Commonbond has a lot of rates which are competitively priced for their student loan refinance and they also work for a good social cause. But are they the ones for you? Have a look at this article below and make the choice. They have a hybrid program. It has quick processing of loans - funds that are approved will be sent to you within a period of 2 weeks.
Your eligibility might depend on the state you reside in. Their process of approval tends to be a long one.
Table of Contents
What's the bottom line?
They are good options if you are considering switching between variable and fixed interest rates on your student loans.
In case you are looking to get through your student loans faster, refinancing your loan with CommonBond should allow you to have a better rate. But is that a smart move will be something we shall talk about here.
Since CommonBond is a fairly new company that has to refinance for student loans on offer.
They do not take your credit scores and history into much consideration while they are making the decision of approval on your application. They take your career prospects into consideration though, like taking how you are going through your education and career and also how well your credit history is in terms of money management.
In the instance that they see something that they like, they would be more inclined to offering you a low-interest rate on your student loan debt which in the long run should help you save a lot more money and make it much easier to manage your money from month to month.
CommonBond is also known for their social mission to provide for the education of those children that are in need.
Things to know about CommonBond
They offer terms of 5, 7, 10, 15, or 20 years
They have fixed, variable, or hybrid rates
They don't charge any origination fee or prepayment penalty
You can refinance federal, private, previously consolidated loans, and Parent PLUS loans
Perks of using CommonBond
1 - Savings are great
You will be able to save a lot of money if you are able to qualify for a low-interest rate with CommonBond. If you have a look at the CommonBond website, they mentioned that the average amount of money that a customer who worked with them saved about $14,000.
2 - All-rounder review process
CommonBond usually does not bother with the credit score of the borrowers that they work with. They look at a few more factors than just that 3 digit number. Although you still need a good credit score for you to be eligible, it isn't the only way that CommonBond judges it's customers.
3 - Options are numerous
Since CommonBond has about 3 different rate choices to offer in terms of refinancing and those are - variable, fixed and hybrid. Fixed rates are a little higher than the rest but they are good if you want to be able to have a stable set of payments to make every month without having to worry about any variations. Variable rates are a little lower but they depend mostly on where the market is going, and depending on whether the changes are for the good or bad the rates can differ accordingly.
This Hybrid rate is something of sorts that is unique to Commondbond or at least for now in the Student loan industry. This is a loan that has a term of about 10 years and it states that you will be given a fixed interest rate for the first 5 of those years in the 10-year term and the variable for the rest of the 5 years. The is a little lower in terms of the fixed rate that is available for the 10-year term, so it is a good option to consider if you believe you will be able to prepay.
4 - No hidden fees
CommonBond has no charges in terms of origination fee or any sort of application fees that it puts on its customers.
5 - No prepayment charges
In case you are interested in paying off your student loan at the earliest and happen to win the lottery and have a wad of money to spend and consider doing so towards your student loans with CommonBond then they will not charge you with any prepayment penalty, this also applies to those who plan on making more than the required monthly payments in order to wipe off their debt as soon as possible.
6 - An autopay discount
If you happen to be one of those that do not mind paying monthly on a regular basis without having to worry about having enough money in your account then you should consider signing up for their autopay which entitles you to a discount of about 0.25% on the interest rate on your student loan.
7 - They offer Forbearance and Deferment
In case you are facing any sort of economic difficulties and will not be able to make payments further ahead of indefinite time, you do not need to worry. CommonBond has a very long period of forbearance on their student loans and offers an extended period of up to 24 months of forbearance through the life of their loans.
CommonBond also includes this offer on academic deferment for those borrowers who are returning to school again.
8 - Refinance limits
CommonBond has a very high ceiling in terms of limits of refinancing for their student loans, you are able to refinance up to a limit of $500,000 in loans through CommonBond. That is a good thing if you ended up borrowing severely to get through school.
