I’ve toyed with the idea of microfinance through such organizations as Kiva.org. Now that I’ve connected with Lending Club, I’m excited to be entering the world of P2P lending, and sharing my thoughts.

I don’t have all the details worked out, but when I do, I will post contest rules. Stay tuned, you may be the one to get $100 for use in a Lending Club account.

image source: Lending Club Web site

Post from: EveryJoe

Coming Soon: $100 Lending Club Giveaway

• Scholarship programs are usually supported through trusts that earn money from investments, and those haven’t been doing very well.
• Student loans are harder to get as the credit market remains tight and lending standards remain high.

So going to college is a popular option, but it is a bit harder to find the funds to pay for it.

Paying for college during a recession

Most people, when they go to college during a recession, do not have outside funds to help them pay for school. However, there are programs that can help students close the college funding gap:

• Microfinance is possible for some student loans.
• Get a cosigner if you can’t get approved for student loans (especially private loans) on your own.
• Join Upromise and apply for the recently increased scholarships. (You can also save up for college when you buy every day items. But it takes forever to accumulate anything.)
• Look for specialty and niche scholarships.
• Fill out your FAFSA early, so that you have a better chance of access to limited funds.
• Try to find work study (although this is becoming scarce as funding to universities is cut).
• Consider working part time and going to school part time. (There are part time jobs available. They don’t pay well, but $15 an hour is better than $0 an hour.)

Things are tough all over right now, and it only makes sense to do what you can to increase your skill set while waiting for things to turn around and the job market to recover. But you may have to work hard to find a way to pay for your skills upgrade.

Post from: EveryJoe

The Recession Sends More People to College — But How Will They Pay for It?

Students with active loan drives through GreenNote choose whether they wish to participate with the GreenNote Network of lenders. Unlike private bank loans or other traditional loans, GreenNote does not require students to have a credit report, co-signer or show proof of citizenship. The rate is fixed at 6.8 percent compared to private lending alternatives that typically carry a variable rate up to 20 percent.

Lenders can provide as little as $100 to the students they wish to support. GreenNote manages the entire process by formalizing the agreements for all its lenders into legally binding loans and handles all the details from loan documentation through repayment, making it simple and easy for lenders to loan money to students.

If you are facing a college funding gap — with cuts to education help from the government and the rising cost of tuition, books, room and food — it might be worth looking into whether microfinance can help you pay for college.

Image source: sxc.hu

Post from: EveryJoe

GreenNote Officially Launches Today, Helping Students Pay for College

Agarwal is the CEO of GreenNote, a new college loan provider (launching next month) that aims at using microfinance to close that college funding gap. “Up until now, students had to turn to expensive private loans to meet their needs,” he says.

The idea is that everyone has a social network. Students can take advantage of that by asking friends and relatives (and even complete strangers) to help them pay for college — and earn a return while doing it. Using the principles of microfinance, GreenNote allows students to borrow money for college from several people. And those people get a return, since interest is paid.

Here are the basics of the GreenNote microfinance college loan program:

• Students create a profile and share their funding needs.
• Visitors to the site (encouraged by students) can choose to help by contributing any amount — but it must be at least $100.
• The interest rate for the student is the same rate charged on Stafford federal student loans (currently 6.8%).
• Lenders earn a return on the loan.
• GreenNote facilitates the loan, from collecting the money and sending it to the college, to collecting payment from the borrower, to distributing payments to lenders. Fees are subtracted from the total the borrower gets (one time — 2% of principal) and 1% from the lender’s return.
• If they choose, lenders can waive interest payments or forgive the principal.

At first glance, this looks like an interesting way to close the college funding gap. Students get the money they need, and lenders can feel good about helping (and make a little money as well — although it won’t be much).

image credit: sxc.hu

Post from: EveryJoe

Using Microfinance to Close the College Funding Gap

Another way to make money from microfinance is to join person-to-person lending communities like Prosper. Prosper has been around for a while, and it exists by helping people connect with other individuals. Lenders make money on interest and fees (usually higher than what is made on micro loans to the third-world), and borrowers usually have the benefit of consolidating higher-rate debt, such as credit cards.

But, as with all investment, there is risk. When you make a loan through microfinance, you are putting your money out there. If the borrower defaults, then you have lost your investment. I suspect, though, that the default rate is higher on Prosper loans than it is on micro loans to those in poverty…

Post from: EveryJoe

Microfinance: A New Way to Invest