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In Depth: CommonBond Student Loan Consolidation Review (CommonBond.co Refinancing)

Michael Lux Blog, Student Loan Consolidation Reviews, Student Loans 39 Comments

Article Last Updated on 2/17/20 to reflect the most recent interest rate information.

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.

As a result of the customer feedback and rates offered, CommonBond has been a regular in our student loan refinance lender rankings. That being said, like other lenders, CommonBond does have some flaws that borrowers should understand before starting the refinance process.

The CommonBond Basics

CommonBond is different than many other student loan refinance companies because its business focus is centered around student loans.

CommonBond Consolidation Review

Interest Rates
Co-Signer Release
Loan Terms
Repayment Length

Great

CommonBond offers ultra low interest rates and even gives you some cash up front to earn your business.

Some lenders are traditional banks that have added student loans to their many other features. Others, such as SoFi, have started in student loan refinancing but quickly expanding into other financial services. At CommonBond, the exclusive specialty seems to be student debt.

In our investigation of CommonBond the company, we found evidence of efforts by CommonBond to be socially responsible. This millennial-friendly corporate approach includes charitable contributions and a yearly trip to Ghana for customers and employees to build classrooms.

CommonBond Refinance Rates, Terms, and Options

CommonBond Overview
Loan Terms5, 7, 10, 15, and 20 Years
Variable Rate Loans1.99% - 5.61%
Fixed Rate Loans2.98% - 5.79%
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.

Advantages to Working with CommonBond

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 five different length repayment plans. Having the option of 5, 7, 10, 15, and 20-year plans allow borrowers to tailor monthly payments to their specific needs.

CommonBond also offers what they call CommonBridge. CommonBridge is a 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 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.

A Few Reasons for Concern

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, converting federal debt into private debt is one of the major risks of Student Loan Refinancing. Borrowers interested in consolidating their Federal loans into a private loan would be wise to very carefully consider their options before irreversibly consolidating their loans. That being said, this particular concern applies to all student loan refinance companies and is not unique to CommonBond.

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 will have higher rates than those on a 5-year variable-rate loan.

CommonBond Interest Rates vs. Other Refinancing Companies

At present, CommonBond seems to excel in both fixed-rate and variable-rate loans. In our breakdown of student loan refinance rates, we found that CommonBond was a top lender in the variable-rate categories of 5, 7, and 10-year loans. For borrowers who plan on quick and aggressive repayment, this can make CommonBond a very appealing option.

CommonBond is also starting to develop a reputation for having a higher approval rate than other student loan refinance companies. Borrowers with excellent credit can expect a low interest rate while borrowers with less than perfect credit may still find approval.

CommonBond Review: Final Thoughts

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.

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krantcents

Unless the interest rate is zero, you should aggressively pay down your loans.

Guest
Guest
Reply to  krantcents

Why? At 1.93% I can take that money that I could use to payoff my loan, invest it and make 5X that amount pretty comfortably. My current rate is a little higher and I could have paid my loan off in full but I chose to invest the money instead and have made 5x my rate in the last year. Taking tax into the equation I am still way up. While some loans should be paid off, there’s nothing wrong with carrying a bit of debt if you are smart with it and know your limits.

Brad
Brad
Reply to  Guest

care to elaborate on how you’re investing money?

Messy Money
Messy Money

It’s good to know there are options. I hope people look at all there options if they have student loans and don’t resign themselves to just accepting everything at face value.

BayAreaPakhtun
BayAreaPakhtun

So I refinanced with CommonBond, while the process was easy it was a pain in the neck to set up auto pay etc because who they sold my loan to was another company that is currently a pain to deal with…..

D.Woods
D.Woods
Reply to  BayAreaPakhtun

Who did they sale it to?

Vivek
Vivek

Thank you. I saw common bond on a google ad and I wasn’t sure because it seemed pretty good. Mohela won’t lower your interest rate at all so I was looking for options and it seems these guys are legit per your review.

Katie King
Katie King

CommonBond was ridiculous. They told me I needed a cosigner on a $9500 refinance due to “insufficient income”. I make 75k/year! They said the minimum is 80k. Really??

