Review of Earnest Personal Loans | CreditShout

Review of Earnest Personal Loans

By David / December 14, 2015
earnest personal loans review

Earnest entered the arena of online personal loans in 2014 and it's already gained a reputation for low interest rates and a unique merit-based approach to lending. In fact, if you are looking for a lender with a unique approach - either to how they qualify prospective borrowers or how you can management your loan - you may want to check out Earnest.


If you are new to personal loans, you may want to start with our Introduction to Personal Installment Loans.


Earnest Loan Program Overview

If you have good credit and live in a state in which Earnest is licensed to lend, this lender is worth considering. Here's what you should know.

Earnest was founded by Louis Beryl after he was denied a loan for graduate school despite the fact that he had attended Harvard, made his payments on time, and had steady employment.

Earnest has more personal lending approach similar to how banking was done before credit scores. After getting more than $15 million in funding and completing alpha and beta tests, Earnest launched on a wider scale - and now is available in 36 states.

Earnest specializes in providing personal loans to Millennials whose credit scores do not indicate their real creditworthiness. Many Earnest borrowers were turned down by other lenders or quoted very high interest rates of more than 15%. Many are also interested in refinancing student loans.

So, if you been turned down by another lender for a student re-fi or credit card consolidation loan, you are going to want to read on.

Earnest Loan Features:

  • Borrow anywhere from $2,000 to $50,000
  • Interest rates range from 5.25% to 12.00% APR
  • No origination fee
  • No credit score required (but a score of 720+ is recommended, even if based off a thin file)
  • Flexible and customizable loans with the ability to set your precise monthly payment, make bi-weekly payments, choose your exact loan term, and switch between a fixed and variable interest rate.
  • Rate request will not impact your credit score

The Earnest Loan Difference

Earnest focuses on merit-based lending rather than focusing solely on an applicant's credit history and income like traditional lenders.

Earnest uses its own unique algorithm that considers 80,000 to 100,000 data points that make it possible to lend money to people with limited credit histories.

While competitors like Pave, Upstart, and SoFi also use thousands of data points during underwriting, most focus on a borrower's credit score, employment, alma mater, and education.

Earnest stands out from the pack by leaving credit score completely out of the equation. Instead, Earnest requires borrowers to provide a financial history with credit card, retirement account, and banking information. Earnest will check whether applicants make minimum, above-minimum, or full payments on credit cards and applicants can choose to provide their LinkedIn profile to verify employment and education.

Earnest is also unique in that it offers incredibly flexible loans.

  • Borrowers can switch between fixed rates and variable rates on their loan to, for example, turn a 15-year loan into a 5-year loan with a better rate.
  • Borrowers can also choose to make loan payments bi-monthly rather than monthly to save money and make the loan easier to pay with each paycheck.
  • The loan term can even be customized down to the month. You can choose a 12-year-and-10-month loan or choose to reduce your loan term if you can afford bigger payments to get a lower interest rate as an incentive.

How to Qualify

While Earnest does not have strict eligibility guidelines, most borrowers:

  • Are employed or have a job offer letter
  • Have sufficient savings for at least a month's worth of expenses
  • Have a history of on-time payments
  • Always have a positive bank account balance
  • Have income to support expenses and loan payment
  • You will also need to live in one of the states in which Earnest currently makes loans. You can to check the list - which is currently up to 36 states.

Earnest Compared to the Competition

Earnest has among the lowest interest rates in the industry - with flexible loan terms and no origination fees.

Still, an Earnest loan may not be the best option for you if you don't meet their unique - and strict - guidelines outlined above. 

In that case, you may want to compare offerings from other lenders.​


Personal Loan Rates


​And the best way to compare lenders is to either:

The Bottom Line

Earnest is one of the most unique personal loan providers in the marketplace. And, while we must admit it sounds a bit like a serive started by an offended elitist and marketed for people just like him - it really is more than that.

While your credit score isn't considered, you should still have good credit with on-time payments and no delinquencies.

If you meet Earnest's qualifications, their interest rates, very low fees, and flexible loan terms are hard to beat. Very few lenders offer lower interest rates with the exception of SoFi, which requires excellent credit.

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