9 - Addition of a co-signer
You are able to add a cosigner which should help you land a loan offer with a much lesser interest rate than you would otherwise. And in instances make you eligible to get a loan if you weren't before.
It also offers a Co-signer release after you make a couple of payments regularly so as to allow the cosigner free instead of being tied for the entire length of the loan term.
10 - The community of CommonBond
CommonBond is known to have a very good community that is involved with hosting many events for networking and help borrowers with their careers with many panels to achieve the same.
You get good exposure with all these and get to take good advantage of the same so as to help you make good connections and also discover job opportunities.
11 - CommonBond's social goals
If there's anything to set CommonBond apart from the rest of the flock, it would be their social promise to help a student in need in the developing world with the needs of their education for every loan that undergoes refinancing with CommonBond.
12- Their referral bonus
Here is your chance to make some money while helping other people out with their student loan refinancing. If you refer a friend to get their loans refinanced and they do so with CommonBond then you get a $200 finders fee.
A good time to refinance your student loan debt
It would be an ideal scenario for you to refinance your student loans when the rates are low. Although waiting until the rates begin to rise might mean that you are missing out on a good deal.
Since the rates are low for the moment, although this can change in the near future. Importantly, whether or not to refinance is a decision that is solely left up to your discretion and should ideally be done when your credit looks great and as long as you are financially stable.
What are the risks and drawbacks
You definitely need to know the risks that are involved in getting your student loans refinanced and why you need to proceed with a little presence of mind and sense.
Your eligibility might be in question.
To be able to refinance with CommonBond, you should be a graduate from a school that is considered to be eligible according to CommonBond. Keep in mind CommonBond does not function in the states of Vermont and Mississippi.
Savings from refinancing are not guaranteed.
Refinancing does not have any sort of guarantee that you will end up saving a lot of money. If your credit scores do not make you eligible for a great rate, you might end up paying an APR that is similar to the one that you were already paying before. You might even have risked it and later ended up having to pay an interest rate that is higher than you did before in case you switched to variable and the rate jump high.
Losing your federal loan protections
If you have both a federal and a private student loan, and you want to refinance them into a single loan, you'd be taking a huge gamble. Once you convert those loans into a single loan, you are essentially turning your federal and private loans into a single big private loan and hence will lose all the things that you are eligible with your federal student loans such as the income-based repayment plan, loan deferment or loan forgiveness in case you work in the private sector.
In case you have such a situation as above where you have both federal and private student loans, you are probably at a better odds if you just refinance your private loans into one and then have your federal loans be consolidated through a federal loan program.
How does the CommonBond function?
It is a pretty simple process to work with CommonBond. You apply online through their website.
Process of applying to CommonBond
You first fill out a form that has all your general info.
This usually includes your estimated loan balance, the highest degree that you are awarded, and your current income. You will also be needed to enter your Social Security number.
Get the interest rate estimated
CommonBond does a soft credit pull and you shall be given an estimated rate within minutes. Since this is a soft credit pull it won't affect your credit score or history.
You then apply officially
In case you make up your mind to continue, you will have applied officially by uploading some support documents, like for example your loan statements, the pay stubs to show you are regular in your payments, and proof of residency for security purposes.
You finally get the Offer.
CommonBond then proceeds to do a hard credit pull on your financials and then comes up with the final loan rate and the term options for your loan. Since this is a Hard Credit pull it will show up on your credit score and also show up as a point in your Credit Report.
After the loan application is approved, CommonBond will move ahead and pay off any of your loans that were enrolled for the refinancing. After this, you will be required to make just one payment towards CommonBond every month.
Is refinancing worth the effort?
Refinancing is not going to be good for all those that apply for it, you need to have a clear line of thoughts on the topic before you move ahead with it, it could be your option if -
Credit score - Your credit score is on the incline ever since you finished college. With a much better credit score, you should become eligible to get a better interest rate, which should save you tons of money in the long term.
