CommonBond Student Loan

Got admission to the university of your dreams but can’t afford to pay the fees to book your place? You don’t need to worry anymore! Commonbond student loans are the solution you need.

Have you been accepted to the college or university of your dreams, been granted all the scholarships and grants you’re qualified for, and still find yourself in the dearth of tuition money?

Millions of students find themselves in the same position as the school year comes close, shifting to loans to assist in funding their education.

But you shouldn’t just bounce headfirst into any student loan you look at. There are a broad range of student loan types out there and understanding the terms of each option is crucial to getting the best one for you.

The article will explore whether Commonbond is legitimate, Commonbond student loan refinancing, and common types of student loans.

What is a Student Loan?

A student loan is a type of loan created to assist students to pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenditures. It may be different from other kinds of loans in the fact that the interest rate may be considerably lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the stringent laws regulating renegotiating and bankruptcy.

Is CommonBond Legitimate?

CommonBond is a private lending company devoted to student loans and refinancings. Introduced in 2013, it initially targeted MBA students; it has since extended to undergraduate, graduate, and medical and dental school loans. It makes loans both to individuals and through businesses that need to assist employees to finance their kids’ higher education.

What makes CommonBond exceptional is it’s the first financial company to commit to a one-for-one model of business. For every degree fully funded through CommonBond, the firm, in turn, funds the education of a poor student in a developing nation. Moreover, CommonBond’s partnership with nonprofit Pencils of Promise has given schools, teachers, and technology to thousands of students in Ghana. Till today, CommonBond has donated $1 million to students in need.

Pros of CommonBond’s Student Loans

  • Access to free mentoring: CommonBond’s Money Mentor, a text messaging service, presents borrowers counseling on subjects like getting more money for school, controlling their budget, and discovering internship opportunities.
  • No fees on many loans: CommonBond’s loans have no application fees or prepayment penalties; there are no origination fees on undergraduate and graduate loans. The medical/MBA financing does come with origination fees, but these are openly divulged and figured into the advertised APRs.
  • Simple co-signer release: Borrowers just require 24 consecutive months of payments after graduation to apply to get their co-signers removed.

Cons of CommonBond’s Student Loans

  • Co-signer needed on undergraduate and graduate loans: Student applicants for undergraduate and graduate loans won’t be accepted without a co-signer, even if otherwise qualified.
  • Higher repayment amounts on some loans: The in-school, fixed-payment choice for dental and medical school students is $100 per month.
  • No medical school residency deferment: Medical school students must start payments of at least $100 per month after their six-month grace period, even as residents (dental school students can defer payments during residency).

CommonBond Student Loans Available

Undergraduate Student Loans

Undergraduate student loans offer the most flexible repayment plans and terms of all CommonBond loans. They also automatically include the Money Mentor.

Variable Rates  6.59% – 9.39%
Fixed Rates  6.98% – 10.74%
Loan Amounts  $2,000 up to the total cost of attendance
Loan Terms  5, 10, or 15 years

 Graduate Student Loans

Graduate students see many of the same flexibility undergraduate borrowers get and may opt-in to obtain a free Money Mentor.

Variable Rates  6.73% – 9.39%
Fixed Rates  7.12% – 10.74%
Loan Amounts  $2,000 up to the total cost of attendance
Loan Terms  5, 10, or 15 years

MBA Loans

No co-signer is needed for a CommonBond MBA loan if you’re registered in one of about 30 in-network partner schools . Furthermore to loans, CommonBond has presented unique incentives to its business school borrowers: an internship program, summer career development series, and trips to Ghana.

Variable Rates  5.82% – 7.17%
Fixed Rates 6.04% – 7.25%
Loan Amounts $2,000 up to the total cost of attendance
Loan Terms 10 or 15 years

Dental School Loans

DMD or DDS students attending any dental school in the U.S. are qualified for a CommonBond dental school loan. These loans have a six-month grace period and the choice for residency deferment.

