SoFi and CommonBond are two of the biggest players in the student loan market. While the two lenders have a lot in common, they also have some slight differences. Let’s begin with a quick overview of their undergraduate and graduate student loans. That’s where consumers will notice the biggest differences between the companies. Then we’ll look at the refinancing options available with these two lenders.

Loans for Undergraduates and Graduate Students

Both lenders provide higher education financing for graduates and undergraduates, but they do so differently.

While CommonBond offers undergraduate and graduate student loans, SoFi offers loans to parents. These parent loans allow parents to take out money to finance their children’s educations. These loans are different than Federal Direct Parent PLUS loans.

Overview of the Private Loan Options 

CommonBond offers both variable and fixed interest rate loans for its graduate students. Variable rates currently range from 3.18 to 9.05 percent APR, and fixed rates currently range from 5.49 to 9.67 percent. Undergraduate loans have rates that range from 3.18 to 9.21 percent. Both of these loans are available for 5,10, or 15 year terms.

If lacking a credit history, students should have a creditworthy co-signer to qualify for one of these loans. However, co-signers can be released after two years of on-time payments.

While SoFI doesn't offer private student loans to undergraduates, SoFi’s parent loans are available with both variable and fixed rates. Variable rates currently range from 3.79 to 7.215 percent APR. Fixed rate loans currently range from 4.25 to 8 percent APR. Since parents are taking the loans out, a co-signer is not required, but it’s still possible to use one.

SoFi and CommonBond both offer these loans without prepayment or origination fees.

Student Loan Refinancing 

Both companies shine when it comes to student loan refinancing. Let’s look at some of the similarities and differences between these two companies when it comes to refinancing.

Interest Rates

Sofi and CommonBond both offer variable and fixed rates for student loan refinancing.

CommonBond’s variable rates currently range from 2.82 to 6.75 percent APR. Fixed rates currently range from 3.35 to 7.12 percent APR. Both fixed and variable rate loans can be refinanced for 5, 7, 10, 15, or 20 year terms.

CommonBond also offers something called a hybrid rate. Hybrid rates currently range from 3.78 to 6.22 percent. With this option, rates are fixed for the first five years. Then they are variable for the next five years. These loans are only available in ten-year terms.

SoFi’s variable rates currently range from 2.75 to 6.84 percent APR. Fixed rates currently range from 3.25 to 7.50 percent APR. SoFi does not offer a hybrid rate.

Underwriting Criteria

People need a minimum credit score of 660 to refinance with CommonBond, although most borrowers have credit scores of 750 or higher. They also must at least have a bachelor’s degree to refinance. CommonBond does not have job or income requirements. However, the median income for borrowers is $105,000.

PNC | The Student Loan Report Review Series

SoFi approves people with slightly lower credit. Borrowers need a minimum credit score of 650 to qualify. Although, the average borrower does have a credit score of 766. Borrowers also need at least a bachelor’s degree to refinance with SoFi.

SoFi also requires that applicants have a job or an offer. They must start within the next 90 days to qualify for refinancing. They need to have proof that an offer has been extended before they’ll be accepted.

Loan Amounts

CommonBond refinances loans from $5,000 to $500,000. SoFi also has a minimum amount of $5,000, but it allows borrowers to refinance up to the full balance of their student loans, regardless of how high that balance is.

Loans Eligible for Refinancing

Students can refinance undergraduate, graduate, and Federal Parent PLUS loans with CommonBond. Parent PLUS loans can be refinanced into the student’s name. That means the parent is no longer responsible for the loan.

Borrowers can refinance private and federal loans with SoFi. That includes loans previously refinanced with the company. In addition, students can refinance Parent PLUS loans into their own name when they refinance with SoFi.

Benefits and Drawbacks

Both companies offer some benefits when it comes to refinancing. CommonBond has a forbearance period of up to 24 months, and a co-signer release is available. It also doesn’t charge origination or prepayment fees.

However, CommonBond is only available in 44 states and the District of Columbia. Borrowers in Idaho, Louisiana, Mississippi, Nevada, South Dakota, and Vermont must look elsewhere.

SoFi also doesn’t charge origination or prepayment fees. Borrowers can also get some career perks such as meeting with a career coach who can help with everything from their resumes to salary negotiations. The program also offers a six-month student loan deferment in exchange for connecting with mentors and investors.

SoFi also offers special repayment plans for medical residents as well as fellows. Doctors can enjoy low monthly payments during their residencies and fellowships. This makes it easier for them to complete their requirements. Then, when they finish with their residency or fellowship, they can make larger payments without feeling as much of a financial burden.

One drawback about SoFi refinancing is they do not come with a co-signer release option. Another thing to note is they are not available in Nevada.

A Final Look

Borrowers with high credit scores can benefit from a student loan or refinancing with SoFi or CommonBond. While both offer some loan options for undergraduates and graduates, the companies really stand out when it comes to refinancing. They make it easy to get lower rates on loans, which makes it easier for people to meet their payment obligations.