Today, TuitionU relaunched, offering expanded offering for student loan funding, and incorporating the P2P lending platform GreenNote into its program. One of the most intriguing things about the new TuitionU is that credit unions are in on the act. Credit unions have not traditionally been part of the student loan scene.

Brian Cox, the Chief Busines Development Officer on the project, told me that he is very excited about involving credit unions. “Credit unions often offer lower fees and interest rates to their members. Seeing them get into private student lending is great, since it provides a win-win.” Cox said that students who need access to better private student loans to close a funding gap win, and credit unions, who are looking for a younger customer base, have the chance to win more members.

In order to get a student loan this way, though, one has to be a member of the credit union. But TuitionU takes care of that as well. “We have a filter set up on the site,” Cox explained. “You put in your state, and then you can select available credit unions and read the membership requirements. If you qualify, you may need to put in five dollars to open an account. But then you can have access to what could be a much better loan. It’s definitely worth the small amount of extra effort.”

Cox said that some of the credit unions in the program have a very wide membership base, making it easy to join. “The NASA credit union is a good example,” he explained. “For five or 10 dollare you can join one of the NASA societies — which are open to anyone — and then you can be a credit union member.”

For those who still don’t qualify for private student loans through banks or credit unions, it is possible to use the GreenNote P2P lending platform. The student loans work, for students, just like those you get through federal programs, with lower interest rates, 10 year repayment and a six-month post-graduation grace period. TuitionU also offers college funding options through federal programs and school payment plans.

Post from: EveryJoe

TuitionU: Student Loans from Credit Unions

If you are interested in P2P lending, you might consider reading The Complete Idiot’s Guide to Person-to-Person Lending by Curtis E. Arnold and Beverly Blair Harzog. This book is easy to read, and organized in a way that makes sense. And it provides great information on the P2P lending industry, federal rules and regulations regarding lending and P2P finance, tax matters and managing a portfolio that includes P2P lending.

I especially liked the chapters that reviewed the main players in the P2P lending world. Arnold and Harzog addressed Prosper, Lending Club, Kiva, VirginMoney, Fynanz and GlobeFunder, as well as other P2P lending sites. It made it easy to see who benefits from these programs, and whether you are likely to be a target market. The book provides insight on how to borrow money through P2P lending, helping you learn how to attract lenders with your listing to get the funding you need.

Overall, The Complete Idiot’s Guide to Person-to-Person Lending is a valuable resource, and one that can help you learn a little bit more about this up and coming way to either borrow money, or lend money to others as an investment.

Post from: EveryJoe

Book Review: Person-to-Person Lending

Of course, you sort of do that right now. When you put money into a CD or an interest bearing bank account, you are essentially lending the bank money. The bank pays you a yield (often small) for keeping the money there and lends the money to others at a much higher rate. With the new scheme introduced by Prosper, though, you could fund bank loans.

Here’s basically how the process would work:

1. The bank gives out a loan, as usual (the bank will have a limit of $25,000 for loans it wishes to list for funding).
2. After the bank has received three on-time payments, it can offer the loan for bid on Prosper.
3. Investors can partially fund the loan, as P2P lending generally works.

The idea is to provide a place where banks can sell their higher-quality loans. It is an interesting idea, providing a sort of secondary market for regular folks.

What do you think? Would you buy a loan from a bank?

image source: sxc.hu

Post from: EveryJoe

P2P Lending Could Come to Banks

Betty C.

Congratulations! I’ll be emailing you shortly with the details of how you can collect your $100 from Lending Club.

Thanks everyone who left comments and entered the contest. Hopefully, at the very least, you all learned about an interesting new opportunity through P2P lending.

Post from: EveryJoe

Winner of Lending Club $100

1. Leave a comment on this post by 11:59 p.m. Eastern Time this Friday, March 13, 2009. Make sure you have a valid email address, or I won’t be able to contact you — if you win.
2. Sign up for Lending Club. It’s free. But you need to have an account, so that if you are the winner, your $100 can be added to your account. I suppose you could leave a comment, and then sign up if you win :) If you never use the account, that’s fine. You do not actually have to go through the “funding” process in order to have an account when you initially sign up. If you are already a member of Lending Club, you can still win the $100.

One winner will be chosen at random from the comments on this post to win the $100 account credit at Lending Club.

What is lending club all about?

With the economy making it difficult to get approved for loans, many people are turning to P2P lending. Lending Club is one of many P2P sites (like Prosper or Green Note) that offer ordinary people the chance to lend money to their peers in small chunks. It is possible to get loans for credit card consolidation, business expansion, auto loans or money for a down payment on a home. I gave it a try when I was approached by a representative of Lending Club.

$50 was placed in my newly-opened Lending Club account for me to try it out. Turns out that I enjoyed it so much that I actually added my own $50 (via PayPal) to do a little more funding. Here’s how it works if you want to invest:

• You look through loans requested from borrowers.
• You choose to fund part of the loan by buying $25 notes.
• You receive a portion of the interest earned on the loan, plus repayment of the principal that you lent.

The nice thing about Lending Club is that you can browse available notes and limit who you lend to. If you are more risk averse, and don’t mind getting a lower return, you can restrict your search to those with only A or B rated credit. If you have a little more to risk, you can earn higher returns by funding someone with lower credit ratings. Of course, the lower the credit rating, the higher the risk of default — so you could lose your investment.

Lending Club includes payment history information, risk information, and allows you to pose questions to the borrower. This helps you make a more informed decisions about whom you lend to. All of this is done without divulging telling personal information about the borrower.

Overall, I found Lending Club fairly easy to use. The interface is straightforward, and you can decide how many notes you want to buy — as long as you have at least $25 in your account. I like that you can use PayPal to fund your account, and the ease (in theory — since I haven’t started receiving payments yet) with which you can withdraw money from your Lending Club account when you start receiving your portion of the payments on the loans. It is also possible to reinvest your earnings fairly easily.

Since I’m the cautious sort, I’ll give it some time before I add further funds. But if my current notes yield some returns, I’ll probably start devoting a portion of my monthly earnings to notes at Lending Club as part of a long-term savings plan.

Do any of you have experience with Lending Club or other P2P Lending? Remember to leave comments by this Friday night in order to be eligible for the $100 giveaway.

image credit: US government

Post from: EveryJoe

Lending Club: $100 Giveaway and Review

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