Edly Student Loans seeks to redefine the financing landscape through Income Share Agreements (ISAs), offering an innovative alternative to traditional student loans. In this article, we will conduct a comprehensive review of Edly Student Loans, exploring their features, benefits, application process, and how they contribute to revolutionizing education financing.
Edly offers a unique approach to student financing by providing Income Share Agreements, which allow students to access funding for their education while sharing a portion of their future income with investors. This model aims to align the interests of students and investors, creating a mutually beneficial arrangement.
Key Features and Benefits
Edly Student Loans, in the form of Income Share Agreements, come with distinctive features and benefits:
- Income-Driven Repayment: With ISAs, repayment is linked to a percentage of the student’s future income. This approach ensures that payments are manageable and proportionate to earning capacity.
- No Fixed Interest Rates: Unlike traditional loans, ISAs do not come with fixed interest rates. Instead, students repay based on their income, providing greater flexibility.
- Financial Protection: ISAs often come with a cap on the total amount repaid, protecting students from excessive repayment burdens even if their income exceeds expectations.
- Career Support: Edly provides additional resources, including career guidance and networking opportunities, to support students’ post-graduation employment prospects.
- Investor Involvement: Edly involves investors who fund students’ education in exchange for a portion of their future income. This alignment ensures that students’ success directly benefits investors.
Check: Credible Student Loans Reviews
Application Process and Eligibility
Applying for Edly Student Loans through Income Share Agreements involves the following steps:
- Submit Application: Begin by applying through Edly’s platform, providing information about your educational background, career goals, and expected major.
- Receive Offer: Once your application is reviewed, you’ll receive an offer detailing the terms of the Income Share Agreement, including the percentage of income to be shared and the repayment cap.
- Accept the Agreement: If you find the terms acceptable, you can accept the Income Share Agreement and proceed with the funding process.
- Receive Funding: Once the agreement is finalized, you’ll receive the funds necessary to cover your educational expenses.
Considerations and Responsible Borrowing
While Edly’s Income Share Agreements offer unique benefits, responsible consideration remains important:
- Understand the Terms: Thoroughly understand the terms of the Income Share Agreement, including the repayment percentage and the repayment cap.
- Evaluate Your Earning Potential: Consider your chosen career path and earning potential to determine if the ISA is a suitable financing option.
- Explore Alternatives: Compare Edly’s ISA terms with those of traditional student loans and other financial aid options.
Pros and cons of Edly
Here are the benefits and downsides to be aware of before going with a loan from Edly.
PROS
- Transparent minimum income threshold: Edly doesn’t require borrowers to make any payments until their yearly gross income either meets or exceeds $30,000.
- Uses factors other than credit score: Edly doesn’t base approval on credit score alone. It also factors in your academic transcript, expected graduation date, and anticipated gross annual income. You’ll go through only a soft credit check during the prequalification process, so your credit score won’t be affected until you submit an application.
- Many partner schools: Edly works with more than 1,700 schools and more than 100 majors, so its products are available to many types of students.
Check Low Student Loan Rates
CONS
- Limited loan amounts: Edly limits its total loan amount to $15,000 per year or $25,000 total, so it’s not a great option for students who need to cover the full cost of their education at an expensive school.
- Rates not specified: Edly does not disclose any of its income rate percentages publicly. Students will need to get a quote from the company to accurately estimate how much a loan will cost them.
- Few eligibility requirements disclosed: Edly is cagey about who qualifies for its product. To find out if you’re eligible, you’ll have to submit a request for a quote.
Student Loans Offered by Edly
Undergraduate/Graduate Student Loans
Edly offers income-based student loans for undergraduate and graduate students at over 1,700 supported schools.
Loans don’t have specific interest rates; as mentioned, payments are based on your income and other criteria. This means the effective rate can vary wildly, from 9.4% to 23% APR.
Repayment amounts are based on income, and graduates making less than $30,000 do not need to make payments.
| Terms for Undergraduate/Graduate Loans | |
|---|---|
| Loan APR | 9.40% – 23% |
| Loan amounts | $5,000–$15,000 per academic year, $25,000 lifetime total, small loans of $2,000 are also possible |
Loan Eligibility and Approval
To qualify for a student loan with Edly, you must meet the following eligibility requirements:
- Be at least 18 years old or the age of majority in your state
- Be a U.S. citizen or permanent resident
- Be enrolled in a degree-seeking program for a bachelor’s or graduate degree
- Be attending an eligible school
- Have a valid Social Security number
- Be a junior or senior within two years of graduation, or a graduate student
- Cannot live in Colorado, Iowa, Maine, Vermont, or West Virginia
Edly does require a minimum for the IBR No Cosigner Student Loan. Edly will also review your major to determine your future income potential.
