Updated March 5, 2019

CommonBond Review: Is It Legit?

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CommonBond offers competitive rates for student loan refinance along with a strong social mission. Is it right for you? See the pros and cons.

CommonBond
Refinance Student Loans

Overall Score

4.5

Customer Service

3.5

Loan Term

5.0

Ease of Use

4.5

Interest Rates

4.5

Payment Flexibility

5.0
5-point scale (the higher, the better)

Pros and Cons

  • Hybrid program
  • Quick process - once approved funds will pay your loans within 2 weeks
  • Your state eligibility may restrict options
  • Long process to approval

Bottom Line

Good if you want to switch between variable and fixed rates

If you're looking for a way to get rid of student loans faster, refinancing your loan with CommonBond may get you a better rate. But would that be a smart move?

CommonBond is one of many fairly new companies out there offering to refinance student loans.

It looks beyond your credit history when determining approval. It also considers other factors, like whether your career is on the right track and how you handle your money.

If they like what they see, they could offer you a lower interest rate on your student debt — which can save you good money in the long run and make your monthly payments more manageable.

To find out what rate you qualify for, click here. It might be better than the one you're currently getting.

CommonBond also stands out with their social promise to provide education for children in need.

Is it right for you? Read on for the pros and cons.

CommonBond at a glance:

  • Terms of 5, 7, 10, 15, or 20 years
  • Fixed, variable, or hybrid rates
  • No origination fee or prepayment penalty
  • Refinance federal, private, previously consolidated loans, and Parent PLUS loans

REASONS TO USE COMMONBOND

© aleca_99 (CC BY 2.0) via Flickr

  • Potentially big savings. You can save a lot if you qualify for a lower interest rate. According to the company website, the average savings is around $14,000.

  • More well-rounded review process. CommonBond doesn't see borrowers as just a credit score. They also look at other factors beyond that three-digit number. You'll still need good credit to qualify, but it's not the only way CommonBond is going to judge you.

  • Flexible options. CommonBond offers three rate choices for refinancing: fixed, variable, and hybrid. Fixed rates are higher but good if you want predictability. Variable rates are lower, but it's a risk as it can go up according to market changes.

    The hybrid rate is a unique option. This loan has a 10-year term and gives you a fixed rate for the first 5 years and a variable rate for the last 5. The rate is lower than the typical 10-year fixed rate, so it's good if you think you can prepay.

    Compare with other lenders. Shop around with different lenders to see who gives you the best rate. You can get multiple rate quotes with no obligation. Check out some of those top student loan refinance lenders.

  • No hidden fees. CommonBond does not charge an origination fee or application fee.

  • No prepayment penalty. There is no penalty for paying off your loan early if you decide to pay more than the monthly payment and wipe the debt out at warp speed.

  • 0.25% discount. When you enroll in auto-pay, you'll receive a 0.25% discount off your rate.

  • Forbearance and deferment options. If you run into economic hardship and can't make payments anymore, you don't need to panic. CommonBond offers up to 24 months of forbearance over the life of the loan.

    CommonBond also offers academic deferment for borrowers going back to school.

  • Refinance up to $500,000. Altogether, you can refinance up to $500,000 in loans through CommonBond. That's good news if you borrowed heavily to get through school.

  • Ability to add a co-signer. You can add a co-signer, which can help you get approved or get a lower interest rate. CommonBond also offers co-signer release after a certain number of payments so they're not tied to your loan for the entire term.

  • Community events. CommonBond has a strong community that hosts networking events, panels, and career assistance. You can take advantage of it to make connections and find job opportunities.

  • Social mission. One thing that makes CommonBond stand out from other lenders is their social promise. For every loan refinanced with CommonBond, they will fund the education of a student in need in the developing world.

  • Referral bonus. Every time you refer a friend to refinance with CommonBond and they get approved, you'll get a $200 cash bonus.

IS NOW A GOOD TIME TO REFINANCE STUDENT DEBT?

© Moyan Brenn (CC BY 2.0) via Flickr

Ideally, you want to refinance your student loans when interest rates are low. Waiting until rates start to climb may mean missing out on the best deal.

At the moment, rates are still low but that could change in the future. Ultimately, whether it's a good time to refinance for you depends on what your credit looks like and where you're at financially.

