CommonBond Review: Student Loan Refinance And Consolidation

CommonBond also has an emphasis on social responsibility. Adhering to what they refer to as their “Social Promise”, the company believes that business can and should be a positive force for change. 

Through their partnership with Pencils of Promise they fund the tuition of a student in need – located in a developing country – for a full year, for every degree fully funded here in the US. That means while you are financing your education through CommonBond, you’re also contributing to the education of an underprivileged child.

CommonBond has a rating of “B+”, on a scale of A+ to F by the Better Business Bureau.

CommonBond Features And Benefits To Refinance Student Loans

Minimum and maximum loan amounts: The minimum is $2,000, subject to state law. The maximum loan amount is the amount you owe on your current student loans – or 100% of your school’s cost of attendance – up to $500,000.

Loan terms: Most loan programs are available in terms of 5, 10 and 15 years, and some go up to 20. They’re available in both fixed and variable rates.

Availability: All 50 states.

Loans eligible for refinance: Both federal and private student loans, as well as previously consolidated loans. Includes undergraduate, graduate, MBA, dental and medical loans. Provides both student loan refinancing and private student loans for current students.

Cosigner permitted: Yes. Cosigner must be fully qualified based on income and credit, and must similarly be either a US citizen or permanent resident.

Cosigner release: Cosigners can be released after two years of consecutive, on time payments. Consecutive payments are interrupted if you enter forbearance. You must apply to have your cosigner release from the loan, as it isn’t automatic.

Grace period: You’ll have a grace period of six months after you graduate before you must begin making payments. However, interest will accrue during the grace period, and will be added to your loan balance.

Refinance frequency: There’s no limit to the number of times you can refinance your student loans through CommonBond.

Repayment options: CommonBond offers four different options for most loans:

1. Defer making payments until graduation, in which case interest will accrue and be added to your loan balance.
2. Make fixed monthly payments of $25, with any unpaid interest accrued and added to your loan balance.
3. Interest-only payments, in which you at least make the interest payments to avoid increasing your loan balance.
4. Full monthly payments to begin paying down your principal balance while you are still in school.

CommonBond security: The company uses physical, administrative, and technical safeguards to protect your information. They’re also compliant with the California Consumer Privacy Act of 2018.

Mobile app: Not offered.

Customer service: Available by phone or email, Monday through Friday, from 9:00 am to 8:00 pm, Eastern time. CommonBond has “Money Mentors”, who are live experts available to provide answers to your student loan financing questions. They can help you with topics such as how to create a budget, submitting the FAFSA application, finding internships, building credit, and even mapping majors to career pathways. Undergraduate borrowers are automatically enrolled in the Money Mentor program.

Forbearance due to economic hardship: Available under certain circumstances, including economic hardship. You can apply to defer your payments through the program. Forbearance is available for up to 12 months, however it extends to 24 months on student loan refinances.

Loan servicing: Though loans are provided by CommonBond, they are serviced at FirstMark, which is where you will mail your payments.

CommonBond Referral Program

If you refer friends and family members to CommonBond, you’ll receive a $200 cash bonus for each person who takes a loan through the platform.

The bonus will be paid through PayPal 1 to 3 weeks after your referral signs all final documents (or after the funds are disbursed in the case of a refinance).

There is no limit on the number of referral bonuses you can earn, and you don’t even need to be a CommonBond customer to earn it. An IRS form 1099-MISC will be sent if six or more referral bonuses are paid in any one year.

Please note that medical school loans are the only program type that charges an origination fee. This fee is 2% of the amount borrowed, and is deducted from the loan proceeds.

CommonBond Dental School Loans

Dental school loans are available in terms of 10, 15 and 20 years, and can be either fixed-rate or variable rate. The program comes with a six-month grace period after graduation before payments are due. But you can also fully defer payments on a verified resident program until completion.

Meanwhile, forbearance is available for up to 12 months over the life of the loan. In addition, the loan will be canceled in the event of death or disability.

CommonBond Student Loan Refinance Loans

You can refinance the full amount of your student loan debt you owe, up to a maximum of $500,000. Both federal and private student loans can be included in your refinance.

Be aware that if you have federal student loans, refinancing those loans could cause you to lose important student loan relief benefits available only on federal loans. These include income-driven repayment plans and public service loan forgiveness (PSLF) that will be lost if you refinance those loans into private loans.

