CommonBond Student Loans Review
CommonBond offers private student loans for current undergraduate and graduate students enrolled at least half time in a degree program. With competitive rates and flexible repayment options, CommonBond is a good option for students in need of a private loan.
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Rates & Terms:
Fixed Rates: 5.29 - 9.83%
Variable Rates: 3.95 - 9.81%
Terms: 5, 10, 15 years
CommonBond is a private student lender that originates new student loans and also offers refinancing for existing student loans. In this review, I’ll dive into CommonBond’s private student loans -- if you’re considering refinancing existing student loans, you'll want to check out their refinancing options separately as the rates and features vary.
Let’s take a closer look at the pros and cons of using CommonBond as your student lender, and how to apply if you’re interested.
Applying for new student loans with CommonBond
In addition to its refinancing product, CommonBond offers new student loans for current undergraduate and graduate students enrolled at least half time in a degree program. The company offers terms of five, 10, or 15 years and competitive interest rates that depend on the borrower’s (or cosigner’s) credit and other qualifications. The APR ranges vary based on whether you are an undergraduate or graduate student and your credit score, but CommonBond has competitive rates compared to the rest of the market.
Why you can trust me
I’m a Certified Financial Planner® who has published more than 4,500 articles on various personal finance and investment topics, and my work has been syndicated on news outlets such as MSN Money, USA Today, CNN Money, and more. In addition, I’m a student loan borrower who has extensive firsthand experience with the student loan borrowing, repayment, and refinancing processes.
What we like about CommonBond’s private student loans
Private student loans aren’t for everyone, and each lender has their own pros and cons. With that in mind, here are some things we like about CommonBond’s student loans.
- Competitive interest rates: CommonBond’s student loans have interest rates that are competitive with both private lenders and federal loans, especially if the borrower has a cosigner with exceptional credit.
- No prepayment penalties: Borrowers can pay off their loans as fast as they want.
- Cosigner release: While borrowers are required to have a cosigner to apply, the cosigner can be released from the loan after the borrower graduates and makes 24 consecutive monthly payments on the loan.
- Repayment choices: Students can decide whether to defer payments until after graduation, make a small ($25) monthly payment while in school, pay all of their interest while in school, or to begin repayment right away.
- Grace period: All of CommonBond’s repayment options come with a six-month grace period following graduation of the end of enrollment. Interest continues to accrue, but no payments are required.
- High borrowing limits: CommonBond allows you to borrow as much as 100% of the school’s cost of attendance, although the company encourages students to maximize scholarships, grants, and federal loan options first.
- Forbearance: Unlike many other private lenders, CommonBond has a forbearance option that can be used if borrowers fall upon tough times. Both undergraduate and graduate loans allow borrowers to postpone payments for up to 12 months over the life of their loan.
What could be improved and when alternatives could be better
No lender or loan is perfect for everyone, and CommonBond’s student loans are no exception. Here are some of the potential negative factors to keep in mind while you consider your options.
- Origination fee: CommonBond student loans have a 2% origination fee, while some competitors don’t. However, it’s important to mention that the origination fee is included in the stated APR of CommonBond’s loans.
- Cosigner required: Undergraduate and graduate students are required to apply with a cosigner who has acceptable credit. On the other hand, since federal student loans are government-guaranteed, cosigners aren’t required for student borrowers.
- Three term choices: CommonBond offers student loans in just three specific term lengths -- five years, 10 years, and 15 years. Some competitors offer longer terms, or the ability to choose more flexible repayment lengths.
- Federal loans could be better: Federal student loans have some key advantages over CommonBond’s offerings, and private student loans in general. To name a few, federal loans are eligible for forgiveness programs like public service loan forgiveness, as well as income-based repayment programs. However, federal student loans have more restrictive maximums, so they may not cover a student’s entire financial need all by themselves like private loans can.
How to apply for a CommonBond student loan
Students can apply for a CommonBond student loan on its website. You’ll need a cosigner before your application can be processed. In a nutshell, you (and your cosigner) will have to give some details about yourselves and agree to a credit check.
Once the loan is approved and you agree to your APR and sign loan documents, CommonBond sends the funds directly to your school.
Is a private student loan right for you?
When it comes to student loans, there are two main types to consider -- federal or private. And there are some big advantages to federal loans.
For starters, federal student loans are available to all eligible students, regardless of credit history. On the other hand, some private lenders require a cosigner for borrowers without an established credit history, and others require all student borrowers to have a cosigner. Federal student loans also have low, fixed interest rates for all borrowers, and private lenders are unlikely to beat them, especially for undergraduates.
Federal loans are also (sometimes) eligible to be subsidized, meaning that the federal government pays the interest while you’re in school or on a qualified deferment. This doesn’t exist in the private loan market. The same can be said about income-driven repayment plans that cap your monthly payment at a certain percentage of your disposable income, such as Pay As You Earn (PAYE).
Finally, in order to be eligible for certain loan forgiveness programs, such as Public Service Loan Forgiveness (PSLF), you need to have federal loans.
In fact, many private lenders go so far as to encourage potential borrowers to max out their federal borrowing options before applying for a private loan.
Having said that, there are some good reasons you may want to consider a private student loan. One big reason is borrowing limits. Federal student loans, especially for first- and second-year undergraduates, have borrowing limits that are unlikely to cover a student’s entire cost of attending college. On the other hand, private student loans can typically be made up to a particular school’s entire cost of attendance. For this reason, the most common use of private student loans is to fill in the funding gap between a student’s financial need and what they can borrow from federal loan programs.
What we like best about CommonBond's private student loans is their competitive rates for undergrad and graduate students, as well as their high borrowing limits. If you're looking for a private student loan lender who can cover the difference between what your federal student loans will cover and the total cost, CommonBond is a good option for you.