Having faced the struggles of student loan debt as University of Pennsylvania MBA students, David Klein, CommonBond CEO, and co-founders Michael Taormina and Jessup Shean were keen to provide a better alternative to fellow borrowers.
CommonBond began as a fledgling start-up in 2011 with ambitions to shake up the trillion dollar student loan market. Since then the company has received equity and debt funding of over $750 million, and competes vigorously with its arch-rival, SoFi, to refinance student loans and to offer private student loans.
Unlike most other financial technology firms, CommonBond launched with a social component to their business. For each loan issued, CommonBond commits to fund the education of a child in need via a non-profit organization, Pencils of Promise.
Beyond its social promise, a primary reason to consider CommonBond is its competitive rates. Like SoFi, CommonBond targets super-prime borrowers so you will need to be a creditworthy borrower to be eligible for consideration.
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Private Student Loan Review
CommonBond offers private student loans to undergraduates, graduates, and MBA students for up to 15 years.
Undergraduates, graduates, and MBA students are eligible for CommonBond private student loans.
Fixed and variable rate loans are available for 5, 10 and 15 year terms.
The APR rates range from:
|Loan Type||APR Rate|
|Fixed||5.38% → 9.67%|
|Variable||3.08% → 8.96%|
MBA students can borrow up to $110,000 while undergraduate and graduate students can borrow up to the maximum cost of school attendance.
To qualify for a loan, you will need to be currently enrolled at least half-time in an eligible institution (or be enrolled for the next school year) and have a credit score of at least 670.
You will need a co-signer who meets creditworthy standards to apply unless you are an MBA student.
Can I Repay My Student Loans While In School?
CommonBond allows you to defer payments or pay partially or in full while in school.
You don’t have to make payments while you are in school but it would be wise to do so if you can because interest accrues the whole time.
As a CommonBond borrower, you receive a grace period of 6 months to pay off accumulated interest otherwise it will be added to your principal balance.
If you can afford to make partial but not full payments, consider an interest-only plan whereby you discharge interest payments during your schooling and shoulder the full cost of principal and interest payments six months after graduating or leaving school.
To keep the sum of your payments until the debt is discharged as low as possible, you can repay both principal and interest while in school.
A final option is to pay a nominal monthly amount of $25. The accumulated interest charges will then be added to your principal balance within six months of graduation.
CommonBond Private Student Loans: Pros and Cons
CommonBond offers low rates for private student loans but you will need a creditworthy co-signer to apply unless you are an MBA student.
|CommonBond Pros||CommonBond Cons|
|✅ Low Rates: Fixed and variable rates are highly competitive.||❌ Origination Fee: Origination fees of 2% are charged on CommonBond private student loans; these can be avoided by choosing some other lenders.|
|✅ Loan Types: Both fixed and variable rate loans are available to undergraduate, graduate, and MBA students.||❌ Coverage In 44 States: CommonBond offers loans in all states except Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont.|
|✅ Flexible Forbearance Period: Hardship forbearance is offered for up to 2 years while academic forbearance is offered for up to 5 years.||❌ Co-signer Required: Unless you are an MBA student, you will need a creditworthy co-signer to apply for a loan from CommonBond.|
|✅ Grace Period: CommonBond borrowers receive a six month grace period to start making loan payments upon graduating or leaving school.|
|✅ CoSigner Release: After 2 years of consecutive full payments, CommonBond will permit the release of a co-signer.|
|✅ Very Low Default Rates: When you are approved for a loan from CommonBond, you can count yourself among good company because default rates are very low among borrowers.|
|✅ Social Promise: A silver lining when you take out a loan with CommonBond is that the company funds the education of a child in need via the non-profit organization, Pencils of Promise.|
CommonBond Student Loan Refinancing Review
Fixed, variable and hybrid loans of up to $500,000 are available for up to 20 years.
CommonBond began by offering student loan refinancing to MBA students from the Wharton School of the University of Pennsylvania and other Ivy League universities.
Over time, CommonBond has expanded its network of schools to encompass over 2,000 schools nationally.
Borrowers can refinance from $5,000 to $500,000 using any of three types of loans:
- Undergraduate student loans
- Graduate student loans
- Federal Parent PLUS loans
Federal loans come with the benefits of income-based repayment plans and forgiveness programs. However, once you decide to refinance your loans, they become private loans and you lose those borrower protections.
CommonBond offers fixed, variable and hybrid loans to borrowers who typically have at least a bachelor’s degree or higher.
|Loan Type||APR Rate|
|Fixed||3.18% → 7.12%|
|Variable||2.81% → 6.74%|
|Hybrid||3.77% → 6.22%|
The available term length of the loans are 5, 7, 10, 15 and 20 years with the exception of hybrid loans, which have ten year terms and feature a fixed rate for the first 5 years and a variable rate for the latter 5 years.
Hybrid loans are less expensive than 7-year fixed rate loans and are a good option for borrowers who cannot afford to repay loans in as soon as 5 or 7 years.
You will generally need to earn a salary of at least 6-figures and have excellent credit, ideally with a credit score north of 750+ to qualify for a student refi loan with CommonBond.
CommonBond Student Loan Refinancing: Pros and Cons
CommonBond offers low rates on fixed, variable and hybrid loans over a wide variety of durations, generous forbearance periods of up to 2 years, and co-signer release option but loans are not available in every state.
|CommonBond Pros||CommonBond Cons|
|✅ Low Rates: CommonBond offers highly competitive rates in line with leading student lender, SoFi.||❌ Not Available Nationally: CommonBond is not available to borrowers in:
|✅ Fixed, Variable & Hybrid Loans: A variety of loan types are available, with hybrid loans offering an especially attractive option to borrowers who want to lock in a fixed rate now and pay a variable rate later.||❌ High Hurdle To Be Approved: CommonBond targets high wage earners with low risk of default so the hurdle to winning loan approval is high.|
|✅ Numerous Term Lengths: Loans are available for 5, 7, 10, 15 and 20 year periods – though hybrid loans are only available over 10 year periods.||❌ BBB B+ Rating: The Better Business Bureau awards CommonBond a B+ rating, which is good but not stellar considering some other lenders who accept customers with lower credit have A+ ratings.|
|✅ Long Forbearance Period: Like SoFi, Commonbond is flexible with borrowers when it comes to forbearance. While interest does accrue during a forbearance period, CommonBond allows borrowers to suspend payments for up to 2 years for hardship forbearance and 32 months of academic deferment.|
|✅ CoSigner Release: After 3 years of full payments, borrowers can release a co-signer from the loan.|
|✅ Refinance ParentPLUS Loans: Children are permitted to refinance the federal parent PLUS loans of their own parents if they wish and can afford to take on the repayment responsibilities.|
|✅ No Origination Fees: You won’t be charged any origination fees or prepayment penalties when refinancing your student loan with CommonBond.|
*Loan servicing is performed by Firstmark Services.
Meet The CommonBond Team
Taking out a student loan or refinancing one is a big step. Although you will have to go a long way to find another lender who beats CommonBond on rates, it doesn’t hurt to shop around and see what other lenders are charging for fixed, variable, and hybrid rate loans.
If you decide to take the plunge with CommonBond, keep in mind that default rates are extremely low which means the company scrutinizes you more intensely than simply considering cursory information such as your credit score.
You will need to provide CommonBond with information such as the cost of your school attendance, and an estimate of financial aid you receive from other sources, such as scholarships, grants, and other loans.
For a side-by-side comparison of its nearest competitor, check out SoFi also so you can make a more informed decision.