CommonBond Student Loans: What you need to know
CommonBond is a private student loan lender that was established in 2011, and provides student loans to undergraduate, graduate, MBA, medical, and dental degree loans, as well loan refinancing options for both student and parents. CommonBond student loans are some of the most competitive on the market with few, yet major, drawbacks.
CommonBond Student Loans: common questions
Loan type: Undergraduate, Graduate, MBA, Medical, Dental degrees
Rate type: Fixed or variable
Loan term: 5 - 20 years, depending on the degree
Loan amount: $2,000 - up to 100% of the school-certified cost of attendance
Application and origination fees: 2% origination fee on Graduate, Dental school, MBA, and Medical school loans. 5% late fee of the unpaid amount of the payment due of $10, whichever is less. Return check fee of $5.
Discounts: Loans are a eligible for a 0.25% interest rate discount if you sign up for automatic payments.
Repayment options: Deferred (no payments until 6 months after leaving school), interest only (interest payments while in school), partial ($25 fixed monthly payment while in school), and immediate (principal and interest payments while in school)
Deferment or forbearance hardship options: Some. CommonBond states that it offers forbearance to borrowers who are experiencing economic hardship, but borrowers are urged to contact customer care for specifics. If granted forbearance, you can earned up to 3 months of deferred payments at a time for up to 12 months. Forbearance is offered for a total of 24 months over the life of the loan.
Co-signer release: After 24 months of timely payments
Grace period: 6 months following graduation or termination of enrollment
Perks: Social Promise: Every loan helps cover the cost of educating children in the developing world; Money Mentors: specialized customer service representatives who can offer customized guidance on budgeting, finding internships, and career planning.
What is CommonBond's forbearance policy?
CommonBond buries its forbearance policy deep on its website, we think in order to discourage borrowers from applying for forbearance. On its FAQ page, CommonBond states that borrowers who are considering opting for forbearance or who anticipate encountering financial difficulties should call customer service for more information. However, a little digging revealed that those who apply for forbearance can earn up to 3 months of deferred payments at a time up to 12 consecutive months, and can apply for a total of 24 months over the life of the loan. This is quite a generous forbearance policy for a private student loan lender, but its unclear what the eligibility for forbearance is.
What are CommonBond student loan rates?
CommonBond student loan rates are considered to be relatively competitive with the rates of other private lenders. CommonBond offers both variable and fixed rates. Depending on the type of loan you are looking for, ranges may be higher or lower. For example, undergraduate student loan variable rates range from 3.31% to 9.29% and fixed rates range from 5.45% to 9.74%.
Does CommonBond perform a hard credit check at the time of application?
CommonBond performs a soft credit pull that will not affect your credit score when you apply. However, a full credit report (a hard credit pull) is required to determine your interest rate. This can negatively affect your credit score, but is a necessary action for most lenders.
CommonBond Student Loans: Advantages
CommonBond has numerous advantages for student borrowers given that they meet the eligibility requirements and fit a certain student borrower profile - we think that student borrowers who have co-signers and a greater financial safety net would benefit the most from CommonBond student loans.
The application
Although a hard credit check is necessary to determine your interest rate, CommonBond will only perform a soft pull at the time of application. This means that you won't risk your credit score just to see if you qualify for a CommonBond student loan.
Repayment
CommonBond offers generous repayment options offered by some other private lenders, but not all. These four types of repayment types (deferred, interest only, partial, and immediate) offer student borrowers the opt for the type that they believe will fit their expected financial situation after college.
If you are eligible for and are granted forbearance with CommonBond, you'll find that CommonBond's forbearance policy is quite generous. You can qualify for 3 months of forbearance at a time for up to 12 month. Over the course of the life of the loan, you can take a total of 24 months of forbearance. Private lenders don't have the same protections as the Federal government and are therefore neither obligated nor incentivized to offer forbearance, making CommonBond's policy a huge advantage for student borrowers.
Social responsibility
CommonBond stands out in its promise to help fund the education of children in developing countries. The private lender has partnered with Pencils of Promise to provide schools, teachers, and technology to these students. For example, 470 schools have been built as a result of this partnership and thanks to student borrowers, per CommonBond's website.
Perks
Student borrowers have access to Money Mentors, who are essentially specialized customer care representatives who can help students beyond their CommonBond loan, such as with budgeting, building credit, finding internships, and more.
CommonBond Student Loans: Disadvantages
Despite its advantages, CommonBond has many disadvantages that may discourage some student borrowers from applying for a CommonBond student loan, such as a necessity of a co-signer.
