there, and what there is seems to be in the 5%-5.5% range. Not much of a drop from what the loans were and higher than most people have effectively with REPAYE, at least for government loans.
Agree. Who on earth would want such a product…Europe, maybe they’d take it?
Its not great, but waiting until you’re an attending isnt too bad. Since I was self employed I had to wait an additional 2 years after.
Heads up, the first link “mini-checklist” is broken. It has the WCI address prepended.
Thanks. I’ll fix it.
Great post mate!
Very informative and nice analysis, the steps you mentioned in refinancing medical student loan is really helpful for many medical students like me and I should surely implement these and try our once. As I have been lagging behind saving money and making my financial status stable. I feel like I should act now.
Thanks for the post,
Have a good day!
(Earnest – College Debt Consolidation) The application process is easy. Although mine took a bit longer than expected so make sure to call them to check on your application status if you suspect it is taking longer than usual (a couple days to a week to respond with approval/denial/requesting more information.
Also, definitely use my referral code ……….. to get an easy $200 off when your loan is approved.[Alternatively, use the WCI code to get $300 off instead- https://www.meetearnest.com/partners?utm_source=whitecoatinvestor%5D– Thank you in advance –