Recently, TurboTax agreed to collaborate with Earnest to assist students with student loan savings. The idea sounds promising. Besides, the merger promises to promote Earnest’s refinancing tools and to suggest a rate tailored to their tax return. However, the merger proves more problematic than seamless. Does it really benefit tax filers?
The deal comes into play when tax filers claim the student loan interest tax deduction. The ‘related offer’ shows up on the screen, asking for your consent to view the offer. If accepted, the offer appears after the tax return is complete. It begins by asking for consent on sharing tax information with Earnest. Next, Earnest shows its offer: a detailed refinancing estimate. Agree to this offer and you then go to Earnest’s website to fill out an application and credit check. In closing, Earnest’s process allows borrowers a chance to lower interest rates and/or shorten the repayment deadline. In some cases, both occur.
Are you at ease with this idea? Don’t embrace the change yet. One downside of Earnest tempting tax filers to obtain a student loan is losing government loan benefits. You can’t have both government and private student loans. Second, the qualifications are difficult. Along with a credit check, a stable job, a lender-approved salary, and a co-signer are mandatory. Last, Earnest may not provide the best refinancing offer. Accepting Earnest’s offer means not accepting lower offers from lenders not associated with the government or TurboTax.
In conclusion, TurboTax and Earnest shouldn’t become the sole solution to refinancing. View the offer first, view more lenders with refinancing rates for better offers, and analyze your student loan situation before accepting any offer.