RISKS AND DRAWBACKS

Be aware of these risks. We found three reasons why you might want to proceed with caution.

  • You might not be eligible. To refinance with CommonBond, you have to have graduated from an eligible school. Also, CommonBond currently does not operate in Mississippi and Vermont.

  • Savings aren't guaranteed. Refinancing doesn't necessarily mean you're going to save money. If your credit doesn't qualify you for the best rates, you may end up with an APR that's pretty close to what you were already paying. You might even be at risk of paying more in interest if you choose a variable rate loan and the rate takes a big jump later on.

  • You may lose your federal loan safety net. If you have federal and private loans, you can refinance them into a single loan — but you're taking a big gamble. Once you refinance federal loans, you're not going to be eligible for things like income-based repayment, deferment, or loan forgiveness if you work in the public sector.

    If you've got both types of loans, you're probably better off refinancing just the private ones and consolidating the others through a federal loan program.

HOW COMMONBOND WORKS?

Applying for CommonBond is simple and done completely online. Here's how it works:

  1. Fill out a short form. First, you'll fill out some general information. This includes your estimated loan balance, highest degree awarded, and income. You'll also supply your Social Security number.

  2. Get an estimated rate. CommonBond will conduct a soft pull on your credit. Within minutes, you'll have an estimated rate. This has no impact on your credit.

  3. Officially apply. If you decide to continue, you'll officially apply and upload supporting documents, like your loan statements, pay stubs, and proof of residency.

  4. Get the final offer. CommonBond will then conduct a hard credit pull to come up with your final loan rate and term options. This will show up on your credit report and have an impact on your score.

  5. Approve loan. Once the loan is approved, CommonBond will pay off your student loans. After that, you will just make one payment to CommonBond each month.

Am I Obligated Once I Apply?
CommonBond provides rate quotes with no obligation, so you're not locked in if your rate isn't as low as you'd like. You're actually better off shopping around with different lenders to see what kind of loan terms you might be able to qualify for.

CommonBond partners with institutional investors who provide the funding to cover the loans. These investors realize returns on the money they've put up when you pay the loan back.

IS REFINANCING WORTH IT?

© Jared Hersch (CC BY 2.0) via Flickr

Refinancing isn't going to be right for everyone and you need to think it through carefully before you pull the trigger. It could be a smart idea if:

  • Your credit has improved since college. With a better credit score, you'll be able to qualify for a better interest rate, which will save you a lot in the long run.

    If your credit isn't that great, you won't get the best rates. It's easy to get stuck in a Catch-22 if you're trying to improve your score but interest rates are going up at the same time. Even if you do clean up your credit, rates may be higher by the time you're ready to apply.

  • If you've still got a lot of time left on your debt. If you're only a couple of years away from being debt-free, you've pretty much paid most of the interest by this point. Refinancing probably isn't going to yield much of a benefit at this stage.

  • If you don't plan to apply for forgiveness programs. Before refinancing federal loans, make sure you don't plan to take advantage of federal forgiveness programs. You'll lose the ability to take part in them.

COMMONBOND ELIGIBILITY REQUIREMENTS

Before you can refinance with CommonBond, you have to make sure you're eligible. Here's a rundown of the most important requirements you need to meet:

  • Residency. You must be a U.S. citizen, permanent resident, or H1-B, J-1, L-1, E-2, or E-3 visa holder.
  • School. You must have earned a degree from one of the over 2,000 Title IV accredited universities or graduate programs.
  • Credit history. The better your credit, the better the offer you'll receive. If your credit isn't up to snuff, you'll need to find a credit-worthy co-signer to get the ball rolling.
  • Income and employment. CommonBond requires either proof of income (like pay stubs) OR a letter of acceptance from a future employer.

WILL I GET APPROVED?

Not everyone is going to get the green light for a refinance loan with CommonBond. Even though they're not a traditional lender, they still hold borrowers to a certain set of standards.

If you're wondering what your chances of getting approved are, take a step back and see yourself the way a lender would see you.

For example, if you have a good credit score, you've been working steadily since you left school, you don't have any other debts, and you're bringing in some decent cash, then you're going to look a lot more attractive.

If you're the total opposite of that, your odds of getting approved might be slim if you don't have a co-signer who's willing to help.

