CommonBond is a Brooklyn, New York-based startup that lends money to M.B.A. students and refinances existing student debt. One of the unique aspects of CommonBond is how it collects financing. The company is backed by former big banking executives, but also looks to college alumni as investors in the future of education at their institutions. In return for the investment in education, CommonBond promises to offer lower rates than the Federal Direct Consolidation Program.
This type of financing can be attractive to students who like to bank with a bit of altruism. The bank also promises finance rates that are lower than federal government rates.
CommonBond offers three loan rate options: variable rates, fixed rates and hybrid rates. Variable rates are the lowest rates available. Fixed rates will not change and they can help you to lock in a low rate when interest rates are down. Hybrid rates offer a low fixed rate for the first five years of the loan and a variable rate for the last five years. Payment schedules can range from five to 20 years, and there are a number of disclaimers the bank states regarding its rates.
Loan consolidation allows you to roll all of your graduate and undergraduate loans into a single monthly payment. There is no pre-payment penalty if you pay back your loan early, so if you increase your payments as you earn more money, you can increase your savings over time. During times of unemployment the bank offers a forbearance program and there are no hidden fees woven into the loan process.
The application process begins with a seven-minute loan application to see if you are approved for credit. You can select the type of loan you want and then begin the formal application process. You will need to show documents, such as pay stubs, tax returns, your diploma or transcripts and student loan bank statements and identification. This can all be done with scan documents or images taken from your phone.
Once you are approved, the bank will contact your lenders, pay off your loans with them and you can begin paying CommonBond. If you enroll in auto-pay and you will receive another 0.25 percent discount on your rate.
Overall, CommonBond is a great option to consider for student loan refinancing. The ease of the application process, as well as the potential savings make CommonBond a serious contender in the student loan refinancing field.