The application
Unfortunately for students who plan on applying without a co-signer, CommonBond isn't an option. CommonBond requires that students apply for a loan with a co-signer to ensure that, ultimately, the lender is repaid.
Additionally, CommonBond is not available in all states. CommonBond provides a list of states whose residents can obtain a loan; the residents of the omitted states, like Mississippi, cannot obtain a CommonBond student loan.
The loan
Some loans have a 2% origination. This isn't uncommon, but there are other private lenders with competitive rates who do not have them. Students who believe that CommonBond is still the best option for them must budget for this fee when evaluating the lender's offer. This origination fee is applied to all CommonBond student loans except undergraduate loans.
While forbearance terms are very generous, there is no universal policy about forbearance eligibility and qualifications, which leads us to believe that student borrowers who request payment deferment are evaluated on a case to case basis.
CommonBond loan interest rates are not the best we've seen - in fact, many other private lenders have more competitive rates, but ultimately, the rate you get depends on the lender and your credit. Though the rates ranges may be a little higher than other lenders', you may still qualify for a lower rate with CommonBond than with another lender.
Applying and qualifying for a CommonBond student loan
CommonBond is not as precise as to what it's looking for in an applicant as other lenders. Essentially, CommonBond say that applicants who are U.S. citizens and permanent residents and enrolled at least half-time at an eligible school is qualified. CommonBond does not provide a list of eligible schools. Other than those criteria, credit history information is considered.
Per user reviews, CommonBond student loan applications can be filled out in just a few minutes in order to pre-qualify. If a student borrower chooses to follow through, a more in-depth completion addition to the application is necessary. This may include submitting income verification documents.
CommonBond Student Loans: User experience and customer service
CommonBond's FAQ section is very informative: prospective borrowers can make a relatively informed decision about whether or not to opt for this lender based on the answers to common questions about CommonBond student loans. However, like most, if not all lenders, some information takes a little while to find or requires a prospective borrower to call customer service.
CommonBond student loan customer service representatives who are not part of the Money Mentors program can be reached by phone or by email, but the customer service hours are not advertised on the site. In fact, we couldn't find any mention of customer service hours, though there is a phone number. This is probably due to the fact that CommonBond student loans are serviced by a company called FirstMark. Our best guess is that you can reach a customer care representative between 9am and 6pm on weekdays. Current borrowers can probably reach their assigned Money Mentor at more specific hours once a loan has been secured.
CommonBond Student Loans: What happens if I can't pay my student loan?
Prospective and current CommonBond student loan borrowers may remain in the dark about forbearance and deferment options until they find themselves in financial hardship. While CommonBond's policy is quite generous, qualifications for forbearance remain unclear. Unemployment, perhaps the most common form of financial hardship, may result in granted payment deferment, but we think it's safer to say that cases are evaluated individually.
CommonBond Student Loans: What borrowers and cosigners have to say
Many borrowers and cosigners have expressed disappointment in CommonBond's rates. While CommonBond advertises a healthy range for both variable and fixed rates, the lower ends of each range being quite competitive, many have complained that it's hard to qualify for a good rate, despite their great credit and sufficient income. While there is no official credit score minimum, we found that most borrowers have credit scores over 750 and have an income of over $100k. This isn't very attainable criteria for many borrowers, even the most affluent ones.
What type of borrower is a CommonBond student loan best for?
Based on customer complaints and the nitty gritty details of CommonBond student loans, we recommend that only student and cosigners with sufficient income and stellar credit scores submit an application. Because CommonBond doesn't do a hard credit pull, it can't hurt to submit an application for an interest rate quote. However, we warn that you may be disappointed by the results and recommend that only those who are sure of their financial situation apply. Additionally, we recommend that only students with surefire cosigners with whom they have a stable relationship opt for CommonBond.
CommonBond student loans versus federal student loans
We highly recommend that student loan borrowers opt for Federal student loans over a private lender like CommonBond - we believe that the benefits of Federal student loans greatly outweigh any perks private lenders can offer. However, if you are in need of additional funding beyond what the Federal government can offer you and what scholarships you can earn, private lenders like CommonBond are the way to go. CommonBond may not be the best overall option for supplemental student loans, but it may suit a certain type of borrower more than others.
CommonBond Student Loans: Verdict
CommonBond appears to be a good choice for certain student borrowers, but we don't recommend it for all. The necessity of having a cosigner can be a hard hurdle to overcome for some students who may not have that kind of support immediately available to them. Based on multiple customer reports, we also suggest that only older, more financially stable students consider CommonBond.
