College Loans — Peer-To-Peer Lending May Just Be What You’re Looking For

By Hunter Fisher

Do you have plans of going to college, but are currently looking for ways to pay for it? Your answer may be waiting on the Internet! The World Wide Web is no longer just for homework — you can also use it to find great financing schemes for your education.

There are lending sites on the Internet that are now offering services to students who need financial help in their years in university. It’s definitely worth a look, even if you’re only looking for alternative sources at this point.

The Advantages

There are several credible sites that help students financially, and some of the more popular ones are as follows:

- lendingclub.com – The Lending Clubs lets borrowers take out loans of up to $25,000. The interest rate may vary from 0.75-2%, depending on your credit score.

- prosper.com – Prosper lets you take loans of $1,000 to $25,000 (The average Prosper loan hovers around $7,000). Interest is usually at 1-2%.

- virginmoneyus.com – Virgin Money is a fast online lending site, processing applications under three days. Interest, however, is a little higher at 6.5%.

- zopa.com – Zopa is another fast online lender, and doesn’t charge transaction fees.

The sites have a number of ways to help you raise the money that you need. Some sites provide services that are suited to family loans (Virgin Money). Some, like Prosper, facilitate funding by providing lenders a venue where your business is “auctioned.” You indicate how much interest you can afford to pay and lenders bid down that rate to compete for your business. For students, this is an extremely appealing option as there is a high potential of lowering interest rates to six percent or lower.

By offering student loans, lenders promote their services and get reasonable profits. In addition, they do the country a service by helping a student get the education he/she needs.

Drawbacks

Like most other loans, online lending sites have disadvantages. For one, students aren’t guaranteed the loans. Some lenders may charge higher fees than others. Some payment terms may also hurt the unsuspecting student in the long run. It’s important to know what you’re getting into before signing the dotted line.

Conclusion

At this point when online lending sites are still on an unpredictable rise, it’s still probably best to try federal loans first. There are many federal student aid loan programs that offer good interest rates out there.

If you do decide to borrow money from online lenders, make sure to evaluate all the sites just as thoroughly. If you have questions or are in need of clarification, then by all means, get in touch with officials from these online lending firms to get a clearer view of your choices.

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