CommonBond is a student loan marketplace lender that was founded in November 2011 by CEO David Klein and CFO Michael Taormina. At the time, the two were first-year students at the University of Pennsylvania’s Wharton School MBA program.
The company officially launched in November 2012 with the intent to provide diverse loan options at more affordable interest rates to graduate students across the nation. The idea first came about after the founders became frustrated with the lack of student loans available to them during their graduate studies. CommonBond now offers loans for MBA students as well as refinancing for graduate education borrowers.
The company prides itself on its social promise and the CommonBond community as secondary benefits to refinancing. When a borrower’s loan is funded, a Pencils of Promise student will also be funded for an entire education year.
CommonBond only offers fixed-rate loans for students enrolled in MBA or dual-MBA programs, although they are looking to expand to other disciplines and institutions. Until recently, only students that are U.S. Citizens or permanent resident aliens enrolled in one of the 20 MBA programs in the CommonBond network are eligible to receive loans. However, CommonBond recently partnered with Prodigy Finance to offer loans to international students attending eligible schools.
Rates (valid as of September 3, 2015)
- 10-year fixed starting at 5.78% APR
- 15-year fixed starting at 6.09% APR
Rates include the effect of capitalized interest, a 2% origination fee, and reflect the full deferment payment plan option. Signing up for automatic payments allows for an additional 0.25% interest rate reduction.
Borrowers have the option to start making full principal and interest repayments while in school or to defer completely. If they choose the latter, there is a six-month post graduation grace period, during which borrowers are not required to begin making repayments. For borrowers that have already requested federal loans, but wish to explore CommonBond instead, there is a 120-day cancellation policy instituted by the Federal Government on federal loans.
CommonBond student loans come with a 2% origination fee, compared to the current 4.288% origination fee through Federal Direct PLUS. During repayment, borrowers can pay the minimum amount, or more without any prepayment penalties. Borrowers can receive a 0.25% interest rate deduction for enrolling in auto-pay. Co-signers are not necessary to apply for a loan from CommonBond; however, adding a co-signer with a positive and extensive credit history can help the borrower get approved and obtain competitive rates on their student loans. In case of hardship, CommonBond also has deferral plans for students suffering hardships.
As part of their social promise and creation of a borrowing community, CommonBond has also created a “CommonBridge” program for borrowers who are between jobs, giving them access to consulting opportunities at a mission-driven company. Additionally, borrowers can take part in social events, dinners, and professional networking opportunities within the CommonBond community.
Who should explore CommonBond?
Students at qualifying institutions should explore the MBA and dual-MBA loans offered by CommonBond if they are interested in saving money. Borrowers looking for an alternative to federal loans may want to consider taking an MBA loan through CommonBond, as rates are lower than federal Direct PLUS offerings. Keep in mind that there are certain federal benefits, such as income-driven repayment plans, that are not possible with CommonBond loans.
CommonBond has a unique and forward social mission and community approach across refinancing lenders. If these benefits are important to you, CommonBond may be your lender of choice.
Due to their limited eligibility, reviews of the private MBA loans offered through CommonBond are few and far between. On the other hand, review sites praise CommonBond’s refinancing product and the repayment options they offer to their borrowers.