HOW IT COMPARES

Doing your research before you commit to refinancing with CommonBond is a must. To make it easier, check out how it stacks up the competition.

LENDKEY

LendKey has a lot in common with CommonBond. You can use it to refinance private or federal loans, you have a choice between variable and fixed rates, and there are no origination fees. The one big difference is that instead of using larger banks to fund loans, LendKey relies on credit unions and community banks for funding.

 CommonBond Student LoansLendKey Student Loans
 Learn MoreLearn More
 

CommonBond Student Loans

LendKey Student Loans

 

Benefits and Features

Variable APR
2.43% to 6.59% (with AutoPay)
2.51%-7.51% (with AutoPay)
Fixed APR
3.49% to 8.07% (with AutoPay)
3.49%-7.54% (with AutoPay)
Minimum Amount
$5,000
$7,500
Maximum Amount
Up to $500,000
$300,000
Loan Term5 to 20 years; Hybrid loans are 5 years of fixed payments and 5 years of variable payments
5 to 20 years
State Residency
All states eligible
Most states except: ME, ND, NV, RI, and WV
Degree Requirements
Associates or higher
Bachelor's or higher
Income Requirements
None
$24,000
Employment RequirementsMust be employed or have an offer
Must be employed
Interest Only Payments
No
Yes for the first 4 years
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Yes
Yes
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility
 Learn MoreLearn More

CommonBond: Pricing information from published website as of 6/19/2019

LendKey: Pricing information from published website as of 11/15/2018

What we like about LendKey
We think LendKey is worth a look for a couple of reasons. For one thing, the interest rates it advertises are slightly lower than what CommonBond is currently offering. LendKey also offers more flexibility with repayment, and certain loans will even let you make interest-only payments for the first four years.

Why we like CommonBond more
Even though LendKey has somewhat lower rates, we'd still recommend CommonBond based on how much you stand to save. According to LendKey's website, their borrowers save an average of $12,500, which is $1,500 less than what CommonBond advertises. The fact that you get a third interest rate option with the hybrid loan also gives it the edge.

CITIZENS BANK

Citizens Bank is a traditional bank that offers refinancing for private and federal student education debt. Loan terms last either 5, 10, 15 or 20 years, which is the same as CommonBond. There are no origination fees for loans and no prepayment penalties, which can save you money.

 

CommonBond Student Loans

Citizens Bank Student Loans

 

Benefits and Features

Variable APR
2.43% to 6.59% (with AutoPay)
2.63%-7.98%
Fixed APR
3.49% to 8.07% (with AutoPay)
3.20%-8.34%
Minimum Amount
$5,000
$10,000
Maximum Amount
Up to $500,000
$350,000
Loan Term5 to 20 years; Hybrid loans are 5 years of fixed payments and 5 years of variable payments
5 to 20 years
State Residency
All states eligible
All states eligible
Degree Requirements
Associates or higher
None, but you must have made 12 on-time payments to be eligible
Income Requirements
None
$24,000
Employment RequirementsMust be employed or have an offerMust be employed or employed before first payment due date
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Yes
Yes
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility

CommonBond: Pricing information from published website as of 6/19/2019

Citizens Bank: Pricing information from published website as of 03/18/2018

What we like about Citizens Bank
One of the biggest marks in Citizens Bank's favor is the fact that you don't need to have graduated to refinance your student loans. That requirement can be a major barrier if you've got your eye on CommonBond. One other nice perk is a 0.25% interest rate reduction if you have a checking or savings account with Citizens Bank.

Why we like CommonBond more
CommonBond beats outs Citizens Bank for a few reasons. Because it is a traditional lender, Citizens Bank is more stringent in terms of the kind of credit you need to qualify. Not only that, but the fixed and variable rates the bank offers are a bit higher than what you can get with CommonBond.

SOFI

SoFi, a heavy hitter in the student loan refinancing arena, is not all that different from CommonBond. This lender offers loans for federal and private refinancing with fixed and variable rates. Loan terms are similar, lasting 5, 10, 15 or 20 years, and SoFi also offers extra protections if you lose your job.

