CommonBond Student Loans Review: Are They Right For You?

CommonBond Student Loans Review: Are They Right For You?

CommonBond stands out among its competitors by offering low refinancing rates and flexible repayment plans. Although it is best known for refinancing, borrowers can apply for competitive undergraduate, graduate and MBA student loans with the lender, as well.

Good for

  • Low refinancing rates.
  • Multiple student loan repayment plans.
  • Refinancing Parent PLUS student loans in your child's name.

Bad for

  • Not available to borrowers in Idaho, Louisiana, Mississippi, Nevada and Vermont.
  • Student loan borrowers without a co-signer.
  • Refinancing borrowers that have less than a four-year degree or are unemployed.

Editor's Rating

4.0/5.0

Refinancing or obtaining a student loan with CommonBond is a great option if all you're interested in is low rates and have an excellent credit score. However, be aware CommonBond does not lend to borrowers in certain states and requires that undergraduate and graduate student loan borrowers have a co-signer to qualify.

CommonBond Student Loan Refinancing Review

CommonBond is best for borrowers with excellent credit scores who want the lowest rates possible. The lender offers some of the lowest rates we've seen for people with stellar credit. However, if you're looking for more features beyond low rates, such as special programs for medical school or post-graduate help, CommonBond fails to deliver. One feature often advertised by CommonBond is that it allows student loan holders to combine fixed-rate and variable-rate loans through its hybrid program, which claims to have more manageable monthly loan payments and reduce interest paid over the life of the loan. However, there is no way to ensure what the variable rate will be after five years making this a risky option. You may end up paying more compared to a regular fixed-rate loan.

Other drawbacks to using CommonBond include that it doesn't lend to borrowers in certain states or those with less than a four-year degree from a Title IV school. On top of this, lenders like Laurel Road and SoFi offer extra value with programs for medical residents and unemployed borrowers, while CommonBond does not provide either. Although, similar to Laurel Road, students are able to refinance their parents' PLUS loans in their own names, taking the financial burden off their parents with potentially lower interest rates.

CommonBond Student Loans Review

Although CommonBond's student loan program is pretty new, it has already started to make a name for itself in private student lending with competitive rates and multiple repayment plans. Most private lenders only offer in-school and deferment for student loan repayment, while CommonBond also provides an interest-only and fixed payment options for borrowers that want to start paying off their loan in school but can't afford full monthly payments.

Unless you can qualify for low rates, CommonBond may not be cheapest option as it has a 2 percent origination fee for its student loans. Other lenders such as Citizens Bank and Discover don't require origination fees while still offering low rates. Also, undergraduate and graduate students that don't have a co-signer won't even qualify for a loan with CommonBond. The lender requires borrowers to have a co-signer for its undergraduate and graduate loans, as many students don't have enough credit history to qualify.

CommonBond Student Loans Rates, Terms and Fees

Borrowers that took out student loans and parent PLUS loans from the federal government and other private loan companies can choose from fixed-rate, variable-rate and a mix of both, with a loan cap of $500,000. The hybrid rate only allows a loan term of 10 years, in which you have a fixed rate for five years and then a variable rate for the remaining five years. And like most lenders, CommonBond offers a 0.25 percent discount on rates when you sign up for automatic payments, as well as a $200 referral bonus.

Private Refinance Loan Features

Loan typeRefinance
Loan amount range$5,000 - $500,000
APR range*
  • 3.20% - 7.75% Fixed rate
  • 2.72% - 7.25% Variable rate
Fees
  • Late fee: $10 after 10 days
  • Prepayment penalty: none
  • Application fee: none
Loan terms
  • 5 - 20 years (10 years for hybrid)
Discounts$200 referral bonus

*Rates include 0.25% rate discount with auto-pay

Although it is not as well-known, CommonBond provides borrowers with three types of student loans: undergraduate, graduate and MBA loans. CommonBond offers some of the lowest rates for these loan types, but it may not be the best option, as undergraduate and graduate loans require a co-signer, no matter what credit score they have.

Undergraduate Student Loan Features

Loan typePrivate student loan
Loan amount range$5,000 up to 100% school-certified expenses
APR range*
  • 5.30% - 9.82% Fixed rate
  • 3.72% - 9.68% Variable rate
Fees
  • Late fee: $10 after 10 days
  • Origination Fee: 2%
  • Prepayment penalty: none
  • Application fee: none
Loan terms
  • 5, 10 or 15 years
Discounts$200 referral bonus

*Rates include 0.25% rate discount with auto-pay

Repayment Plans

In terms of repayment for refinancing, CommonBond is quite standard, with payment starting around 30 days after the loan is disbursed. You can enroll for automatic payments on your CommonBond account to receive the 0.25 percent discount on your rate. And CommonBond allows you to pay more than the monthly payment amount without any penalty, if you'd like to pay off your loan early.

For student loan borrowers, CommonBond offers repayment flexibility by offering four different plans for undergraduate and graduate borrowers: in-school, interest-only, fixed monthly payment and deferred repayment. MBA students don't have the option of a fixed monthly payment but can choose from the other three options. Several lenders only allow in-school and deferred repayment, making CommonBond a better option for borrowers that can't afford full repayment in school but want to start putting money toward their loans before graduating.

