CommonBond

The Good

• Low interest rates
• Range of term options (5, 10 or 15 years)
• Deferred payments while in school
• No prepayment penalty

CommonBond student loans operates a little differently than many lenders.  To be eligible, borrowers must have earned a graduate level degree or higher in a specific field of study such as law, medicine, engineering, or finance, among others. And that degree must have been earned from a list of schools CommonBond has preselected (don’t worry, it includes over 2,000 schools).  This helps them reduce their risk and offer competitive rates.

CommonBond rates start at just 2.93% with a 0.25% autopay discount. That is for the most creditworthy applicants and one of the lowest rates available.  There is a 2% origination fee, which is higher than the 1.066% origination fee for Direct Subsidized Loans and Direct Unsubsidized Loans and lower than the 4.264% origination fee for Grad PLUS Loans. However, since this fee is included in the CommonBond APR, we have not listed their origination fee as a negative.  It’s still a great rate with or without origination fees.

Common Bond is available in all 50 states with the exception of: District of Columbia, Idaho, Louisiana, Mississippi, Nevada and Vermont.  Finally, CommonBond allows borrowers to defer any payments while in school.  Borrowers can select from paying interest-only on the loans or just paying a minimum of $25 per month Once graduated, they can pay the loan early without incurring any additional payments or fees.  This is an especially important feature for borrowers who may not qualify for the lowest interest rate offered.

The Bad

• Co-signer required
• More difficult to qualify
• Only offered to US citizens or permanent residents

CommonBond requires a cosigner on all loans.  For many applicants, this will be irrelevant because they would require a cosigner to qualify anyway.  But for those who would qualify independently, it can be a negative. Having a cosigner means that any missed payments or decreases in the credit score of the cosigner after the loan is opened will impact the student.  And for students who don’t have a cosigner, CommonBond is not an option.

While the exact CommonBond underwriting criteria is proprietary and not posted publicly, it is safe to say that it is more difficult to qualify.

The Summary

CommonBond is a great option for those who qualify.  You need good credit, a good school, US residents only, and even good grades yelp.  But as mentioned, this means that if you do qualify, you can probably be assured a very competitive rate.