Variable Rates 5.95% – 7.32%
Fixed Rates 5.79% – 7.16%
Loan Amounts $2,000 up to the total cost of attendance
Loan Terms 10, 15, or 20 years

 Medical School Loans

Medical students attending one of CommonBond’s 59 partner medical schools in the U.S. are entitled to this loan. There’s no choice for deferment in residency but you can make monthly payments as low as $100.

Variable Rates 3.46% – 4.64%
Fixed Rates 5.56% – 6.76%
Loan Amounts $2,000 up to the total cost of attendance
Loan Terms 10, 15, or 20 years

Loan Eligibility

CommonBond’s minimum loan amount is $2,000 but you can borrow up to the cost of attendance decided by your school’s financial aid office. This cost comprises tuition and fees, books and supplies, room and board, transportation, and personal expenditures.

To be qualified for a CommonBond private student loan you must meet a few conditions:

  • be a U.S. citizen or permanent resident
  • be currently registered at least half-time at an eligible school.
  • have a minimum credit score of around 660

To ascertain eligibility, CommonBond also looks carefully at an applicant’s free cash flow, implying how much disposable income you have after paying your monthly debt obligations.

Loan Fees

CommonBond doesn’t charge application fees or prepayment penalties on any of its loans. Late payments incur a fee of 5% of the unpaid amount of the payment due or $10, whichever is less, and there’s a $5 fee for returned checks.

There is no origination fee on undergraduate and regular graduate loans. MBA, medical, and dental school loans do have a 2% origination fee, but it is shown in CommonBond’s advertised rates.

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MBA, medical school, and dental school loans have a 2% origination fee, but it’s already shown in CommonBond’s advertised APR

Loan Discounts

All loans are qualified for a 0.25% interest rate reduction (reflected in CommonBond’s advertised rates) when you register in auto-draft payments.

Repayment Options

CommonBond offers four in-school repayment alternatives applicable through a loan’s six-month grace period:

  • Full: Full monthly payment of the student loan, principal, and interest, beginning while you’re in school.
  • Interest-only: Pay only the interest that accrues. This option is only accessible to undergraduate, graduate, and MBA students.
  • Fixed: It Lets you make low fixed payments each month while you’re in school. Fixed payments are $25 per month for undergraduate and graduate students or $100 per month for dental and medical school students. There is no fixed option for MBA students.
  • Deferred: Postpone making payments until the end of your grace period, at which time all interest will be capitalized.

Repayments terms vary from five to 20 years, based on the loan type:

  • Undergraduate and graduate loans: 5, 10, or 15 years
  • MBA loan: 10 or 15 years
  • Dental and medical school loans: 10, 15, or 20 years

Rewards

CommonBond has a referral program where you can earn $200 every time someone takes out a student loan or refinances utilizing your referral link.

Forbearance and Loan Discharge Options

In the case of financial difficulty or medical impairment, you can put your loan payments on stop for three months at a time up to 12 months over the life of the loan.

And in the event of death or total and permanent disability, your CommonBond loan is revoked and will not be passed on to anyone else.

Length of Time for Loan Approval and Disbursement

Loan disbursements are paid directly to your school after CommonBond validates your enrollment. Confirmation can take anywhere from five days to three weeks. If you took out more than needed for official expenses (tuition, room, and board), your school will send a refund check.

Is Student Loan Refinancing Available?

CommonBond refinances federal, private, Parent PLUS, and previously consolidated loans with no application, origination, or prepayment fees. You can refinance up to $500,000 with repayment terms of five to 20 years. Rates are:

  • Variable: 1.97% to 6.82%
  • Fixed: 2.83% to 6.74%
  • Hybrid: 4.05% to 5.55%

Advertised rates include a 0.25% discount for registering in auto-draft and refinanced loans are qualified for up to 24 months of forbearance.

