Consumer complaint received 2018-07-12
Company: CommonBond, Inc.
State: TX
Product: Student loan
Sub-product: Private student loan
Issue: Getting a loan
Sub-issue: Problem with the interest rate

Complaint:
I put in an application to refinance my loan in XX/XX/XXXX with CommonBond ( www.commonbond.co ). I was given an offer for 2.57 % ( 2.82 % with 0.25 % autodebit discount ) on XX/XX/XXXX. I looked over the loans and compared with another lender and signed their documents on XX/XX/XXXX with the loan closing/disbursement on XX/XX/XXXX. 

My issue was that the lender was using interest rate quotes from XX/XX/XXXX when quoting me a variable rate on XX/XX/XXXX and then with final documents on XX/XX/XXXX still reflecting the rates from XX/XX/XXXX. Since I was comparing to other lenders using the current market interest rates ( either XX/XX/XXXX or even XX/XX/XXXX ), I was not able to make the best decision for my loan. Since this is a variable rate loan, I was curious as to why the company was quoting interest rates nearly 40 days only for my loan which if they used the current market rates, their rate would have been higher than competitors. 

The lender sent me a disclosure clearing stating in fine print, " Your loan has a variable interest rate that is based on a publicly available index, the 1-Month London Interbank Offered Rate ( LIBOR ), which is currently 1.92 % '' While this was true for all of XX/XX/XXXX, once XX/XX/XXXX arrive this was no longer a current rate. So this statement, the LIBOR is currently 1.92 % was false. 

I tried to resolve this with XXXX a manager at Commonbond and XXXX one of their representatives and they said they couldn't do anything. 

I checked on the website commonbond.co on XX/XX/XXXX today - and the company is still advertising the LIBOR at 1.92 % which is now 62 days old and thier interest rate quotes are consistent with a 62 day old quote. I think this is confusing to consumers when they are comparing offers as one company is using current interest rates and another company is using 40 day or 62 day old rates to quote a customer while other companies are at least updating the rate quotes every 30 days. 

I did not that the same website has XX/XX/XXXX LIBORs listed for other loans, so clearly they are updating parts of the offers and not other parts. I did print a PDF of the website on XX/XX/XXXX at XXXX central time for my records. 

Historically the Libor has moved as much at 1.5 % in a single 30 day period ( not recently, these larger changes were in the financial collapse in XXXX ). I believe because of this, it is negligent for a company to be quoting LIBOR interest rates >30 days old and certainly 40-62 days old is not acceptable. 

I would like to warn consumers to be very wary of when the interest rates are being quoted from as one company could use a current rate and another could be using 40-62 day old rates ( or more ) which could result in their loan disclosure being as much as 1.5 % different than what they were quoted. Again, this is with the knowledge that it is 1.5 % higher they are quoting it at 1.5 % lower. Commonbond thought when I was calling that I didn't like that the rate adjusted upwards, but the funny thing is it hadn't adjusted upwards ... the rate was basically the same as when I closed the loan - the upward rate adjustment had happend well before I was approved and well before I was quoted and well before my loan was closed and disbursed. My problem was with them quoting interest rates that are 40-62 days old and other companies not doing this - confusing customers. 

I uploaded the PDF of the XX/XX/XXXX webstie dislcosure showing them still quoting a XX/XX/XXXX rate. I also uploaded the TIL sheet showing an interest rate quoted around 40 days old.

Company public response: Company believes complaint represents an opportunity for improvement to better serve consumers
Company response to consumer: Closed with explanation