Annie from CommonBond
Annie from CommonBond
Reply to  Katie King

Hi Katie – I’m on the team at CommonBond. We no longer have income requirements, so I encourage you to check out our new rates or chat with our Care Team at 800-975-7812. They’ll be happy to assist you to find the best rate.

Julia
Julia
Reply to  Katie King

Same happened to me! I couldn’t believe it.

Annie from CommonBond
Annie from CommonBond
Reply to  Julia

Hi Julia – I’m on the team at CommonBond. We no longer have income requirements, so I encourage you to check out our new rates or chat with our Care Team at 800-975-7812. They’ll be happy to assist you to find the best rate.

fully_relaxed
fully_relaxed

The same thing happened to me just last week. It is ridiculous that they still haven’t put that requirement up on their website.

Annie from CommonBond
Annie from CommonBond
Reply to  fully_relaxed

Hi there – I’m on the team at CommonBond. We no longer have income requirements, so I encourage you to check out our new rates or chat with our Care Team at 800-975-7812. They’ll be happy to assist you to find the best rate.

Justin
Justin

This is a blatant lie, I was just told that the income requirement is 60K, I make this amount, but I’m told that my bonuses don’t count. My cosigner has a good credit rating, but was denied due to debt ratios.

Mike
Mike

Interesting interactions so far with CommonBond. I am not through the application process yet but, wanted to fill some of you in on one of their backwards financial practices that may benefit some of you. They actually consider commissions as part of your income! Even more odd, they do not count a consistent annual bonus amount. This is contrary to any other lender or mortgage broke i have ever worked with. I do not make commissions and have a large annual bonus so it hurt me a bit but, may be very beneficial to sales folks. I will update as the process moves along.

Annie from CommonBond
Annie from CommonBond
Reply to  Mike

Hi Mike – Thanks for sharing your experience here. To clarify, we don’t consider commission as part of your income in the underwriting process, but we consider numerous other factors to get your rate. If you have any questions about the process, don’t hesitate to get in touch with our Care Team at 800-975-7812. They’ll be happy to assist you to find the best rate.

The Student Loan Sherpa
Reply to  Mike

Thanks for that great insight Mike!

Keep us posted on how it goes for you.

LYNN coyle
LYNN coyle

I’ve been carrying 36K at usurious 8% fixed through Direct Ed/Navient since 2005. I make 60K a year and have excellent credit; CommonBond refinanced me at 3.7% and for the first time in a decade there is a light at the end of the debt tunnel for me.

Sara
Sara
Reply to  LYNN coyle

I feel compelled to share my super positive experience w/ CommonBond so far as well. I have been weighed down by about 50k in federal loans for most of my adult life. I finally did my research and the math and realized I’ll save over $15,000 in interest by refinancing w/ a private lender. CommonBond offered me 3.35% (5-year fixed) rate + bonus. Their customer service has been far superior to SoFi (horrible responsiveness and they quoted me 4.615% (5-year fixed) even though I’m in their top target group of customers). The SoFi interface is horrible and I had to upload my documents 3 separate times before they got what they needed, then by the time customer service got back to me, my docs had expired and I was told I had to upload them again. No thanks! I also really like the social responsibility aspect of CommonBond and overall positive experience, so I’d much rather give them my business. Curious how others feel about SoFi vs. CommonBond. Thanks!

D.Woods
D.Woods
Reply to  LYNN coyle

Was that variable or fixed?

LYNN coyle
LYNN coyle
Reply to  D.Woods

I chose variable since I will have it paid off in 2 years and even if the rate maxed out, it would still be lower than I was getting through Direct Ed. Also, the LIBOR has been nearly flat since 2009. I could have chosen fixed at 4.5%. Again, still half of what I was paying.

The Student Loan Sherpa
Reply to  LYNN coyle

That is great news Lynn. Congrats!

Not Fooled by the hype
Not Fooled by the hype

I have about $220K at 10.5% interest. I was preapproved through CommonBond at a 6.5% rate. I make $92K a year and credit score is 752. It told me I need a consigner. Added a consigner with a credit score of 657 and income of $200K. They DENIED the loan. Said my credit score was “below the threshold” and both of our incomes are too low. This is a joke.

