CommonBond Student Loan Refinancing Review 2021: Is it Worth it?

Refinancing your student loans is one way a person can potentially speed up his/her debt payoff. With CommonBond Student Loan, you can take out a new loan (with a lower interest rate) to pay off the old ones.

CommonBond Student Loan Refinancing

CommonBond has one of the better reputations of the many student loan refinance companies. Over the years, we have seen approval rates with CommonBond fluctuate, but for the most part, CommonBond usually offers excellent interest rates with better than average approval numbers.

CommonBond

Founded in 2012, CommonBond has funded more than $2 billion in student loans. The lender offers undergraduate, graduate, MBA and student loan refinance loans.

Additionally, CommonBond offers student loan refinancing to graduates and their parents with Parent PLUS loans. However, rates at CommonBond tend to run a bit higher than the best lenders.

Regardless, CommonBond continues to make it onto the list of Best Places To Refinance Your Student Loans. They are also one of just three lenders we recommend for finding the best student loans.

CommonBond Student Loan Refinancing Pros & Cons

Pros

  • Competitively low interest rates
  • No origination fees, application fee, or prepayment penalty
  • Different rate options available
  • Co-signer allowed

Cons

  • Loans only available for the purpose of refinancing student loans
  • Requires credit score of at least 660

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.

Different Refinancing Options Available

CommonBond allows you to refinance up to $500,000 in student loan debt. There are three loans to choose from:

  • Variable-rate loan
  • Fixed-rate loan
  • Hybrid rate loan

All three loan options require you to have a minimum loan balance of $5,000 to refinance. But, there are some important differences you need to understand.

Variable Rate Loans

Generally, a variable rate loan is a loan whose interest rate is tied to an index. When the index goes up or down, the variable rate moves up or down with it.

The upside of a variable rate loan is that you might pay less in interest than a fixed rate loan if the index rate stays low. The downside is that you could end up paying more if rates rise.

CommonBond’s variable rate loans are available with terms of 5, 7, 10, 15 or 20 years. Compared to the other two refinance loans CommonBond offers, you could pay the lowest rate overall with a variable rate loan.

But, that assumes that rates stay low and that you qualify for the best rates, based on your credit score.

Fixed-Rate Loans

A fixed rate loan is just what it sounds like: the rate is fixed, which means it stays the same for the life of the loan. The main advantage of a fixed-rate loan is predictability.

You always know what your rate is going to be, which means you can calculate upfront how much interest you’ll pay. And with a fixed rate loan, your payment won’t change the way it could with a variable rate loan.

That kind of knowledge is a trade-off, however, since you might end up paying more in interest with a fixed rate loan over the long-term.

CommonBond offers competitive rates for their fixed-rate loans but the APR range is slightly higher than their variable rate loans. The loan terms are the same, at 5, 7, 10, 15 or 20 years.

Hybrid Rate Loans

CommonBond’s hybrid rate loan is a unique refinance alternative. This loan has just one term option of 10 years, but you get the best benefits of both fixed and variable rate loans.

With this loan, you pay a fixed rate for five years and a variable rate for five years. The highest APR you could potentially pay is still lower than the highest rate you could get with a variable or fixed rate loan.

The advantage with these loans is they offer a way to minimize your payment, interest rate and the total amount of interest paid. The downside to consider, however, is that you’ll only get 10 years to pay off your loan.

That means your monthly payments would be higher than they would with a 15 or 20-year term.

You’d have to consider how a 10-year repayment term would work for your budget. If you’re just out of school and starting your career, a smaller payment might be easier to work with until your income starts growing.

If you’ve been paying on your loans for a couple of years already, however, you might be able to swing the payments required for a 10-year term.

CommonBond Refinance Rates, Terms, and Options

CommonBond Overview
Loan Terms 5, 7, 10, 15, and 20 Years
Variable Rate Loans 0.81% – 4.89%
Fixed-Rate Loans 3.12% – 6.15%
Minimum Refinance Amount $5,000
New Borrower Bonus $150

CommonBond will refinance private loans as well as a wide range of federal loans, including Parent PLUS loans.