Student loan refinancing is also accessible to international students with any major U.S. visa who have graduated from a U.S. university.

Applying for a CommonBond Student Loan

CommonBond uses an online application and each accepted application is applicable for one academic year. To register you’ll need:

  • Your Social Security number
  • School information
  • Loan amount requested
  • Expected financial aid
  • Financial information, including rent or mortgage payments and income

Paying for College

CommonBond urges students to consume all their free and low-cost federal and state financial assistance options before taking out a private student loan. Submit the Free Application for Federal Student Assistance every year to see your entitlement and use a private student loan to bridge the gap.

CommonBond provides a wide range of loans and repayment options to best fit many different borrowers. Though, its credit and cosigner requirements may prohibit some borrowers from getting accepted for a loan. If you do not have access to a creditworthy cosigner, you’ll have to find another lender who doesn’t need borrowers to have one to be eligible for a loan.

What is the Most Common Type of Student Loan?

If you are in the course of submit an application for financial aid and are contemplating using loans to pay for some or all of your education, it’s vital to know what loan possibilities are available to you, as well as what each option will mean for you during your time in college and after graduation.

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Two separate categories of student loans exist federal loans and private loans.

Federal Student Loans

The William D. Ford Federal Direct Loan Program offers loans to undergraduate, graduate, and professional students. The loans come directly from the federal government — the U.S. Department of Education functions as the lender, instead of a private bank or another kind of financial institution. Two types of federal loans are available: subsidized and unsubsidized. There are also Direct PLUS loans, which are accessible to parents of undergraduates and to graduate and professional students.

There are several noteworthy differences between subsidized and unsubsidized federal loans.

Subsidized Loans

Subsidized federal loans are only offered to undergraduate students. To be eligible for a subsidized loan, you ought to prove financial need. The amount of the loan is dependent on your year in school. The maximum amount you can borrow as part of the subsidized loan program is $3,500 during your first year, $4,500 during your second year, and $5,500 in your third year and any years after that. The subsidized loan cap for your entire undergraduate career is $23,000.

When you register for financial aid, your school will inform you how much you can borrow as part of the subsidized loan program. You can’t borrow more under the program than your total financial requirement. If you attended college for four years and your school decided that you were entitled to borrow the maximum subsidized loan amount for each year, you would graduate with $19,000 worth of subsidized federal student loan debt.

A key benefit of the subsidized loan program is that the U.S. Department of Education will incur the interest on the loan while the borrower is still in school and is registered at least half-time. The government will resume paying interest on a subsidized student loan for the first six months after a student graduates or leaves school. If you want to defer payments on the loan at any time, the government will also pay interest.

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Unsubsidized Loans

Though subsidized federal loans are only offered to undergraduate students, unsubsidized loans are accessible to all undergraduate and post-secondary students, as well as graduate and professional students. A student also doesn’t require to have proof of the financial need to borrow under the unsubsidized loan program.

The federal government doesn’t pay interest on unsubsidized loans. A student can decide to make payments on the interest while they are still in school, or they can opt to have the accrued interest added to the principal amount after they graduate or leave school.

Unsubsidized loans have a higher cap compared to subsidized loans. For graduate and professional students, the yearly limit is $20,500. For undergraduate students, the maximum amount of unsubsidized loans they can take out depends on their year in school, whether they have subsidized loans or not, and whether they are someone’s dependent or not.

Over the course of their undergraduate career, a dependent student can take out up to $31,000 through the Federal Student Loan Program, with a maximum of $23,000 being in the shape of subsidized loans. The residual amount can be unsubsidized loans. If a student doesn’t meet the criteria for subsidized loans, they can borrow up to the maximum annual and lifetime limit as unsubsidized loans.

An independent undergraduate student can take out up to $57,500 total over the course of their college career, with no more than $23,000 coming from subsidized loans. Students who finish pursuing graduate or professional degrees can use up to $138,500 over the course of their entire time in school, with no more than $65,000 being in the form of subsidized loans.

