simply by rsepulveda
simply by rsepulveda
Forget the Banks, make use of Peer-to-Peer Lending For acquiring Student Loans
Overview of Peer to Peer Lending
With the cost of college tuition rising every year, the government can no longer provide enough support to cover all college expenses. In addition with the ongoing credit problems, funding for student loans given by banks and other private organizations has nearly dried up or even become inaccessible. In the situations where students can obtain personal funding, interest rates can be as higher as 20%. Consequently, college students are desperately looking for other sources of funding for their schooling.
A relatively new alternative to authorities and banking loans will be peer-to-peer lending (aka p2p lending, social lending). along with peer-to-peer lending, borrowers can get loans directly from a swimming pool of private lenders. For students, peer-to-peer lending offers the promise associated with lower interest rates in comparison to conventional bank loans. The concept of peer to peer lending has been around for some time. It was initially used for funding tiny loans for entrepreneurs within developing nations to start companies. With almost perfect time, peer-to-peer lending companies possess emerged to offer help to all those in need of funding, whether with regard to debt consolidation, starting a small business, or even going to college.
Currently, there are two peer-to-peer lending businesses focusing primarily on student loans: Fynanz and GreenNote.
Fynanz offers repayment plans more than five, seven, or ten years depending on the dollar amount of the mortgage. Like a normal student loan, college students receive a grace period while in school and can delay primary payments for up to 2 years right after graduating. With Fynanz, college students can expect to receive a higher interest rate since lenders are assured 50% to 100% of the principal if the borrower fails.
GreenNote loans have a set interest rate that is equivalent to the current Federal Unsubsidized Stafford interest rate at 6. 8%, which is a much lower interest rate than personal or bank loans. They give college students a grace period of six months after graduation, and pay back is made monthly over a ten-year period. No credit authorization or credit score is needed given that agreements are made between the college students and people they know.
virgin mobile Money USA is another option for receiving loans if the college student has a network of friends or family willing to lend money. virgin mobile Money simply acts as a good intermediary by making the loan recognized and removing the psychological aspect of lending money in order to friends or family. Since the loan will be between friends or family, the loan conditions are completely flexible. The student and lender decide upon the interest rate and payments, not really Virgin Money. Expect to spend 9 to 9 to setup the loan, and an additional per month service fee.
Risk for Student Borrowers
For students, there are no actual risks with peer to peer lending. Either the students get funding or they are refused funding, like any other financial institution or federal loan they might apply for. A student’s mortgage will be funded if sufficient investors choose to fund this and the money is obtained up front. Lenders choose to account loans based on the attractiveness of the student’s profile. Naturally, if the student has a high grade point average, attends a prestigious college, and is majoring in a profitable field, lenders will be increasingly competing to fund the loan. college students without stellar profiles may try soliciting funding through friends, family, or co-workers. Allowing Virgin Money united states or GreenNote to manage the loan will make the process official and thus be a more attractive investment to the student’s friends and family.
What’s the particular verdict?
Peer to peer financing is an excellent option for students in need of money. Overall, peer to peer lending offers an alternative yet secure method for obtaining financing for college expenses past what federal loans, grants or loans, or scholarships can protect.