CommonBond Consolidation Review
CommonBond offers ultra low interest rates and even gives you some cash up front to earn your business.
Last Updated on 1/2/17 to reflect the most recent interest rate information.
Five years ago CommonBond was just an idea being tossed around by a few Wharton MBA students. Today it is a fast growing student loan refinancing company offering some unique products, and giving new customers $150 for signing up. The fresh perspective and relative youth of Common Bond results in a student loan consolidation offer that could be ideal for some, but may not be the best opportunity for others.
CommonBond consolidates both federal and private student loans. The range of interest rates for CommonBond start as low as 2.18% for their 5-year variable rate loan and go as high as 7.99% for their 20-year fixed rate loan. Like most reputable lenders there is no origination fee for CommonBond loans and there is no penalty for paying off your loans early. Borrowers can apply to consolidate a minimum of $10,000 in student loans, with no maximum limit.
The interest rates offered by CommonBond are some of the lowest student loan consolidation interest rates available. The lack of origination fees and prepayment penalties is another huge advantage. They also offer four different length repayment plans. Having the option of 5, 10, 15, and 20 year plans allows borrowers to tailor monthly payments to their specific needs.
CommonBond also offers what they call CommonBridge. CommonBridge is program to help borrowers who lose their job find a new one. They seem to be taking the calculated risk that spending money helping borrowers find a new job will be more profitable in the long run. This is definitely a rare approach and something we hope to see other lenders follow.
CommonBond also has a Hybrid Loan that is both a fixed rate loan and a variable rate loan. The Hybrid Loan has a 10-year repayment term, but the interest rate starts out as a fixed rate loan for the first five years and then becomes a variable interest rate loan for the final five. From a borrower perspective, it isn’t abundantly clear who this type of loan is best for, but it is definitely a unique option.
Another feature of CommonBond loans that we like is the fact that the loans are discharged in the event of the death of the borrower. This is one of those features that, unfortunately, is not standard on all student loans. Some lenders sneak fine print in the terms of the loan that passes the debt from the borrower to the cosigner in the event of an untimely demise. The fact that CommonBond discharges the loan in this situation should give borrowers peace of mind for a couple reasons. First, they have the assurance that their cosigners won’t get stuck with the bill. Secondly, CommonBond’s decision to discharge the debt at the death of the borrower is a good sign of a reputable lender.
One potential concern is CommonBond’s willingness to consolidate Federal student loans with private student loans. While this approach may work in certain limited circumstances, we also call it breaking the Golden Rule of Student Loan Consolidation. Borrowers interested in consolidating their Federal loans into a private loan would be wise to very carefully consider their options prior to irreversibly consolidating their loans.
Additionally, the attention grabbing interest rates are limited to the shorter term loans and the variable interest rate loans. People who want a 20 year fixed rate loan have a best possible rate of 5.62%.
The Bottom Line
If you have a solid income and credit score, and plan on aggressively paying off your student debt, CommonBond could be a great option. To find out what rate you qualify for, click here.