There's a lot to consider before you make the switch from federal student loans to refinancing with a private lender. Everything from understanding who the major players are in the industry to finding out what rate you qualify for are all big factors that can help guide your decision. But what if you get past the basics and it's still a tough choice? It may be time to look at the company's values and social mission.
This was the case for me in 2016 when I finally decided to refinance. At the time, I was working as a communications manager and living on a modest nonprofit salary. My husband and I decided to start side-hustling to pay down the $60,000 in loans I accumulated after graduating with a Master's of Communication Management in 2009 from University of Southern California. Any extra money always went towards the loans which helped, but also felt discouraging. Every month, only a fraction of my payments went toward the principal, thanks to a high interest rate.
After reading about refinancing, it seemed like a good option, but I was a little doubtful since the industry was still relatively new to me. I threw myself into learning all I could about refinancing, and then finally decided to go for it. I put in my "soft" application with three of the top lenders (CommonBond, Earnest, and Sofi), and found they offered pretty comparable rates and terms. I needed something else to help me make my decision.
Ultimately, understanding what a company stands for in the world influenced my final choice. I found if everything else is pretty comparable, I feel more comfortable supporting a company that does social good. So, after digging a little deeper into each lender, I discovered CommonBond's social mission. This really made CommonBond stand out and it eventually cemented them as my choice for refinancing.
Here's what made CommonBond stand out for me::
A 1:1 Model with Pencils of Promise
CommonBond has a 1:1 social promise: "For every loan we fund, we also fund the education of a child in need." Education can have a profound impact on an individual. It did for me. So the thought of giving someone else educational opportunity really hit home for me. I was also glad to see CommonBond partnered with Pencils of Promise, a well-respected organization known for bringing educational opportunities to the developing world. Each month I feel a little better about paying my loan because I know my decision to refinance is having a real impact on someone else in the world.
A clear desire to fix a broken industry
On CommonBond's website, the company has a clear message about building a better student loan and making a difference in the lives of its members. CommonBond's story began with three Wharton MBA students who used their own experiences with student debt as the spark to create a better solution to the current (broken) student loan system. Team members are also featured front and center on the website, paired with messages about wanting to change the industry and improve people's financial well-being. I liked the way CommonBond leads with their people and the why behind the work they are doing as a powerful point of connection.
Treating me like a human, not a number
Before I found CommonBond, I dreaded calling my student loan servicer with questions or changes to my account. Each phone call felt like I was navigating miles of red tape just to talk to a real person. When I finally reached someone in customer service, the conversations were transactional and disheartening. Compassion was nonexistent. When I refinanced with CommonBond, the customer care team actually wanted to help whenever I had questions. They responded with clear, easy-to-understand information within a day or two, and many times within hours. It feels great to know I'm treated like an actual human, not just a number in a sea of student loans.
Becoming part of a community
Here's what else struck me about CommonBond: They are intentional about building community and connecting their members. Even the use of the word "members" hints at belonging to something bigger. We're not just customers, we literally have common bonds: the pursuit of education, the decision to invest in our future, and the desire for financial freedom. CommonBond's events are the perfect opportunity to explore these bonds between members. I really like seeing photos on the company's Facebook page, from events centered on entrepreneurship, women in tech, and career exploration.
Today when I think about how hard the decision was to refinance, I laugh a little. I put in hours of research and worry, but the truth is CommonBond always came up as the best choice for me. Competitive rates, an easy-to-navigate website, and great customer service were all fantastic reasons to choose CommonBond—but the social mission is what I feel the best about today. Just two years later I've made huge progress on paying off my student debt and I was able help others in the world during the process. For me, that's definitely the best possible outcome all around.