In case your credit score is not that good, you will not be eligible to get the best of rates, it is easy for you to get stuck in a situation if you are attempting to get better scores but the interest rates seem to be rising together with time. Even in case you are able to get your credit to rising, the interest rates might have risen to such a state that it no longer be feasible for you when you are ready to apply.
In case you have a lot of time left over your debt.
If you are just a few years from becoming free of debt, you would have mostly paid off all your interest by now. So refinancing might not give you much of a benefit at that time.
Forgiveness programs - If you are not planning on applying for the forgiveness programs.
Before you end up refinancing your student loans you should keep in mind that you lose the advantages of having the federal forgiveness programs at your disposal. And you will no longer be able to get to participate in them.
CommonBond Requirements and Eligibility
Before you are able to go ahead and refinance with CommonBond you should make sure that you are eligible for refinancing according to their terms.
Here is a list of the things that CommonBond looks for before you get approval for refinancing with them -
Residency - It is required that you are either a U.S. Citizen, permanent resident or an H1-B, J-1, L-1, E-1,3 visa holder.
School - You should have a degree that you earned from a Title IV accredited Universities or graduate programs.
Credit History - As long as your credit can stand its ground under their scrutiny, you should be good. If not you will need someone who's credit is and have them cosign for you so as to get your loan approved.
Employment and Income - CommonBond needs either the Offer letter from a future employer or proof of income (pay stubs).
Chances of being approved?
Although many will get to refinance their loans with CommonBond, some would not be eligible to refinance. Even when CommonBond is not a traditional lender, they still expect a certain standard in terms of their customers.
In case you are still wondering what are your chances at being approved for a loan, back up for a second and look at yourself in a way that you are the lender and consider what might be the things that might require to be taken care off.
For example, if you have a good credit history with a good credit score, you have been working diligently since graduating from school, you do not have any unpaid debts to take care off, and you earn a decent income with some extra left for say making loan payments in the instance that they are approved, then the lender might consider you as an option that they might consider to accept.
Although in case you seem to not have any of those mentioned above, your chances of getting a loan approval might be really slim without someone who has a good credit score or history to cosign willing to help you out.
So what's the conclusion?
There's quite a number of things to consider about CommonBond in case you are looking to refinance your student loans.
If you do get the approval for your student loan to be refinanced, it might be very helpful in getting back a lot of dollars back to your bank account. Check out the differences between the different lenders that you know and do a couple of calculations and sign off on those new loan terms. For example, if you want low monthly payments and choose to go the longer payment term way to get it, you might have to pay a lot of money in terms of interest over the life of the loan.
But, CommonBond is worth it if you are ready and want to save some money on your loans if you have the rest of your financial problems under control
CommonBond student loan servicer Reviews FAQs
1. Am I obligated once I apply?
Not really. If you are at choice even when you apply officially and get an actual rate, you still have the choice to leave if you do not like the rate, so it is better to save the hassle by looking up different lenders and then comparing them before going through this process as this will affect your credit scores if they do a hard credit pull. FICO takes all inquiries made within a span of 45 days as a single instance.
2. Does refinancing student loans cost money?
It technically should not cost you any money other than the repayments that you will be needed to make on a monthly basis. Most student loans refinance lenders will not be charging you any origination or application fees. So you should generally not need to pay for them.
3. Can you refinance student loans more than once?
Yes, you are able to refinance as many times as you would like to with the private lenders. As long as you are eligible for lower rates or better loan in the case of term length, this will save you money on the interest. If your credit improved quite a bit or if you started to make a bit more money since you first refinanced, it should be an option for you to look into.
4. How soon can I refinance my student loans?
CommonBond, however, needs you to be a graduate before you go ahead and refinance with them. This also varies from person to person based on their own situation. If you got a job right out of school and you've got some good credit history, you should be able to refinance straight away and get a better interest rate. Although if you have no job still and no credit history you might have to get those first.