Student loan refinances are available in three loan types, fixed-rate, variable rate, and a hybrid mix of the two. (An explanation of the hybrid loan will be provided in the next section.)

Forbearance is available for up to 24 months over the life of the loan.

CommonBond Rates And Fees

Since CommonBond offers six different loan programs, the pricing is slightly different for each. Five offer both fixed rate and variable rate programs, while one also offers a hybrid mix of both fixed and variable in the same program.

Below is a description of each of the three loan types, fixed, variable, and hybrid. A table follows that provides current interest rate APRs.

Fixed Rate Loans

Fixed rate loans, as the name implies, have a constant interest rate and monthly payment throughout the term of the loan. This is the safest kind of financing because payments are completely predictable and not subject to change.

Variable Rate Loans

Variable rate loans are popular because they generally have interest rates that are lower than what you will find on fixed rate loans. However, they’re also riskier loans because both the rate and monthly payment can change.

Variable rate loans are based on an index, like the one-month LIBOR, plus a margin spelled out in your loan documents. Your interest rate and monthly payment will change anytime there’s a change in the index. However, these loans come with interest-rate floors and caps to prevent them from becoming excessive.

Before deciding on a variable rate loan you should make sure you can comfortably afford the monthly payment based on the highest interest rate possible with the loan.

Hybrid Loans

CommonBond offers these loans, which are a blend of both fixed and variable rates. For the first five years alone it has a fixed interest rate. But for the balance of the term – which must be at least five years – the rate varies according to the one-month LIBOR, plus a margin determined by the loan documents for your program. The rate will change any time the one-month LIBOR does.

Current Interest Rates on Fixed, Variable and Hybrid Loans

Interest rates on CommonBond student loans are as follows for fixed, variable and hybrid loans, check their site for current rates:

• Your first and last name
• Email address
• You’ll then create a password
• Your phone number
• Student loan balance (which can be an estimate)
• Highest degree earned
• Annual pretax income (again, an estimate is acceptable)
• Your current physical address
• Your citizenship
• Social Security number

Once again, completing the application will result in a soft credit pull that will not affect your credit score.

You’ll also need to supply the following documentation, which can be uploaded to the website with your application:

• Proof of employment, which can be 1) a recent pay stub, 2) two recent years of tax documents, or 3) a letter of acceptance from a future employer.
• Proof of residency, such as a utility bill or a recent bank statement with your home address.
• A recent loan statement for each loan you want included in your refinance. It must include the servicer’s name, your name, the account number, loan balance and physical address where the payment will be mailed.

During the initial application, a soft credit pull will be performed to determine your interest rate. This will not affect your credit report or score in any way. If you agreed to go through with the application, a hard inquiry will be performed that will appear on your credit report.

CommonBond Pros and Cons

There are quite a few positives to getting a student loan through CommonBond, but there are a few cons as well. 

Pros

• CommonBond is a direct lender
• The company charges some of the lowest interest rates available on student financing  
• No application or origination fees and no prepayment penalties on most loans
• Get prequalified with a soft pull on your credit that will not affect your credit score
• Cosigner release is available after 24 months
• Forbearance is available for between 12 months and 24 months over the life of your loan
• Completing the FAFSA form is not a requirement for CommonBond loans
• When you get a loan from CommonBond the company will provide an education for a full year for a student in need in a developing country
• $200 referral fee paid for an unlimited number of referrals – you can earn the bonus even if you’re not a customer

Cons

• Cosigners are required on in-school student loans
• There is a 2% origination fee charged with Medical School Loans
• No mobile app

Who Will CommonBond Work Best For To Refinance Student Loans?

CommonBond is an excellent choice for anyone who is looking for low-cost student loan financing. They have programs available for both refinancing and in-school attendance. That includes custom designed loan programs for undergraduates, graduates, and MBA, medical and dental students.

Most programs will allow you to borrow the full cost of your education (or your total current student loan indebtedness), up to a maximum of $500,000. They also offer forbearance with most programs, and multiple payment options while you’re attending school. And with the exception of the Medical School Loan program, CommonBond charges no application, origination, or prepayment fees.

The only borrowers who may consider hesitating to apply with CommonBond are those with large amounts of federal student loans, who are understandably reluctant to give up the forbearance benefits that come with government loans.

If you’d like to consider alternatives to CommonBond, please see our guide, 10 Best Places to Refinance Student Loans.

If you’d like more information, or you’d like to refinance student loans, visit the CommonBond website.