US students attending MBA programmes offered at Vanderbilt University, Olin School of Business at Washington University in St Louis, the University of Texas and the University of Washington will now also be eligible to apply for loans from CommonBond.
The lending platform already considers applications from 25 top-ranked US MBA programmes.
“One of the ways for our platform to succeed is to de-risk the model as much as possible,” says David Klein, co-founder and chief executive of CommonBond. “We have to identify in a very data-driven way which are those borrowers with high earnings prospects.”
Good earnings prospects mean the lending offering is also being extended to graduate students on more than 75 law, medical and engineering programmes in the US, says Mr Klein.
CommonBond was formed by David Klein and Michael Taormina, a fellow MBA student from Wharton in 2012. Both were saddled with student loans which proved to be the inspiration for the company. They started by raising $2.5m from Wharton alumni and by the end of the year had 39 borrowers.
Mr Klein says the company has now raised $100m and expects to have 1,000 borrowers by the end of December. CommonBond currently offers to consolidate multiple undergraduate and graduate loans into a single 10-year fixed-rate loan at a rate of 5.99 per cent over 10 years (as an example, it says this would equate to a monthly principal and interest payment of $110.97 on a $10,000 loan over 10 years), or 6.49 per cent over 15 years.
Borrowers can expect to be subject to the same credit checks that they would undergo for any other US loan.
Mr Klein says lending is limited to US citizens and US residents with good credit records. There are plans to expand to offer loans to international students attending CommonBond’s specified US programmes. Eventually it is considering extending the facility to cover US students attending programmes overseas.
CommonBond has gone beyond alumni to raise money from institutional investors to fund the loans.