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CommonBond student loan refinancing review
Last updated:
Trade in your existing school loans starting with 2.5% to 6.85% APR with autopay.
finder.com’s rating: 4.4 / 5.0
★★★★★
- Best for graduates and parent borrowers looking for competitive rates.
- Pick something else if you want flexible repayment options.
2.5% to 6.85% With autopay
APR
$500,000
Max. Loan Amount
660
Min. Credit Score
Details
| Product Name | CommonBond Student Loan Refinancing |
|---|---|
| Minimum Loan Amount | $5,000 |
| Max. Loan Amount | $500,000 |
| APR | 2.5% to 6.85% With autopay |
| Interest Rate Type | Variable |
| Fixed rate | 2.59% to 6.74% |
| Minimum Loan Term | 5 years |
| Maximum Loan Term | 20 years |
| Requirements | US citizen or permanent resident, graduated from an eligible title IV school or program. |
Review by
Anna Serio
anna.serio@finder.comAnna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 1,000 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
Expert review
CommonBond refinancing is ideal for professionals and parent borrowers who want to save on their student loans. Its hybrid interest rates are attractive, but you’ll need to have some cushion to fall back on if they unexpectedly skyrocket. However, Commonbond offers up to 24 months of forbearance if you’re unable to afford repayments. Plus, you can get a 0.25% rate discount if you sign up for automatic repayments, plus another $200 if you refer a friend.
Borrowers new to the workforce might want to wait before applying — its lack of repayment plan options means you could be at risk of forbearance or defaulting if you can’t afford standard monthly repayments. And if you never finished your degree, you’ll need to look elsewhere — you won’t qualify.
Not sure about Commonbond? Check out our list of other student loan refinancing providers that might be a better fit for you.
First, am I eligible?
To be eligible for CommonBond student loan refinancing, you must:
- Have a credit score of 660 or higher.
- Be a US citizen or permanent resident.
- Live in an eligible state.
- Have a degree from an eligible school.
CommonBond also looks at factors like your debt-to-income ratio and personal cash flow to determine eligibility and rates.
State eligibility
Residents of Idaho, Mississippi, Nevada and Vermont aren’t eligible for CommonBond student loan refinancing.
How does refinancing with CommonBond work?
CommonBond is an online lender that specializes in education-related financing, including student loan refinancing. How it works is simple: You take out a new loan with more favorable rates to pay off your current student loans. You can typically change your loan term, potentially qualify for lower interest and take advantage of CommonBond’s perks.
It offers between $5,000 and $500,000 in student loan refinancing with the option of fixed, variable or hybrid rates. CommonBond doesn’t charge fees for applying or paying off your loan early, and its loan terms range from 60% to 240% for variable and fixed-rate loans and 10 years for its hybrid-rate option.
What happens if I refinance my federal loans with CommonBond?
Refinancing your federal student loans with CommonBond is possible, but the benefits might not outweigh the costs. That’s because federal student loans come with repayment plans and perks that you just won’t find with a private lender. These include forgiveness programs, graduated and income-based repayments and extensive forbearance and deferment options.
How much will I pay to refinance?
Generally, nothing. In fact, borrowers save an average of $24,046 by refinancing their student debt with CommonBond.
That’s mostly because CommonBond doesn’t charge fees to apply or receive your funds. It also won’t charge a penalty if you’re able to pay off your debt earlier. It charges only a late fee of $10 after a 10-day grace period and a returned funds fee of $5.
How much your loan costs is a different matter. CommonBond offers three different rate options: fixed, variable and hybrid.
Fixed rates
If you go for a fixed-rate loan, your APR of 3.46% to 8.24% with autopay stays the same over the life of the loan. Your monthly repayments won’t change, making it easier to calculate your budget. And you can choose between 5, 7, 10, 15 or 20 years to pay off your debt.
While this option is safer, you might not be able to save as much as you could with a variable- or hybrid-rate loan.
Variable rates
Your APR of 2.5% to 6.85% with autopay changes monthly with a variable-rate loan. But you might end up saving even more money over the fixed-rate option.
Your payments are more difficult to predict, however, because your interest changes. With a variable rate, you also have a choice of 5, 7, 10, 15 or 20 years to pay off your loan.
To calculate your variable rate, CommonBond adds between 0.9% and 5.43% to a benchmark rate — one that’s set by international banks and reflects trends in interest rates that major banks charge. CommonBond users qualify for a “margin” or smaller range of rates within its larger variable rate range — say, between 3.14% to 4.15% — which it adds to the one-month LIBOR rate, a benchmark that changes monthly.
To protect you against major flukes in the lending market, CommonBond won’t charge you more than 8.99% to 9.99% in interest.
Hybrid rates
CommonBond offers a unique third option that combines both fixed and variable rates between 4.52% and 7.57% with autopay. It lets you take advantage of the benefits of fixed rates — stability — with the perks of variable rates — more potential savings.
When it comes to loan terms, however, your options are limited. You only have 10 years to pay off your debt — five years of fixed rates followed by five years of variable rates.
CommonBond calculates its variable rates by adding between 2.64% and 4.68% to the one-month LIBOR rate. It caps its hybrid variable rates at 9.99%.
Does CommonBond offer any discounts?
Yes. Its advertised rates reflect a 0.25% autopay discount, and it offers a referral program.