Justin
Justin

This is a terrible article, were you being paid by CommonBond? Completely bias towards them, they make it nearly impossible to re-finance. Obviously you haven’t had the experience of someone who has tried to refinance with them. Go back to journalism school and incur more student loan debt, then try re-financing then you will have a true experience on which this article should be based.

The Student Loan Sherpa

Very interesting. It does seem worth looking into. Thanks for the heads up!

Marlise
Marlise

I submitted all of my documents about 4 months ago and still haven’t gotten a response on when the process will be completed. Every time I chat with someone online I get the same computer response that they have had increased applications and it’s taking them longer to review all of them. I”m sorry, but 4 months without a solid response is unacceptable

Jenn
Jenn

I have perfect credit and I make 60k a year and they gave me a 5.55% rate fixed. It’s ridiculous. Then they’ll tell you that you have to make “minimum salary requirements.” It’s a scam. They asked for a cosigner. I can finance a 40k car but can’t refinance 10k? Oh okay.

gophergrabber
gophergrabber
Reply to  Jenn

Lots of money have I but I am retired. With a home paid for, retired pay even more than I made while working, liquid assets in stocks and bonds totalling a large sum common bond turned me down because they only accept less than a quarter of my annual income as “assets” according to them. Seems I might have lucked out as these people seem to not follow their own terms. Stay away, I say.

Jon
Jon
Reply to  Jenn

Well there’s a difference. They can take back the car (collateral).

but anyways.

I also applied and and I never got to the rate because they ask for a cosigner. I make 95k a year in a steady field with 6 years experience. I only wanted to refinance 30k. Credit Scores in the 700. 130k in credit limits. All the other lenders 4-5% depending on which one with no need for cosigners.

The Student Loan Sherpa
Reply to  Jenn

5.5% does seem a little high. Did you check to see what other lenders were offering? Right now it seems like the best fixed rate loans start at about 3.5%.

Mark
Mark

Just got off phone with Common Bond customer service to learn about their program and process. One key thing I learned, not specifically covered in Sherpa reviews but should be, is that in case of borrower’s death, Common Bond passes the loan repayment responsibility on to the co-signer. In case of SoFi, and maybe other lenders, the loan is forgiven if the borrower dies. Important point for co-signers.

Sara
Sara
Reply to  Mark

This is a good point, but only applies if you have a co-signer. From what I remember, SoFi had the same policy when I asked.

The Student Loan Sherpa
Reply to  Mark

The way a lender handles a co-signer’s obligation if the borrower dies should definitely be a consideration. Thanks for pointing this out Mark! I’ll look into this issue some more and update the reviews accordingly.

kingetep
kingetep

Applied as a cosigner with 820 credit score. Took a week for them to gather enough info to deny the loan. I called to ask why and suggested that they didn’t take my assets into account and they said that they already closed that application and that I could reapply if I wanted.

I applied to Discover and got 3 1/4 percent offer in less then 24 hours. Not really impressed and can’t say I like them.

Classicrider
Classicrider

Anyone who is in the same position I am in might as well not waste their time. I am 61 years old and helped my son get through college. He has a few loans in his name and I have only 5800.00 in mine at that great 8% interest. While in my Kedit Karma account it was suggested I go this route. I found out that I am not good enough because I personally didn’t go to college. Great credit score and a very successful business but they act as though I am worthless because I didn’t go the college route in the 70’s, like so many others.

The good thing they did for me is to get me to take a look a USAA and PFCU where I can get a better rate and they don’t discriminate!

Thema Davis
Thema Davis

The same thing happened to me just last week. It is ridiculous that they still haven’t put that requirement up on their website.

The Student Loan Sherpa

Very interesting. It does seem worth looking into. Thanks for the heads up!

Bear Trape
Bear Trape

Commonbond’s application process is horrible. From the reviewers, to the underwriters to the folks who answer the phones its a mess. Applied to redo student loans and they dragged out the process. I would never waste my time again.

Nina B
Nina B

@Michael Lux, wondering if you would re-examine this piece in light of this article from Bloomberg: http://www.bloomberg.com/news/articles/2015-06-10/pandit-backed-commonbond-to-sell-student-loans-to-wall-street and the last commenter below, who noted that Common Bond sold his loan to another company.