Applying for Federal Loans

If you wish to apply for a federal loan, you are required to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA asks inquires you about your income and savings and about your parents’ income and savings if you’re a dependent student.

Your school utilizes the information you provide on the FAFSA to ascertain how much aid you be eligible for and the kinds of aid you can receive. It will then send you an award letter to inform you if you are qualified for subsidized or unsubsidized loans (or both), and the amount you can borrow.

You do not have to go through a credit check to get a federal student loan. Interest rates on the loans are fixed, so they stay the same for the duration of the loan. They are also generally lower than the rates on private loans.

Private Student Loans

The maximum amount a third-year or higher undergraduate student can borrow under the federal loan program is $7,500 per year. The average cost of tuition, fees, and room and board for full-time students at all post-secondary educational institutions was $23,835 in 2017-2018. The average cost (including room and board) at a private, nonprofit college was even higher at $46,014 in 2017-2018. Even if you borrow the maximum amount permissible under the federal loan program, you might discover yourself confronting a significant funding gap.

That’s where private student loans can come into play. Private loans are issued by a credit union, bank, or another type of financial institution. While entitlement for federal loans is dependent on the data provided on the FAFSA, eligibility for private loans depends on your credit history. A lender will run your credit prior to determining to accept you for a private student loan. You might require to have a cosigner, such as a parent if you have a restricted credit history or no history.

When you take out a private student loan, you are liable for incurring interest on the loan at all times, even though some private student loan programs will allow you to defer interest and payments until after you graduate or leave school. The interest rate might also vary over time on a private loan.

It costs to explore around if you are thinking of taking out a private loan to pay for school. Different lenders will propose different interest rates, terms, and repayment options. For instance, some lenders might permit you to make interest-only payments on your loan during the first 12 months after you leave school.

Perkins Loan

Note that this loan is no longer offered to students as of September 30, 2017, but it’s worth understanding as you may still find it popping around in discussions of student loans.

Perkins Loans were a wildly common option for students who meet the criteria for need-based aid. The Perkins Loan arrived with a low fixed interest rate and a generous grace period that permitted students 9 months after graduation to start paying as opposed to 6 months.

On top of those advantages, it was subsidized, implying the government incurred the interest accrued while the student completed their degree.

Stafford Loans

Stafford Loans, also referred to as Direct Loans, are among the most common types of federal student loans, accessible to both undergraduate and graduate students.

Stafford Loans need you to be registered at least half-time in a degree-seeking program. These loans come with all the advantages of federal funding, like the income-driven repayment plan, which defines your monthly payment based on income, and low fixed interest rates, with terms varying from 10-25 years. They do, though, come with an origination fee, which is a little over 1% of the total loan amount.

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Stafford Loans, both subsidized and unsubsidized, are ideal for new borrowers and students with less than dazzling credit. And their flexible repayment choices and fixed interest rates are feasible for any student.

PLUS Loans

The main distinction between a PLUS Loan and a Stafford Loan is that this one involves a credit check. The other distinct difference is the origination fee, which rises to 4.248% on PLUS loans, all along with higher interest rates.

To be eligible for a PLUS Loan, you’ll require a decent credit score or an endorser. There are two kinds of PLUS Loans, underlined below:

GradPLUS Loans: Federal loans created for professional and graduate students who have some credit history to stand on. They offer you an opportunity to access funds beyond your financial assistance package to cover the cost of tuition with deferment until after graduation.

Parent PLUS Loans: Designed to help parents (adoptive, biological, and stepparents) pay for their dependent children’s college, these loans are paid while the student is in school, with the choice to apply for deferment.

PLUS Loans come with the repayment advantages that make federal loans likable, so they could be a choice if you still require funds outside the aid you’ve been granted. But normally, Stafford Loans should be your first preference with their low rates and origination fees.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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