CommonBond does not charge any loan origination fees or prepayment penalties, and their loans are serviced by FirstMark. When CommonBond checks borrower credit reports, they use TransUnion.

Because CommonBond rate offerings are reasonable for most loan types, borrowers will have some flexibility with loan duration.

The 20-year loans will certainly have higher interest rates than the short-term loans, but when jumping from one loan increment to the next, the interest rate jump usually isn’t very severe.

As a result, a borrower can opt for a 15-year loan instead of a 10-year loan to get lower monthly payments without facing a dramatic interest rate increase.

Repayment options for CommonBond student loans include:

  • Full principal and interest payments while in school
  • Interest-only payments while in school
  • Flat $25 monthly payments while in school
  • Deferred payment with no in-school payments required

Forbearance of up to 12 months for three months at a time is available with CommonBond student loans. Deferment due to financial hardship falls under the forbearance policy.

If the student dies or is permanently disabled and there is no co-signer, the loan will be discharged. It will be passed on if there’s a co-signer.

CommonBond has an A- rating with the Better Business Bureau. In 2018, the Consumer Financial Protection Bureau received six complaints about CommonBond student loans.

Who Can Qualify for CommonBond Refinancing?

CommonBond refinancing is available to borrowers with credit scores of 660 or more, otherwise they will need a co-signer to qualify for refinancing.

Those who want to take out an undergraduate or graduate student loan are required to use a co-signer, no matter what credit score they have as many students may not have enough credit history to qualify.

Credit score 660 or higher
Co-signer Yes, release permitted after 36 on-time payments
Accepted citizenship status
  • U.S. citizen
  • Permanent resident
Degree Bachelor’s or higher
Employed Yes or signed job offer
Eligible schools All four-year, Title IV public and private institutions

How Does CommonBond Compare to Other Student Lenders?

CommonBond does not refinance loans for borrowers without at least a four-year degree from a Title IV institution, while both SoFi and Earnest will refinance loans for borrowers with an associate’s degree.

And although SoFi may have higher APRs than CommonBond, the lender offers extra employment and forbearance guidance to help borrowers facing financial difficulties.

CommonBond SoFi Earnest
Loan types offered
  • Student loan refinance
  • Private Student Loan
  • Student loan refinance
  • Medical residency refinance
  • Student loan refinance
APR range*
  • 3.21% – 6.45% Fixed
  • 1.76% – 6.24% Variable
  • 4.25% – 8.774% Fixed
  • 3.5% – 8.70% Variable
  • 4.25% – 8.77% Fixed
  • 3.5% – 8.72% Variable
Loan amount $5,000 – $500,000 5,000 up to 100% school-certified expenses $5,000 – $500,000
School Hold a four-year or graduate degree from any Title IV institution Has a two-year or higher degree from any Title IV institution Hold a degree from any Title IV institution
Employed Yes or signed job offer Yes or signed job offer Signed job offer or yes
Co-signer Yes, release permitted after 36 on-time payments Yes, release not permitted Not permitted
Discounts
  • $200 referral bonus
  • $300 referral bonus

*Rates include 0.25% rate discount with auto-pay

FAQs

1. How do I enroll in autopsy?

After CommonBond pays off your lenders, log in to your online account and complete an ACH enrollment form. If you run into problems, reach out to customer service.

2. Can I pay off my hybrid-rate loan before the rate changes to variable?

Yes. And you can pay off any CommonBond loan without penalty to save on unnecessary interest.

3. Can Student debt be forgiven?

Yes, if you have federal loans and you enroll in an eligible forgiveness program. If you enroll in CommonBond, however, you’re no longer eligible for federal forgiveness.

Bottom Line

While CommonBond offers competitive interest rates and flexible repayment terms on both student loans and student loan refinancing, it’s important to compare the actual rates you can qualify for with multiple lenders before choosing a lender.

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