Last updated on June 1st, 2019 at 05:07 pm
Commonbond caters to those who want to give something back and have flexibility in cases of economic hardship. They also offer a unique type of loan that combines benefits of a fixed and variable together.
When Commondbond co-founder David Klein was applying to business school, he was blow away by the high interest rates. This and an itch to build a business that could positively contribute to society spurred him and his co-founders to develop the platform.
- Offers a unique hybrid loan option – although you should make sure if that’s right for you.
- 3.69% – 8.07% APR Fixed Interest Rates (with autopay discount)
- 2.46% – 7.08% APR Variable Rates (with autopay discount)
- 4.28% – 7.02% APR Hybrid Interest Rates
- Up to 24 months of forbearance
- No penalties for prepayment
- 1:1 social promise – for each loan funded, they also fund the education of a child in need
- Terms of 5, 7, 10, 15 or 20 years
- No origination fees
- .25% auto pay discount
- Over 2000 Title IV schools are eligible to refinance with Commonbond
- Available in 44 states
In the constantly changing economy, job security is tough to find. The company I first worked for out of school started experimenting with outsourcing jobs for my position in about my 4th month there. That’s why Commonbond’s 24 total months of forbearance may be attractive to many recent grads. It should be noted, though, that those 24 months can only be used in 3 month increments. We have reached out and asked about the time needed between each 3 month forbearance window before you can start again.
Their 1:1 Social Promise may be appealing if you like the idea of helping a young child in the developing world to get an education. In their partnership with Pencils of Promise, Commonbond pays for a young child’s education each time a person refinances their loan. So far, over 1 million has been donated by Commonbond and the Pencils of Promise program has built over 500 schools through their work.
A very unique offering that they bring to the table is the option for a hybrid loan.
The hybrid loan from Commonbond comes with:
- A 10 year repayment term
- A fixed rate for years 1-5 of the loan
- A variable rate after the fifth year until its fully paid off
Getting a hybrid loan brings 3 major benefits in Rate, Risk and Monthly Payment.
Borrowers receive a lower fixed rate than with Commonbond’s 10-, 15-, or 20- year fixed rate products.
The first five years of the loan are risk-free and rates stay the same. Their average borrower has a typical loan significantly paid down by the time it changes to variable.
Monthly payment is lower than their 5-year products.
APR for hybrid loans ranges from 4.28% – 7.02% (with autopay ACH reduction included), variable rate is capped at 9.99% and the variable rate margin is 2.64%-4.43%.
Borrowers must meet certain requirements to qualify:
- Credit score: 660+
- Cosigner required, but, can be released after 36 months of consecutive online payments
- Must have a current address in one of these states. Refinancing is not available in Mississippi, Nevada or Vermont
- Must be a current graduate with a bachelor’s degree or higher
- Must have attended a Title IV school
- Must be a U.S. Citizen, permanent resident, or H1-B, J-1, L-1, E-2, or E-3 visa holder
Rates and terms for their fixed and variable offerings are about average throughout the industry. In order to provide rate estimates, they perform a soft credit pull. It will not show up on your official credit report or reduce your credit score in any way. There are no penalties for prepayment or origination fees. Their current rating with the Better Business Bureau is an A-.
On Glassdoor, current/past employee reviews are largely positive of working there. The only major complaints people have are about the hectic atmosphere that almost every startup typically has.