CommonBond Student Loan Refinancing Review
Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice, and in 2017 he received the SABEW Best in Business Award.
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CommonBond is a private student loan lender that refinances existing student loans for college graduates and offers new student loans for eligible undergraduate and graduate students enrolled in degree programs. In this review, we’ll dive into CommonBond’s refinancing product. If you’re considering a new student loan, you can read our review of CommonBond’s private student loans here.
While private student loan refinancing isn’t right for everyone, CommonBond is a solid all-around option that is definitely worth considering if you’re thinking of refinancing your existing loans or using a private lender for your educational funding.
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Rating image, 4.0 out of 5 stars.
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Rates & Terms:
Fixed Rates: 3.89 - 8.07%
Variable Rates: 2.55 - 7.12%
Terms: 5, 7, 10, 15 and 20 years
- Competitive APRs: CommonBond offers some of the most competitive student loan refinancing rates around. Loan terms are five, seven, 10, 15, or 20 years.
- Forbearance options: Historically, one of the big drawbacks to private student loans as opposed to federal loans is the lack of flexibility when it comes to postponing repayment. CommonBond offers borrowers as much as 24 months of forbearance over the life of their loans, which can give borrowers peace of mind that their loans won’t fall into default if they run into tough financial times.
- No prepayment penalties: Borrowers can pay off their loans as fast as they want.
- No origination fees: Transparency is a big positive when dealing with lenders, and CommonBond’s pricing is about as transparent as it gets. There are no fees or additional costs associated with obtaining a refinancing loan.
- High limits: CommonBond allows borrowers to refinance as much as $500,000 in student loans, one of the highest limits in the industry.
- Autopay discount: Borrowers who enroll in autopay are eligible for a 0.25% interest rate reduction.
- Soft credit pull: Checking your rates with CommonBond won’t hurt your credit score.
What could be improved
- Graduates only: CommonBond’s refinancing loans are restricted to college graduates only. If you took out student loans and don’t have a degree to show for it, you can’t refinance with Commonbond.
- Late payment fee: There are some lenders that allow borrowers to miss a payment penalty-free, but CommonBond charges a 5% late payment fee, up to $10.
- Set term lengths: CommonBond offers student loans with a few set term lengths. Some of its competitors allow borrowers to customize a term length to a specific number of months in order to achieve the desired monthly payment.
Alternatives to consider
If you have federal student loans, it’s a good idea to determine if a Federal Direct Consolidation Loan is the better choice for you when it comes to refinancing. This could be the case even if you could get a lower interest rate through a private lender like CommonBond, which many high-credit borrowers can.
I say this because Federal Direct Consolidation Loans are eligible for federal loan forgiveness programs such as Public Service Loan Forgiveness and teacher loan forgiveness. They also qualify for income-driven repayment options like Pay As You Earn that allow lower-income borrowers to cap their payments at a certain percentage of their income.
It’s also important to mention that you should always evaluate a few loan options, even if you’re virtually certain that CommonBond is best for you. Many private student loan companies allow you to check your estimated APR without any effect to your credit score, so there’s really no good reason not to check at least one or two more to make sure you’re getting the best possible terms.
When to refinance with CommonBond
CommonBond can be an excellent option for student loan borrowers who have strong credit histories and have graduated from college or graduate school.
In general, CommonBond is a good option for borrowers who have private student loans to consolidate and/or have federal student loans but don’t anticipate needing income-driven repayment or qualifying for a federal loan forgiveness program.
CommonBond can also be a good choice for borrowers who want the flexibility to suspend payments in times of financial hardship, as the company’s forbearance program is one of the best in the private student loan industry.
How to apply
Prospective refinancers can check their APR and potential loan terms by filling out a quick pre-approval form on CommonBond’s website. CommonBond uses a soft credit check for pre-approvals, meaning that checking your rate won’t affect your credit score.
Once you’ve decided that CommonBond is right for you, you can continue with the application and upload your supporting documentation and electronically sign your loan documents. The exact documentation you’ll need may vary, but plan on showing proof of employment (or a job offer), proof of residency, and a recent statement for each of your existing student loans.
Once your loan is ready to be disbursed, CommonBond will use your loan proceeds to pay off your existing loans directly with your lender(s).