CommonBond Student Loans 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 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.
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Rating image, 4.0 out of 5 stars.
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Rates & Terms:
Fixed Rates: 5.29 - 9.83%
Variable Rates: 3.95 - 9.81%
Terms: 5, 10, 15 years
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.
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
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
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.
CommonBond is right for you if:
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.