Full Monthly Payment Option:

In-school repayment is generally the cheapest option since you start making full principal and interest payments as soon as your loan is disbursed. It is important to note that although this repayment plan allows you to save the most money, the majority of students can't afford to start paying off their student loans while going through school.

Interest-Only Payment Option:

The interest-only payment option is best for borrowers who cannot afford full repayment on their student loans but want to start paying off the interest that will accrue while in school. Borrowers that opt to defer repayment until after school will have to to pay all the interest added during school and after, which can be a huge financial burden even with a six-month deferment period.

Fixed Monthly Payment:

Borrowers can also opt to pay a nominal fixed payment of $25 while in school if they aren't sure about whether they can contribute full interest payments to their loans. Keeping a fixed monthly payment helps borrowers have less interest outstanding upon leaving school. And any unpaid interest not covered will capitalize at the end of the fixed monthly payment period.

Deferment Option:

The last repayment plan offered by CommonBond is to defer payments until after graduation or termination of enrollment. Borrowers are given a six-month grace period before payments are due, giving them time to prepare to pay off the loans. Deferring repayment is the most expensive option for borrowers as interest accrues both in school and after which is applied to the total loan balance.

Deferment and Forbearance

CommonBond borrowers are provided with industry-standard deferment and forbearance options. Like with most lenders, student loan borrowers are offered a grace period of six months after graduating or leaving school before they must start paying off their student loans. If you were to need an extra year in school or go to graduate school, you can defer payment for up to five years.

Permitted DefermentsLimit
Grace period upon leaving school6 months
In-school or entering graduate school5 years

CommonBond allows student loan and refinancing borrowers who are experiencing financial hardships to postpone payments three months at a time for up to 24 months over the life of the loan. The lender works to help those that are having trouble paying off their loans and will attempt to come up with a solution if you are unable to pay even after the forbearance period.

ForbearanceLimit
Permitted PeriodUp to 24 months
Conditions
  • Must be experiencing financial hardship, unemployment, excessive debt burden or medical disability.

Who Can Qualify for CommonBond Refinancing?

CommonBond refinancing is available to borrowers with credit scores of 660 or more, otherwise they will need a co-signer to qualify for refinancing. Those who want to take out an undergraduate or graduate student loan are required to use a co-signer, no matter what credit score they have as many students may not have enough credit history to qualify.

Credit score660 or higher
Co-signerYes, release permitted after 36 on-time payments
Accepted citizenship status
  • U.S. citizen
  • Permanent resident
DegreeBachelor's or higher
EmployedYes or signed job offer
Eligible schoolsAll four-year, Title IV public and private institutions

How Does CommonBond Compare to Other Student Lenders?

CommonBond does not refinance loans for borrowers without at least a four-year degree from a Title IV institution, while both SoFi and Earnest will refinance loans for borrowers with an associate's degree. And although SoFi may have higher APRs than CommonBond, the lender offers extra employment and forbearance guidance to help borrowers facing financial difficulties.

CommonBondSoFiEarnest
Loan types offered
  • Student loan refinance
  • Private Student Loan
  • Student loan refinance
  • Medical residency refinance
  • Student loan refinance
APR range
  • 3.20% - 7.75% Fixed
  • 2.72% - 7.25% Variable
  • 3.90% - 8.05% Fixed
  • 2.47% - 7.24% Variable
  • 3.89% - 6.32% Fixed
  • 2.47% - 5.87% Variable
Loan amount$5,000 - $500,000$5,000 up to 100% school-certified expenses$5,000 - $500,000
SchoolHold a four-year or graduate degree from any Title IV institutionHold a two-year or higher degree from any Title IV institutionHold a degree from any Title IV institution
EmployedYes or signed job offerYes or signed job offerYes or signed job offer
Co-signerYes, release permitted after 36 on-time paymentsYes, release not permittedNot permitted
Discounts
  • $200 referral bonus
  • $300 referral bonus

*Rates include 0.25% rate discount with auto-pay

CommonBond vs. SoFi

SoFi will be a better option for borrowers looking to refinance in Idaho, Louisiana, Mississippi, Nevada and Vermont as well, as those with less than a bachelor's degree from a Title IV institution, as CommonBond doesn't refinance loans for these borrower types. The lender provides more value by offering job placement services with career coaches and networking opportunities to help borrowers find employment, if needed. CommonBond does have a better APR range and allows co-signers to be released from the loan, unlike SoFi, but if you don't qualify for a low rate, SoFi offers more value for refinancing borrowers.

CommonBond vs. Earnest

CommonBond is the better refinancing option for most borrowers as Earnest is more difficult to qualify for because it doesn't allow borrowers to use a co-signer. Earnest makes the most sense for borrowers that have less than a four-year degree and have enough financial history to qualify for its low rates. The lender looks at more than just your credit to determine eligibility for its loans, including earning potential and savings patterns. Otherwise, CommonBond is a better option as it allows borrowers to use co-signers to qualify and still has similar rates to Earnest. Earnest is also not available in Alabama, Delaware, Kentucky, Nevada and Rhode Island but can lend to borrowers in the states that CommonBond doesn't cover.

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