Through the program, borrowers can earn $200 simply by giving a friend a unique link to use when taking out a CommonBond student loan or refinancing their debt. You’ll need a PayPal account to participate in the referral program, and your friend must be accepted to qualify.
What are my repayment options?
CommonBond offers your standard repayment plan, where repayments change based on fluctuations in your interest rate. It doesn’t offer the graduated or income-based repayment plans that you’ll find with federal loans and some other lenders.
However, CommonBond does offer forbearance, which puts a pause on your repayments while your interest continues to add up. It grants forbearance case by case. Reach out to the CommonBond team if you think you’re in danger of being regularly late or missing repayments.
Top reasons to consider refinancing with CommonBond
- Competitive rates. CommonBond’s refinancing rates are lower than the current federal loan rates, which range from 4.53% to 7.08%, depending on your loan type.
- Forbearance. You can pause your loan repayments for up to 24 months if you face a temporary financial setback.
- Parent loans can qualify. CommonBond is one of a handful of lenders that’s willing to refinance Parent PLUS loans.
- Offers hybrid rates. Reap the benefits of both variable and fixed interest rates by going for a combination of the two.
- Discounts. CommonBond offers a 0.25% discount on its interest rates to anyone who signs up for automatic repayments. You can also earn $200 by referring a friend to CommonBond.
- Cosigner release. You can apply to take your cosigner off your loan after making 36 on-time repayments in a row.
- Social promise. While CommonBond is a for-profit company, you might like its mission to put a portion of your interest toward something other than board member pockets.
Why you might want to look elsewhere
- Standard repayments only. You won’t have access to income-based or graduated repayment plans that the federal government and some other private lenders offer.
- Limited geographical reach. You’re not eligible for CommonBond student loan refinancing if you live in Idaho, Mississippi, Nevada or Vermont.
- You need a degree to qualify. In other words, you’re ineligible for student loan refinancing on student debt from a degree or program you never finished.
- Not all programs are eligible. There’s a small chance that your school isn’t on its list of its more than 2,000 eligible schools. Contact CommonBond to ask them to consider adding your school, but you might not have much luck if it’s not Title IV.
Compare more student loan refinancing providers
What customers say about CommonBond
There isn’t a lot of customer comments online about CommonBond student loan refinancing. As of August 2018, it earns an A- from the Better Business Bureau (BBB), which doesn’t accredit the company. BBB ratings are based on business practices like transparency and how it handles customer complaints. It has no customer reviews on the BBB site or on Trustpilot.
Customers are chattier in forums, giving it mixed reviews. One customer was unhappy with how long the application process took but pleased with the quality of customer service. Another reported they qualified for more competitive rates with another lender. A third was rejected because their credit score was too low.
What to expect when signing up
CommonBond’s application is simple and takes only a few minutes to complete. You’re likely eligible if:
- You have a credit score of 660 or higher.
- You’re a US citizen or permanent resident.
- You don’t live in Idaho, Mississippi, Nevada or Vermont.
- You graduated from an eligible program.
CommonBond doesn’t offer a list of eligible programs online, but you can find out if yours makes the cut when you fill out the application. If your school is eligible, it should appear where requested as you type. If it’s not, reach out to CommonBond to see if it’s willing to add your school to its list of eligible programs.
For an easier process, have the following documents on hand:
- Proof of employment. An offer from a future employer, two recent pay stubs or two years of tax returns will do.
- A statement from each loan you want to refinance. It must have your servicer’s or lender’s name, your name, your account number, your loan balance and a physical address that CommonBond can use to make a payment.
- Proof of residence. CommonBond generally asks to see a utility bill or bank statement showing you live in an eligible state.
Complete your application in 7 easy steps
- Go to CommonBond’s website and click Refinance in the top navigation bar.
- Click Find My Rate.
- Enter your personal information, how much you want to refinance and your annual income. Read and check the disclosure box. Then click Get My Rate.
- Wait as CommonBond conducts a soft credit pull of your credit.
- CommonBond approves you for rates on your own, requires you to apply with a cosigner or tells you that you aren’t qualified. If you’re approved but want a cosigner to improve your rates, contact a representative to add them to your application.
- Select the loan you’d like to apply for and upload any additional documents that CommonBond requires. At this point, CommonBond reviews your documents and conducts a hard credit check, which causes your credit score to dip temporarily. This typically takes between three and four days.
- Review and sign your final loan documents.
CommonBond disburses your funds directly to your current student loan providers, so you don’t have to worry about paying off your loans yourself.
Step-by step application with screenshots
Who is CommonBond’s servicer?
CommonBond uses student loan servicer FirstMark to handle its repayments. This means that you should direct all questions about repayments and forbearance requests there, not to CommonBond. You can learn more about it works by reading our review of FirstMark.
More about CommonBond
CommonBond is not only a student loan provider, but also a leading international charitable organization in education. Through its social promise programs, CommonBond puts a part of its profits toward the tuition of students in need and builds schools to give children access to education across the world.
CommonBond’s Pencils of Promise programs have donated more than $1 million to underserved students and built more than 470 schools across Ghana, Laos, Guatemala and Nicaragua. It also provides technology and supplies to these students, as well as helps cover teacher salaries.
Want to compare other lenders? Check out our guide to student loan refinancing.
Frequently asked questions
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Image source: shutterstock and commonbond.co
