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 The new service aims to offer a more affordable alternative to
would-be doctors and dentists than what they typically access
through the U.S. government, Peter Wylie, vice-president of
in-school lending at CommonBond, said in an interview.
Students will be able borrow up to the cost of attendance each year,
with no co-signer required, at fixed and variable interest rates
ranging between 5.56 percent and 7.06 percent, according to the
company's website. The federal government's Direct PLUS Loan has a
fixed interest rate of 7.6 percent.
New York-based CommonBond, which also offers student loan
refinancing, is one of several startups looking to upend the
traditional lending market by using technology to lower costs and
offer services that are less expensive and easier to use.
Other well-known online student lenders include SoFi and Prodigy
Finance.
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Founded in 2012, CommonBond has issued more than $2.5 billion in
loans so far and raised $130 million in equity funding from
investors including Fifth Third Bank and Neuberger Berman. Backers
also include former Citigroup Inc Chief Executive Vikram Pandit.
The medical and dental loans, which have durations of 10, 15 or 20
years, come after the launch of the startup's loans specifically for
MBA students, Wylie said.
As with other online lenders, CommonBond sells the loans to
institutions such as banks, but remains the first point of contact
for borrowers.
Earlier this year the startup laid off around 18 percent of its
staff, or 22 people, citing a plan to shift investment into new
areas such as growing its in-school business.
(Reporting by Anna Irrera in New York; Editing by Matthew Lewis)
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