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Your Earnest Loan and Coronavirus (COVID-19) - What You Need To Know

First and foremost, we’re here to help. We want you to know we’re making every effort to stay on top of current and recent developments about Coronavirus (COVID-19). Any updates we have will continue to be included in this article. 

Please see below for the latest Coronavirus updates related to your Earnest loan:

What can I do if I’m experiencing financial hardship or I anticipate that I will have a financial hardship in making my upcoming loan payments?

 

Short-term coronavirus forbearance (began July 1, 2020)

We understand that COVID-19 continues to affect many people’s lives.  We’ve created a short-term option for clients who contact us for relief on or after July 1, 2020.  For a limited time, Earnest is offering a short-term coronavirus forbearance to qualified clients who request it. This program brings your eligible loans current and postpones payments for at least one full month. 

The short-term forbearance will not count against your hardship forbearance time.  During this time, you will not be responsible for making payments but interest will continue to accrue. At the end of the short-term forbearance, unpaid interest will not be capitalized (added to your outstanding principal balance).

Other programs that may assist you

  • Short Term Interest Only Program - This program will allow you to make a lower (interest only) payment on your loan for up to 90 days. Your monthly payment will be lowered to an interest-only amount for up to 3 months, this will prevent the post-program monthly payment from significantly rising by extending the terms of their loan by the same number of months (3).
    Making a payment, even a reduced one, is always the best thing long-term as interest continues to accrue. Forbearance will ease the burden of required payments, but making some payments still saves money in the long run.
  • Other programs may also be available, learn more here. Please note that these options may require a review of your and any cosigner's financial situation and ability to pay. 

 

What options are available to me?

To request a disaster forbearance to determine what options you may be eligible for, please complete our request form found here. Within the request form, we will ask a series of questions to help us efficiently deliver your available options. These questions will be: 

  1. Can you provide some details of how you have been financially impacted (loss of a job, loss of wages, etc.)?
  2. If you lost your job, did you get laid off or furloughed?
  3. If furloughed, what is your return date?
  4. If you lost your job, are you currently seeking employment?
  5. What industry do you (or those in your household) currently working in?
  6. Have you filed for unemployment?
  7. Are you still receiving income while not working?
  8. When do you plan on returning to work?
  9. Are you able to make a lower payment today?

Please note, our response times are currently at ten days between 1-2 business days. However, we will process your request from the date received, and any scheduled manual or automatic payments will be processed until forbearance is approved.

Discontinued - Coronavirus national emergency forbearance (good until June 30, 2020)

In response to the national emergency declared by the President in March 2020, Earnest is offering up to three months of disaster forbearance to qualified clients who make their request no later than June 30, 2020. This program brings your eligible loans current and postpones payments for up to three months. 

During this time, interest accrues but will not be capitalized (added to the unpaid principal) at the end of the forbearance period. (Please note if the accrued interest is not paid and you use a different type of forbearance or deferment in the future, the interest could be capitalized at that future time.) While no payments are required during the forbearance period, you can always make extra payments to help lower the overall cost of your loan. 

Additional short-term and long-term relief is available (see below) to assist clients who experience difficulty due to the COVID-19 pandemic and its effects on the economy.

More Frequently Asked Questions 

The Federal Reserve recently dropped interest rates in response to Coronavirus, how does this impact my loan with Earnest? 

We completely understand your desire to take advantage of lower rates. Unfortunately, the Fed’s interest rate isn’t the only factor in how our interest rates are set. We are committed to offering you the most competitive rates we can find and to offering you the best rate possible based on the market conditions. We appreciate this is a time of uncertainty and we are doing our absolute best to provide as much information and support as we can as quickly as possible.

In March, the White House recently announced plans to freeze interest payments on student loans, what is Earnest doing?

This announcement is in regards to federally-owned student loans. Earnest loans are not subject to this proposed policy change. While we’re not part of this policy change, we’ve created options for those experiencing financial hardship. Please take a look at the first question mentioned above on reaching out to us to learn more about your options. 

What if I’m considering student loan refinancing during the current national emergency or have a pending application?

Due to recent events, including an executive order by the President to waive federal student loan interest during the COVID-19 crisis, we want Earnest clients to explore all their options before applying to refinance their federal student loans. 

Refinancing a federal student loan with a private lender means you will no longer have access to benefits of your federal loans, including the temporary 0% interest rate on federally held loans, and suspension of payments, which may last for a number of months.

Please carefully review your current and potential benefits with a federal loan servicer before refinancing. 

Call us at 1-888-601-2801 if you have a pending refinancing and want to review your options or cancel your pending loan, as described below:

If you recently refinanced your student loans with us, you have a right to cancel this transaction, without penalty, by midnight of the third business day after the day you received your Final Disclosures. Please see your Final Disclosures for the specific date and instructions on how to cancel. Your Final Disclosures were emailed to you with the subject line “Your Earnest Loan Agreement” on the day you finalized your loan. If you’re unable to locate your Final Disclosures, please reach out to our Client Happiness Team. 

What are the drawbacks of using forbearance?

Even though interest will not be capitalized at the end of a coronavirus forbearance, there are other considerations you should be aware of.  Your Monthly Payment Amount may increase due to the additional interest accrued during the forbearance.  Your repayment period will be extended by the number of months of forbearance you have used.  And the total cost of your loan may increase due to both the additional interest and your extended repayment period. 

How long will you offer these coronavirus forbearance programs?

These are limited-time programs.  Our original three-month coronavirus national emergency forbearance will not be offered after June 30, 2020.  The new short-term coronavirus forbearance begins on July 1, 2020 and will be evaluated on an ongoing basis. We expect that the short-term coronavirus forbearance program will be phased out over time, as the country reopens for business and COVID-19 cases decrease.  

What if I’m still experiencing difficulty at the end of my forbearance?

We strongly encourage you to explore your long-term options as soon as possible.  There are several existing programs for clients who are experiencing difficulty but can pay a reduced payment amount.

You may be eligible for a standard hardship forbearance if your difficulty is unrelated to coronavirus or its impact on the economy, but note that all normal terms and conditions (including capitalization of interest) would apply.  Please contact us here if you are nearing the end of your coronavirus forbearance and anticipate difficulty making payments.

Why isn’t a private education loan eligible for the temporary interest waiver announced by the White House on March 13, 2020?

The interest waiver announced by the White House is for federally held student loans only. Private education loans are not federally owned or guaranteed. Many of our clients have federally-owned loans in addition to private student loans,  so, other options may be available for those loans.

With this forbearance will my loans be reported negatively to the credit bureaus?

No. Earnest will report loans enrolled in the coronavirus disaster forbearance program as “current” with a payment history of “deferred” and a special comment of “affected by natural or declared disaster." Any delinquency on your loan has been addressed with this forbearance; however, it will not remove any prior delinquency information reported to the consumer reporting agencies. If you have questions about the impact of this forbearance on your FICO score, please visit www.myfico.com.

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