DACA recipients and international students cannot qualify for a loan with Edly.
Are Co-Signers Required?
Edly does not require co-signers for loans, and in fact, does not offer co-signing for any of their available student loans. Students must qualify based on their own financial and academic information.
Is Loan Pre-Qualification Available?
Yes. Edly offers online pre-qualification that can be completed in just a few minutes. You will need to provide the following information:
- Full name
- Address
- Estimated annual income
- Estimated credit score
- School name
- Expected graduation date
- The amount you’d like to borrow
- Social Security number
Edly will run a soft pull of your credit profile for pre-qualification, and you will be able to choose loan terms to see potential rates.
Length of Time for Loan Approval and Disbursement
Loan applications are all done online, and approval is typically within the same day. Once approved, Edly will reach out to your school for certification. While the time to certify varies by school, the process typically takes two to four weeks. Some schools don’t accept funds until closer to enrollment. Once certification is complete, Edly will disburse funds to your school.
See also: Student Loan Refinance
Edly Student Loans Fees and Repayment Options
Loan Fees
Edly does not charge loan application fees, and there are no origination fees either. Prepayment doesn’t come with any additional fees either. There is a maximum repayment cap on the loans and a very wide effective APR range. The amount you pay will vary with your income and financial situation as well as how long it takes you to make enough payments.
Loan Discounts
Edly does not offer loan discounts.
Edly Student Loans Repayment Options
Edly loans operate on one unique system. The loans are based on income, and payments are different until four months after graduation. At that point, you’ll begin income-based repayment. The more you earn the more you’ll pay and if your income decreases your payment will too. This system also includes hardship and unemployment protection. Should your annual income drop below $30,000, you’ll stop paying until it exceeds that threshold again.
Loan Forbearance and Discharge Options
Edly does not offer traditional forbearance or discharge but does offer deferred loans.
As mentioned above, Edly offers payment deferment for anyone making under $30,000. Payments are paused during this time, though you may need to send in current pay stubs or proof of job search. There is no time limit on this deferment period.
Is Student Loan Refinancing Available?
Edly does not offer student loan refinancing.
If you already have a loan and you’re looking to lower your rate, Edly won’t be for you. Check out our picks for the best student loan refinance companies to see your options
Applying for an Edly Student Loan
Edly offers online applications that begin with a simple pre-qualification. Once you are pre-approved, you can choose your loan details, and then complete the application by providing further information and documentation.
Some of the information you will need to provide includes:
- Name
- Address
- Date of birth
- Social Security number (for ID verification)
- School of attendance
- Expected graduation date
- Requested loan amount
Edly doesn’t require income verification for pre-qualification, though it will do a soft pull of your credit to check for any negative marks on your reports and if a FICO score exists, a minimum does apply for the IBR No Cosigner Student Loan. After approval, Edly will request certification from your school before disbursing the loan.
Alternative Choices
| Edly | ISL Education Lending | Ascent | ||
|---|---|---|---|---|
| Loan types offered | Undergraduate; graduate | Undergraduate; graduate; parent | Undergraduate; graduate | |
| Undergraduate fixed APR | N/A | 3.95%–8.01% | 4.48% – 15.51% (credit-based cosigned) 9.51% – 15.51% (credit-based non-cosigned) 12.60% – 14.24% (outcomes-based non-cosigned) | |
| Undergraduate variable APR | 9.40%–23% (IBR payment plan) | 6.10%–10.64% | 5.94%–15.83% (credit-based cosigned) 9.83%-15.83% (credit-based non-cosigned) 12.88%-14.83% (outcomes-based non-cosigned) | |
| Origination/administrative fee | None | None | None | |
| Repayment options | N/A | Deferment; interest-only; immediate repayment | Deferment; fixed; interest-only | |
| Refinancing available | No | Yes | No |
Customer Service
Edly offers only basic contact information on its website, but you can contact the customer support team via email ([email protected]), live chat, and phone.
The phone number is (888) 469-3359; support is available from Monday to Friday, 8 a.m. to 7 p.m. Eastern Time.
The Consumer Financial Protection Bureau (CFPB) did not include Edly, nor its funding bank (FinWise Bank) in its annual consumer report.
Read: Splash Financial Student Loan Refinancing Review
Conclusion
Edly Student Loans are at the forefront of reshaping education financing through Income Share Agreements. By linking repayment to future income, Edly aims to alleviate the financial burdens of students while fostering a symbiotic relationship with investors.
As you explore your financing options, take the time to carefully review the terms, weigh the benefits against potential trade-offs, and make an informed decision that aligns with your academic goals and financial aspirations. Edly’s innovative approach to education financing highlights the potential for collaborative solutions that benefit students, investors, and the future of education.
