Earnest vs. SoFi: Choosing the Best Personal Loan for You

When you’re in a pinch, access to an unsecured personal loan can be a big help. I’ve used a personal loan in the past to help me move across the country, and I know what a relief it can be to have the funds you need.

If you’ve felt that way, you’re in good company. Between 2016 and 2017, the number of personal loan accounts increased by 7.5%, according to TransUnion’s Q4 2017 Industry Insights Report.

Two top contenders for personal loans are Earnest and SoFi. Here’s what you need to know when weighing Earnest versus SoFi for your next personal loan.

Earnest vs. SoFi: A quick comparison

Everyone has their own needs when it comes to getting a personal loan. Your unique financial situation might make one lender work better than another.

Think about the purpose of the loan, and be honest about your credit and debt situation.

“Know what you need before you even start your search,” said Riley Gilson, the chief revenue officer for payday alternative company Credit Fair-E. “You can save money on interest and confidently set the loan terms.”

The chart below offers you a quick overview of some of the key characteristics of Earnest and SoFi loans:

EarnestSoFi
Interest rates5.49% to 18.24% APR5.83% to 14.74% APR
Loan amounts$5,000 to $75,000$5,000 to $100,000
Minimum incomeNoneNone
Loan term length3, 4, or 5 years3, 4, 5, 6, or 7 years
Minimum credit score680None
Alternative credit informationYesNo
Origination feesNoNo
Prepayment penaltyNoNo
Administration feesNoNo
Late payment feesNoNo
Soft credit pullYesYes

As you can see, neither Earnest nor SoFi charge extra fees. They also both use a soft credit pull to provide you with rate quotes. A soft pull won’t impact your credit score, so you don’t have to worry about getting dinged when comparing Earnest versus SoFi.

However, it’s important to note that SoFi offers loans in higher amounts. It’s possible to get up to $100,000 from SoFi. With Earnest, you’re limited to a maximum of $75,000.

Because you can borrow more with SoFi, you also get access to longer loan terms — up to seven years. The longest term with an Earnest loan is five years.

Finally, SoFi doesn’t have a minimum credit score requirement, while you need a score of at least 680 to qualify for a loan with Earnest.

How to apply for an Earnest personal loan

Get an Earnest personal loan

Image credit: Earnest

Applying for an Earnest personal loan is fairly straightforward and intuitive. Interestingly, after you create an account, you go right into sharing information about your education.

Even though Earnest has a minimum credit score of 680, the lender also takes into account your education, job history, and other data to help determine an interest rate.

Once you finish entering your education data, you then need to share your work history. After that, you’ll be asked for your financial information, including your annual income and any assets you have. Link your bank account so Earnest can get a full picture of your situation.

At the bottom of the financial page, you’re required to declare whether you’ve missed any payments or have accounts in collections. If these conditions apply to you, Earnest asks for a short explanation of the situation.

You finish your application with the kind of personal information often asked for with any type of loan:

  • Name
  • Birthdate
  • Phone number
  • Address
  • Citizenship status
  • Address
  • Living situation (own or rent)

Earnest also requires you to upload a full-color government ID. Once you’re done with that, you’ll move on to the review page, where you’ll double-check your information, enter your Social Security number, and consent to have Earnest pull your credit.

The whole process took me about five minutes.

How to apply for a SoFi personal loan

Get a personal loan with SoFi

Image credit: SoFi

Before you can apply for a SoFi personal loan, you need to create an account and log in. You’ll need to provide your name and email address and create a password.

Once you get into your account, look for the lender’s personal loan offering. Unlike Earnest, SoFi asks for your personal information first. On the first page of the form, you’ll provide the following:

  • Name
  • Address
  • Phone number
  • Whether you rent or own (or live with your parents)
  • Birthdate
  • Citizenship status
  • Education information (including schools attended and graduation dates)
  • Employment information
  • How you plan to use the money

After that’s done, you’ll consent to have SoFi check your rate. It took me about three minutes to fill out the form and get a rate quote. Once you have the quote, you can upload required documentation and apply for a loan. If you have the documentation ready, it only takes a few more minutes to complete your application.

When Earnest might be a good choice for you

Earnest might be a good choice if you:

  • Prefer to choose your monthly payment
  • Want a lower interest rate based on factors beyond your credit score
  • Don’t need a longer repayment term

In some cases, you might be rejected for a SoFi personal loan if you have a delinquency in your recent credit history. I recently applied for a SoFi loan, and the reason given for the rejection was a missed payment several months ago. Earnest, on the other hand, might be willing to overlook such mistakes if they’re small and infrequent.

If you’re working on improving your credit and have a score of at least 680, you might benefit from Earnest’s policy of looking at alternative data and considering extenuating circumstances. This can result in a lower interest rate even if you wouldn’t normally see the best rates due to a less-than-perfect credit score.

“Some independent lenders consider aspects of your background beyond credit score,” said Joseph Toms, president of FreedomPlus, a personal lender. “Traditional credit data doesn’t necessarily account for your complete financial profile and ability to pay debts.”

When SoFi might be a good choice for you

SoFi might be a good choice if you:

  • Need to borrow more than $75,000
  • Want a discount on your interest rate for being a member
  • Want a longer loan term

Even though SoFi doesn’t have a minimum credit score requirement, it’s important to note that the lender does take missed payments and current delinquencies seriously. If you’ve made a couple mistakes recently, you could find yourself rejected for a loan from SoFi.

However, SoFi does offer a hardship program. If you lose your job, your payments could be temporarily paused. You could also get a discount on your interest rate if you’re a SoFi member. If you’ve refinanced student loans with SoFi already, getting a personal loan can make sense due to an additional discount on rates.

“Some lenders offer interest rate discounts,” said Toms. “Find out what you need to do to qualify. You can save money over time this way.”

Earnest vs. SoFi: Which should you choose?

When shopping around for the best personal loans, don’t limit yourself to just online lenders. While Earnest and SoFi can both be good choices, it’s not always about the lowest rate or which lender will approve you.

Gilson suggested comparing online offerings with local personal loans from banks and credit unions.

“Read the reviews, too,” Gilson said. “Check with the Better Business Bureau and search online to see what others are saying about them.”

In the end, whether you go with Earnest or SoFi depends on what you’re looking for. If you need a bigger loan and you have a good credit track record, SoFi could be a great choice. However, if you need a little leeway because of a couple repayment mistakes, Earnest might be the way to go.

Get offers from between three and five lenders. Then see what personal loan fits your needs best in terms of customer service, fees, payment flexibility, and terms.

With a little extra research, you should be able to get a loan that works for you — no matter your financial situation.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!

LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. .
2 .
*
Upstart
7.73% – 29.99%$1,000 – $50,000
SoFi
5.83% – 14.74%1$5,000 – $100,000
Upgrade5.96% – 35.97%*$1,000 – $50,000Visit Upgrade
Payoff
8.00% – 25.00%$5,000 – $35,000
FreedomPlus4.99% – 29.99%$10,000 – $35,000Visit FreedomPlus
Citizens Bank4.99% – 16.24%2$5,000 – $50,000Visit Citizens
LendingPoint15.49% – 34.49%$2,000 – $25,000Visit LendingPoint
Lendingclub5.99% – 35.89%$1,000 – $40,000Visit LendingClub
Earnest5.49% – 18.24%$5,000 – $75,000Visit Earnest
Avant9.95% – 35.99%$2,000 – $35,000Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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