Edly Issued by FinWise Bank Review: Private Income-based Repayment Student Loans

Since late 2021, Edly, in partnership with FinWise Bank (a Utah chartered bank, member FDIC) has offered income-based repayment, or IBR, student loans. Edly's no co-signer private student loans are available to undergraduate seniors, graduate students and certificate-seekers at more than 1,700 schools.

Edly purchased Avenify, a company offering income share loans for nursing school, in January 2022.

Similar to an income share agreement, or ISA, Edly's IBR loan asks borrowers to agree to pay a percentage of their post-graduation salary or a predetermined length of time to satisfy repayment. Edly's IBR has many protections and disclosures associated with standard private student loan products. They also feature maximum repayment and maximum APR caps, which prevent unpaid balances growing endlessly. Edly says its average offered income-based repayment rate is 6.8%, though it can range from 1.96% to 20%.

Borrowers can get $15,000 per academic year and $10,000 for summer sessions, up to a $25,000 lifetime maximum. Approved programs for the no co-signer loan include STEM, nursing and business.

You could end up paying way more than you would with a traditional student loan depending on your offer. How much you'll pay depends on the loan's specific terms and your post-graduation income. Compare the potential costs of an Edly loan with other private loan offers to get the best deal possible.

Exhaust federal loans before turning to any alternative funding option, especially if you plan to participate in a loan forgiveness program such as Public Service Loan Forgiveness. Federal student loans don't require a co-signer, either.

Say you plan to become a registered nurse and earn $83,000, the average salary for RNs in 2021. If you took out a $20,000 Edly student loan with an income-based repayment rate of 6.8%, you would repay $41,959 over seven years (assuming annual salary increases of 2%). That would be similar to repaying a loan with a 15.69% interest rate.

No matter your income-based repayment percentage, you won't pay more than 2.25 times what you borrowed. So on a $20,000 loan, your repayment can be as high as $45,000.

If you earn less than $30,000 a year, you can request a hardship forbearance and make no payments. Other ISAs may automatically set your payment to $0 if your income falls below their threshold. Any months you aren't required to make payments still count toward the cap repayment period — the maximum period you can be responsible for the loan — of 144 months (12 years). If you are making payments, the term is 84 months. If an Edly loan is not repaid after 144 months, the remaining balance is canceled with no further repayment obligation.

If you want to repay an Edly loan early, you will have to pay up to the repayment cap, which is 2.25 times the borrowed amount. If your goal is to repay the debt early, consider other private student loans.

Edly Income-based Repayment Loans at a glance

• Average income share of 6.8%.

• Hardship forbearance is available if you earn less than $30,000, though interest will accrue during periods of nonpayment.

• Total payments are capped at 2.25 times the amount borrowed.

• No maximum length of time for hardship forbearances.

How Edly could improve

• More options to repay student loan early.

• Offer product to students in more states.

• Automatically set payments to $0 when a borrower's income falls below $30,000.

• Not charge interest when a borrower has $0 payments due to low income.

Estimate the cost of an income share agreement

Edly income-based repayment loan details

• Rates, fees and terms

  • Income-based repayment rates: Median, 6.8%. Range, 1.96% - 20%.

  • Soft credit check to qualify: Yes.

  • Repayment term: 7 years, but can extend up to 12 years total via deferment.

  • Amounts: $5,000 to $25,000.

  • Payment cap: 2.25 times amount borrowed.

  • Application or origination fee: No.

  • Prepayment discount: No.

  • Late fees: Yes; $25 or 6% of the past-due balance, whichever is less. Applied after payment is five days past due; borrowers can have the late fee waived one time over life of loan.

  Compare Edly's costs with those for other financing options, like other private student loans. To see what terms Edly will offer you, apply on its website.

• Requirements

  Financial

  • Minimum credit score: No minimum credit score.

  • Minimum income for payments: $30,000.

  • Average post-graduation income of approved borrowers: Did not disclose.

  • Maximum debt-to-income ratio: 30%.

  • Can qualify if you've filed for bankruptcy: No.

  Other

  • Citizenship:

  • DACA borrowers: Not eligible.

  • Location: Not available in Colorado, Iowa, Maine, Vermont and West Virginia.

  • Must be enrolled half-time or more: Yes.

  • Loans can be used for past due tuition: No.

  • Types of schools served: Approved colleges have programs in STEM, nursing, education and business.

  • College level: Seniors and graduate students.

• Repayment options

  In-school repayment options for co-signed loan borrowers:

  • Deferred: No payments are required while in school.

  Post-school and non-co-signed loan repayment options

  • Grace period: Three months.

  • Salary floor: $30,000. If your income falls below the floor, you can request a hardship forbearance.

  • Unemployment deferment: Payments aren't required during periods of unemployment with an approved hardship forbearance. If you're seeking full-time employment — and provide proof of your efforts — these months count toward your full repayment term.

  • In-school deferment: No.

  • Military deferment: No.

  • Forbearance: You cannot pause repayment based on a temporary economic hardship or for reasons other than the ones listed above.

  • Death or disability discharge: Yes.

  Repayment preferences

  • Reports payments to credit bureaus: Yes.

• Customer service

  • Loan servicer: Firstmark and Nelnet.

  • In-house customer service team: Yes.

  • Process for escalating concerns: Yes.

  • Borrowers get assigned a dedicated banker, advisor or representative: No.

  • Average time from application to approval: Immediately. Funds disbursed starting at six business days after certification.

  • Career services: No.

Compare Edly's costs with those for other financing options, like other private student loans. To see what terms Edly will offer you, apply on its website.

How to apply for an Edly income share agreement

Visit Edly's website to apply. Before taking out an Edly ISA or any other type of private student debt, exhaust your federal student loan options first.

» MORE: NerdWallet's FAFSA Guide

Compare your projected costs under Edly's IBR loan with other private student loan options to ensure you get the best deal possible. In addition to how much you'll repay, look at lenders' repayment alternatives and the flexibility they offer to borrowers who struggle to make payments.

Student loan ratings methodology

Our survey of more than 29 banks, credit unions and online lenders offering student loans and student loan refinancing includes the top 10 lenders by market share and top 10 lenders by online search volume, as well as lenders that serve specialty or nontraditional markets.

We consider 40 features and data points for each financial institution. Depending on the category, these include the availability of biweekly payments through autopay, minimum credit score and income requirement disclosures, availability to borrowers in all states, extended grace periods and in-house customer service.

The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.