Though the economy is steadily climbing back, a lot of people are still feeling the financial repercussions of the housing crash back in 2008. People all over the United States are looking for ways to minimize debt and expenses each month, and a lot of people are going into default with their student loans to avoid paying them. Going into default is problematic on a number of levels, and we definitely don’t recommend it. We do, however, recommend looking into refinancing your student loans to get lower monthly payments and a better interest rate. CommonBond student loans may be able to help you.
Aimed at graduate students, CommonBond was founded in 2013 to help students with MBAs, engineering degrees, medical degrees, and other high-priced educations to pay off their student loans as they got their starts in their chosen fields. According to co-founder of CommonBond David Klein, “Our core mission is to lower the cost of higher education.”
How Do CommonBond Student Loans Work?
Because they are a new company, working in an economy with majority of people with existing debts, CommonBond student loans are mainly focused on refinancing. However, new students can borrow from CommonBond too. Whether you’re refinancing and consolidating your existing loans or you’re looking for a new loan to finance your undergraduate or graduate studies, CommonBond wants to help you.
According to Klein, the company’s emphasis is and will remain on savings and community. They really want to help you get out from under your debt. But how? First of all, they provide refinancing services for up to $220,000 of loans. When you refinance, you’ll be able to choose between three types of loans: fixed, variable rate, and hybrid. With auto payment discounts applied, variable rate loans start as low as 1.93%; fixed rate loans start at 3.74%, and hybrid loans start at 3.99%. Compared with the current federal PLUS loan’s interest rate of 7.68%, those are some really great rates!
If you need money for school, you can take advantage of the savings, as well. Current students can get a loan for 100% of their tuition (minus other financial aid) at a fixed rate of either 6.24% for a 10-year payment plan or 6.74% for a 15-year payment plan.
Benefits of Borrowing or Refinancing With CommonBond
Along with some astonishingly low interest rates, CommonBond student loans also offer a few other benefits. There are no penalty fees for prepayment. If you want to get out of debt faster by paying down your principal as quickly as possible, you don’t have to worry about any hidden fees that will cost you money while you’re trying to save on your interest.
If you’re concerned about times of unemployment, going back to school, military deployment, or financial hardship, CommonBond offers deferment and forbearance options. Much like federal loans and very much unlike a lot of traditional private lenders, CommonBond will work with you and help you stay out of default on your loan for as long as you need to get back on your feet.
This is a very young company, founded by businesspeople and investors who know how crippling student debt can be. They have their eyes open to the current economic climate and know that high interest rates and strict repayment rules with no forbearance just won’t cut it anymore.
Refinancing and Consolidating Federal Loans
We would not ordinarily recommend refinancing or consolidating federal student loans with a private loan, but in this case we might make an exception. We don’t usually recommend it because to do this, you have to convert your federal loans to a single private loan, and you lose the low, fixed interest rate and the benefits of having a federal loan in repayment.
However, with CommonBond, because they believe in forbearance and deferment when necessary and because their interest rates are so much lower than even federal student loan interest rates, it actually makes sense. The application is all online and takes just a few minutes. Students can find out if they qualify for consolidation and refinancing, see the rate they qualify for, and move forward, all in just a few minutes.
A Different Model
CommonBond student loans actually work off of investments made by individuals and corporations. Even with low interest rates, investors see positive ROIs (returns on investment) almost immediately. Because of this crowdfunding-style approach to lending and refinancing, CommonBond has been able to get on their feet and going in just two years. We expect to see more students refinancing and taking out loans with CommonBond in the near future, and we would not be surprised to see more lenders following their model in the years to come.
Compare and Apply for Student Loans TuitionChart.com
TuitionChart.com works hand-in-hand with the best, most trusted names in private student lending to help students and their families find the money they need for college. Through use of comparison tools and loan searches, TuitionChart provides over 20 different loan options for students. TuitionChart.com is designed to help students and their families wend their way through the maze of financial aid information.