 CommonBond Student LoansSoFi Student Loans
 Learn MoreLearn More
 

CommonBond Student Loans

SoFi Student Loans

 

Benefits and Features

Variable APR
2.43% to 6.59% (with AutoPay)
2.430% to 6.650% APR (with AutoPay).
Fixed APR
3.49% to 8.07% (with AutoPay)
3.49% to 8.074% APR (with AutoPay)
Minimum Amount
$5,000
$5,000
Maximum Amount
Up to $500,000
No maximum
Loan Term5 to 20 years; Hybrid loans are 5 years of fixed payments and 5 years of variable payments
5 to 20 years
State Residency
All states eligible
All states eligible
Degree Requirements
Associates or higher
Associates or higher
Income Requirements
None
None
Employment RequirementsMust be employed or have an offerMust be employed or have an offer to start within 90 days
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
Yes
Can release a cosigner
Yes
No
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility
 Learn MoreLearn More
 Terms Apply. SoFi Disclaimers

CommonBond: Pricing information from published website as of 6/19/2019

SoFi: Pricing information from published website as of 06/05/2019

Earnest

 CommonBond Student LoansEarnest Student Loans
 

CommonBond Student Loans

Earnest Student Loans

 

Benefits and Features

Variable APR
2.43% to 6.59% (with AutoPay)
2.43% - 7.21% APR (includes 0.25% autopay discount)
Fixed APR
3.49% to 8.07% (with AutoPay)
3.48% - 7.82% APR (includes 0.25% autopay discount)
Minimum Amount
$5,000
$5,000
Maximum Amount
Up to $500,000
$500,000
Loan Term5 to 20 years; Hybrid loans are 5 years of fixed payments and 5 years of variable paymentsCustom term from 5 to 20 years (180 term options)
State Residency
All states eligible
Most states with the exception of: DE, KY, and NV and no variable rate loans to residents of: AK, IL, MN, NH, OH, TN and TX
Degree Requirements
Associates or higher
Associates or higher
Income Requirements
None
None
Employment RequirementsMust be employed or have an offerMust be employed or have an offer for a position to start within 6 months
Interest Only Payments
No
No
Origination Fees
None
None
Prepayment Penalty
None
None
Can use a cosigner
Yes
No
Can release a cosigner
Yes
Only on existing loans
Auto-Pay Interest Rate Reduction
Yes
Yes
Soft Credit Check
Yes
Yes
Unemployment Protection
Yes
Yes
Customer Service
Loan Term
Ease of Use
Interest Rates
Payment Flexibility

CommonBond: Pricing information from published website as of 6/19/2019

Earnest: Pricing information from published website as of 06/24/2019

COMMON QUESTIONS

Am I obligated once I apply?
Nope. Even if you officially apply and get your actual rate, you don't have to take it if you don't like the rate. In fact, it's smart to shop around at different lenders. FICO treats all inquires within 45 days as one single inquiry.

Does refinancing student loans cost money?
It should NOT cost money (aside from when you make repayments). Many student loan refinance lenders do not charge an application fee or origination fee. So there is no reason why you should pay for those.

Can you refinance student loans more than once?
Yes, technically you can refinance with private lenders as often as you like. If you can qualify for lower rates and/or a better term, this can save you money on interest. If your credit has improved a lot or you're making more income since you first refinanced, it could be a good option.

How soon can I refinance my student loans?
CommonBond requires that you have graduated before you refinance with them. This also depends on your individual situation. If you have a job lined up right after graduation and you already have some positive credit history, you can refinance right away and benefit from a lower interest rate. If you don't have a job yet and no credit history, you may need to get those in order first.

THE BOTTOM LINE: IS COMMONBOND A GOOD CHOICE?

© Gonzalo Baeza (CC BY 2.0) via Flickr

There are lots of things to like about CommonBond if you're in the market to refinance your student loans.

If you're able to get approved, it could help you put thousands of dollars back in your pocket. Do your comparison shopping and some math before you sign off on new loan terms. For example, if you decide to go with a longer payment term to keep your monthly payments low, know that you could end up forking over a lot more money over time in interest charges.

All in all, CommonBond is worth a look if you're ready to save some money on your loans and you've got the rest of your financial ducks in a row.

Rebecca Lake is a journalist at CreditDonkey, a student loan comparison and reviews website. Write to Rebecca Lake at rebecca@creditdonkey.com

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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