There are three main guidelines that CommonBond aims to follow when providing financial services: be simple, affordable, and transparent. Founded in 2011, CommonBond is still relatively new compared to some of its peers, but the founders were on a mission to tackle the largest concern facing students across the country - the student loan debt crisis.
Not surprisingly, the founders came armed with a wealth of knowledge about commerce, finance, and their own personal student loan experiences. CommonBond provides two different services to students: education loans and refinancing.
Student Loan Options Through CommonBond
CommonBond student loan options cover a broad range of students from the start to the end of the education cycle. While CommonBond offers some smart incentives when compared with other private lenders, it should be noted that nearly all loans provided by CommonBond require a cosigner. This means students need someone else to take responsibility for the loan if they are not able to meet payments. All the student loan offerings also have a two percent origination fee.
Graduate and Undergraduate Student Loans
Students must be currently enrolled (or will be enrolled) in a part-time or full-time program to be eligible for a CommonBond student loan. They only provide loans for post-secondary programs at Title IV or not-for-profit schools and they strive to minimize the amount loaned to be exactly the amount required, no less and no more.
If a borrower has a cosigner, CommonBond has a program to release the cosigner from responsibility after two years of consistent repayment. They offer three interest rate types: fixed, variable, and hybrid with five, ten, or fifteen-year terms.
A full breakdown of specific interest rates, including estimated monthly payments and annual percentage rates for all the options, is available at CommonBond’s website. It is also important that keep in mind that interest rates found through private companies are nearly always higher than what is found with federal loans.
MBA Student Loans
Students about to enter an MBA program may have the option to apply for the CommonBond MBA Student Loan which covers post-secondary education at 29 programs nationwide.
Much of the eligibility mimics that of the more general student loan, however there are a few specific features which set it apart. Loans are still calculated by financial need (costs for attendance minus any federal aid money or scholarships), and students must be either a U.S. citizen or a permanent resident. The primary differentiating feature is that MBA Student loans do not typically require a cosigner.
Refinancing Options with CommonBond
On top of their student loan options, CommonBond also focuses on helping people refinance their student loans to simplify their debt and reduce costs. This includes both undergraduate and graduate loans as well as Federal Parent PLUS loans. For those thinking of refinancing their federal student loans it’s important to realize that federal debt becomes private if refinanced through a private company such as CommonBond. Private loans have fewer protections to the borrower than federal loans can offer.
General Student Loan Refinancing
CommonBond provides refinancing for up $500,000 to U.S. citizens and permanent residents who attended a Title IV school. They focus on both federal and privately held debts to refinance them into a new all-encompassing loan. CommonBond will also refinance previously consolidated debts. More information on their specific interest rates can be found on their website.
Unlike loans that are consolidated through federal organizations, the new interest rate at CommonBond is not calculated from previous loan rates. Instead, they take the credit score and history of the borrower into consideration, meaning they can often offer lower interest rates.
The loan origination fee of two percent is always waived for refinancing. Importantly, for those who experience financial difficulties post-graduation, CommonBond offers a longer-term forbearance period than most others in the industry - up to 24 months.
Parent PLUS Student Loan Refinancing
When parents apply for Parent PLUS federal student loans, to help their children with tuition, they might not know there are few options available for transfer after the fact. Thankfully, CommonBond is one of the few lenders which offer refinancing for Parent PLUS student loans. This option removes the parent from financial liability and places the child as the sole borrower.
Many of the characteristics of this refinancing option overlap with the more general refinancing options. This includes the way CommonBond calculates interest rates, the general eligibility requirements, and the maximum allowable amount limit of $500,000.
The child must also have graduated from an approved Title IV post-secondary school and be either a U.S. citizen or permanent resident.
General Application Requirements
In order to qualify for either option, students need to meet the credit score requirements which follow industry standards. For the student loan offerings, CommonBond requires a minimum credit score of 660 and applicants need to be currently enrolled (or soon to be enrolled) in postsecondary education. Unlike other organizations, students do not need to have proof of income.
CommonBond's refinancing services have slightly higher requirements, at least in practice. Minimum requirements are stated as a 660 credit score and no minimum income, but applicants need to have at least a Bachelor's degree under their belt. Actual approval for refinancing seems to lean a bit higher than their stated minimums, as typical approvals come with a 750 credit score and a $105,000 yearly median income.
The application process is simple and easily made through an online portal with the eligibility requirements clearly laid out. To apply, students will need a government-issued ID, social security number, costs of enrollment for their educational institution, and an estimate of any other financial aid that may come into play.