The world of peer-to-peer (P2P) lending keeps getting better. The latest entrant: Fynanz, a site devoted solely to P2P student loans. When the site officially launches later this year, users will be able to farm out their educational financial needs to friends, family, and most interestingly, to traditional student-lending institutions.
Here’s how it works: students log on, and specify the details of their loan (how much they need, desired interest rate, desired payment term, etc…). Fynanz then rates each potential borrower based on credit history and information gleaned from historical student loan records. Potential borrowers; whether they be friends, family members, or banks; then bid on the loan. The more potential lenders bidding for a given loan, the better the terms for the student. Fynanz will charge borrowers service fees that are comparable to those of traditional lending institutions, and the entire platform is built using the same characteristics as traditional lenders to ensure the preservation of educational loans’ distinct tax status.
In related news: Home Equity Share is another P2P lending site that specializes in fulfilling the needs of would-be home buyers. Other P2P lending sites include Zopa (US & UK), Kiva, Prosper (US), Lending Club (US), Boober (Italy, Holland), Smava (Germany), Community Lend (Canada), and PPDai (China).