With peer to peer lending and peer to peer student loans becoming increasingly popular within the student loan market, we hope this article will help answer some questions you may have regarding Peer to Peer Lending Student Loans. Peer to peer lending has been around for quite sometime, but with the internets sweeping reach, peer to peer student loan lending sites / companies have started to realize the large potential for this form of student loan lending.
Similar to private student loan lending, peer to peer lending of student loans offers privately funded student loans to those in need, with individuals replacing the typical banks and credit unions as the lender. Peer to peer lending and peer to peer student loans are not backed by the federal government, so it is still wise to seek out federal financial aid options (federal student loans) before considering peer to peer lending for student loans, as federal student loans will still offer the borrow the best student loan options.
So why would a borrower choose a peer to peer student loan or peer to peer lending over a private student loan? Unlike private student loans, not all peer to peer student loans or peer to peer lending is based solely on a borrowers credit score. For borrowers having trouble securing private student loans because of little credit history, a peer to peer student loan may be a bit easier to secure, and could potentially be offered at a lower interest rate than a private student loan. For those of you wondering what’s in it for the lenders, well the lenders of these peer to peer student loans can earn better returns than they would in a money market or savings account.
If you’re not sold on peer to peer student loans or peer to peer lending, you don’t have to be. Peer to peer student loans and peer to peer lending is simply another option for you to consider when it comes to funding your college education. Much like private student loans, peer to peer student loans will differ from one to another, so it is critical you clearly understand the terms and conditions of any peer to peer student loan or peer to peer lending site you are getting involved with. Speaking of peer to peer lending student loan sites, here are a few of the most popular: Fynanz, Greennote, Zopa, Lending Club, People Capital and Virgin Money.