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finder.com’s rating: 4.4 / 5.0
★★★★★
2.14% to 8.01% With autopay
APR
$500,000
Max. Loan Amount
660
Min. Credit Score
Product Name | CommonBond Student Loan Refinancing |
---|---|
Minimum Loan Amount | $5,000 |
Max. Loan Amount | $500,000 |
APR | 2.14% to 8.01% With autopay |
Interest Rate Type | Variable |
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 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.
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.
To be eligible for CommonBond student loan refinancing, you must:
CommonBond also looks at factors like your debt-to-income ratio and personal cash flow to determine eligibility and rates.
Residents of Idaho, Mississippi, Nevada and Vermont aren’t eligible for CommonBond student loan refinancing.
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.
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.
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.
Your APR of 2.14% to 8.01% 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.
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%.
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.
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.
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:
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:
CommonBond disburses your funds directly to your current student loan providers, so you don’t have to worry about paying off your loans yourself.
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.
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.
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We rate student loan providers on a scale of 1 to 5 stars based on factors like transparency, costs and customer experience. We don’t take into account elements like eligibility criteria, state availability or payment frequency — we save that for our reviews.
Image source: shutterstock and commonbond.co