CommonBond Reviews: Refinancing and Borrowing Student Loans

Loans, Student Loans

Financial technology startup CommonBond offers two products to help borrowers afford college: You can refinance student loans and you can borrow a private student loan to help foot the bill for college. Founded in 2011 by three MBA alumni of the Wharton School at the University of Pennsylvania, CommonBond is well-positioned to help you with both.

IN THIS POST

CommonBond student loan refinancing review
CommonBond private student loan review

CommonBond student loan refinancing review

Like many student loan refinancing lenders, CommonBond lets borrowers refinance undergraduate- and graduate-school loans, and federal parent PLUS loans.

When you refinance federal student loans, they become private loans. Private student loans don’t offer as many borrower protections as federal loans do, such as the ability to enroll in income-driven repayment plans and forgiveness programs.


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AT A GLANCE

  • Fixed rates: 3.37% to 6.74% APR. Variable rates: 2.62% to 6.54% APR. Hybrid: 3.82% to 6.37% APR.
  • Available loan terms: 5, 7, 10, 15 or 20 years
  • Eligible loan balances: $5,000 to $500,000

In addition to the typical fixed- and variable-rate loans, CommonBond offers a 10-year hybrid loan that has a fixed interest rate for the first five years and a variable rate for the remaining five years. It can be a good option for borrowers who want to repay their loans fast but can’t quite commit to a five- or seven-year loan term because hybrid loan rates aren’t as low as five-year fixed loan rates, but they’re lower than the seven-year fixed rates.

» COMPARE: Student loan refinancing options

Do you qualify?

 Minimum qualificationTypical approved borrower
Credit score660750+
IncomeNo requirement$105,000 (median income)
EducationBachelor’s degree or higherBachelor’s degree or higher

Where CommonBond refinancing shines

Borrowers can refinance parent PLUS loans in their name: CommonBond is one of a handful of lenders that allow children to refinance their parents’ federal PLUS loans. This enables children to shoulder the responsibility for the debt instead of the parent.

Relatively long forbearance period: CommonBond borrowers who are struggling to make payments can temporarily pause their payments for up to 24 months total — longer than many other refinance lenders allow for forbearance. However, interest still accrues while loans are in forbearance.

Co-signer release available: Borrowers can remove their co-signer from the loan after they graduate and make 36 consecutive full payments.

Social consciousness: For every loan CommonBond issues, it funds tuition for a child in the developing world through the nonprofit organization Pencils of Promise.

Where CommonBond refinancing falls short

Available to borrowers in only 44 states and D.C.: Borrowers in Idaho, Louisiana, Mississippi, Nevada, South Dakota and Vermont cannot refinance through CommonBond.

More details

Fees: No origination fees or prepayment penalties

Loan servicing: Firstmark Services

Deferment and forbearance: Up to 32 months of academic deferment and up to 24 months of hardship forbearance

Next steps

It’s smart to compare multiple refinance lenders before you choose one. You can get a rate estimate for CommonBond without hurting your credit through the company’s website. If you decide to move forward and complete a full application, the lender will determine your actual rate by doing a hard credit check, which will slightly ding your credit.

You’ll need the following when you apply:

  • Proof of employment (tax documents from the past two years, two recent pay stubs or a letter of acceptance from a future employer)
  • A recent loan statement for each loan you want to refinance
  • Proof of residence (a recent utility bill or bank statement)


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CommonBond private student loan review

In addition to student loan refinancing, CommonBond offers private student loans for undergraduate, graduate and MBA students. Before turning to private student loans, fill out the Free Application for Federal Student Aid, also known as the FAFSA, to see if you’re eligible for grants, scholarships, work-study and federal student loans.


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AT A GLANCE

  • Fixed rates: 5.50% to 9.67% APR. Variable rates: 2.93% to 8.77% APR.
  • Available loan terms: 5, 10 or 15 years
  • Borrowing limits: Up to the school’s complete cost of attendance for undergraduate and graduate students. Up to $110,000 per academic year for MBA students.

» COMPARE: Private student loans

Do you qualify?

 Minimum qualification
Credit score670
IncomeNone
EducationCurrently enrolled — or will be enrolled for the upcoming school year —at least half-time at an eligible institution

In addition to the qualifications above, undergraduate and graduate students need a creditworthy co-signer to apply. MBA students do not need a co-signer to apply.

Repayment options

Similar to other private student loan lenders, CommonBond offers four routes to paying back your debt while in school:

  • Full monthly payments: Make full loan payments during school; this approach will save you the most money.
  • Interest-only payments: Tackle the interest as it accrues during school. You’ll begin making full monthly payments (interest and principal) starting six months after you graduate or leave school.
  • $25 fixed monthly payments: Pay this small amount each month to make progress on your debt while you’re in school. Any unpaid interest will be capitalized, or added to your principal balance, after your six-month grace period ends.
  • Deferment: Postpone payments while you’re in school, but interest will still accrue. If you don’t pay off the accumulated interest before the end of your six-month grace period, it will be capitalized.

Where CommonBond private loans shine

Co-signer release available: Borrowers can request to remove their co-signer from the loan after they graduate and make 24 consecutive full payments. They must also meet CommonBond’s underwriting standards at the time they apply for the co-signer release.

Social consciousness: For every loan CommonBond issues, it funds tuition for a child in the developing world through the nonprofit organization Pencils of Promise.

Where CommonBond private loans fall short

Origination fee: Borrowers will pay a 2% origination fee when they take out a loan through CommonBond; many other private lenders don’t charge origination fees. To compare the total cost of borrowing including fees, compare lenders’ annual percentage rates.

Most borrowers need a co-signer to qualify: CommonBond requires borrowers pursuing undergraduate and graduate degrees to have a creditworthy co-signer. While it’s typical for many other student loan lenders to encourage the use of a co-signer, most don’t mandate it. Students pursuing MBAs do not need a co-signer to qualify for a CommonBond loan.

Available to borrowers in only 44 states and D.C.: Borrowers in Idaho, Louisiana, Mississippi, Nevada, South Dakota and Vermont cannot take out a student loan through CommonBond.

More details

Fees: 2% origination fee. No application fee or prepayment penalty.

Loan servicing: Firstmark Services

Grace period: The six months following graduation or termination of enrollment

Deferment and forbearance: Up to 60 months of academic deferment and up to 24 months of hardship forbearance

Next steps

Compare multiple private student loan options to find the lender that’s best for you. If you’re ready to apply for a loan with CommonBond, you can apply directly on the company’s website. You’ll need the following information when you apply:

  • Social Security number
  • Driver’s license or other government issued photo ID
  • Your school’s cost of attendance
  • Estimated amount of other financial aid you’ll receive (including federal or state student loans, grants, scholarships and work-study dollars)

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Updated June 7, 2017.

Teddy Nykiel is a staff writer at NerdWallet, a personal finance website. Email: teddy@nerdwallet.com. Twitter: @teddynykiel.