2008 August | | P2P Lending, Peer to Peer Lending, People to People Lending P2P Lending News, Information, Borrowing and Lending Strategy

Green Note

Green Note

P2P student loans have exploded onto the scene this past year, due in a large part to a lack of availability of traditional loans. There has never been a better time for a p2p site to start offering student loan assistance, and Green Note is one of the newest entrants into the marketplace.

The concept here is pretty simple. A student signs up for the service and fills out a profile stating how much money they need for their education. They can either set up or join a community to try to get assistance. Emphasis is placed on inviting your own friends and family to your community, so it is not clear on whether or not you will be able to seek outside assistance for your loan as a borrower.

Once you have your network built up and you have people that are ready to fund your education, they go through the process at Green Note to fill out all of the paperwork. All loans carry a 6.8% fixed rate and will be due upon graduation. This could cause problems for those looking for an instant return on their investment, but the site is pretty clear about what lenders can expect.

We liked the fact that this site caters to students, regardless of their credit history. Basically, if your community feels you have merit, you’ll have a pretty good chance of getting funding for school. They also focus on having several people lend on one loan, which does spread the risk around quite a bit. It’s similar to going to a family reunion and hitting up all of your relatives for a few bucks, only a lot more organized.

There is a lot of protection here for lenders and we appreciated the fact that they are formalizing the P2P process to make it safer to lend. We would have liked to see a little more information on how collections are handled, but overall, it’s clear that Green Notes has everyone’s best interests at heart.

One very interesting point is that no co-signers are needed for a loan and that citizenship is not necessary. While this is terrific for foreign students that have decided to study in the US, it does raise some concern for lenders, especially if the student returns to their home country and it is impossible to reach them. There is a potential for abuse here, and this was probably our main concern. However, given that the site is still in formation, we’ll give them a chance to address this point.

Overall, Green Note is perfect for those that already have a good community of family and friends that are interested in lending towards their education. It’s not really meant to be a way to find new people to help with funding, but it does help bring these communities together and make the entire process of lending money a lot safer for everyone involved. It will be interesting to see how this site grows over the next few months and how well it is received.

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blog traffic exchangeVirgin Money is another the brainchild of Richard Branson, the well known entrepreneur that is behind a multitude of businesses, record labels and projects throughout the world. His belief is that everyone should have access to the money they need when they are trying to get money for a business or even for personal reasons. This is one of the latest entries into the p2p lending sphere and we were interested to see what they had to offer.

Unlike many of the current p2p lending sites, this one does not just focus on personal loans. Real estate professionals, small business owners and regular people can all use the site to get the money that they need. They are also developing a section for students looking to fund their education and these loans will soon be made available as well.

The interesting concept behind this site is that it isn’t strictly a lending community. Rather, it is a resource for p2p lenders and borrowers to take care of formalities and hash out loan paperwork. For instance, let’s say that your Aunt Sally wants to lend you money for a new car. Typically, there may be a little confusion over what kind of interest you would pay, when payments were due, etc… Virgin Money was made to make it easier for Aunt Sally to manage the loan and for you to pay it back.

So, in essence, borrowers will need to do all the legwork to find someone willing to lend them money, and then send them to Virgin Money to complete the deal. This is an interesting concept, and while it may not be as popular as the sites that connect lenders and borrowers, there is still definitely a need for a service like this.

Virgin Money acts as a manager for the loans, to make sure that both parties adhere to loan agreements. This makes it easier for lenders to get payments on time and helps borrowers keep track of everything to do with the loan. Since loans between family and friends do have a tendency to get a little messy, this site should make a big difference.

Quite honestly, we see Virgin Money as being more suited to lenders than borrowers. There is a lot more protection for a friendly family loan when you’re doing it through Virgin Money and they can assist borrowers in learning the ropes. While there are some services for borrowers, the main intent does appear to be to assist lenders in managing a loan.

We did like the fact that they provide legal agreements and help everyone set terms for a loan that are acceptable. One thing that we did not see was information on collections, so this is not clear as to whether lenders are on their own, or if they will have some assistance from Virgin Money.

Bottom line, before you think about lending money out to family members or a friend, it’s probably a good idea to use a service like this to make sure that you are protected.

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Borrow up to $25K. Rates as low as 7.00%.

CommunityLend.com is still in their beta phase, and has yet to fully launch yet, but they do have some interesting features that are already obvious. Like most p2p lending sites, they are striving to create an alternative to traditional bank loans, but they are also trying to take that to the next level by developing actual online communities both for borrowers and lenders.

The premise of CommunityLend is that the more competition there is for your loan, the less interest you’ll have to pay. This should really appeal to those who are trying to save money on their loans, or have been turned away by traditional lenders. While there information is not yet complete, it does appear that the site will be catering heavily to borrowers.

Lenders however will still be taken care of. We appreciated the fact that they pointed out that only a select few are allowed to take advantage of the benefits of lending in the traditional standard. By creating this type of site, they hope to open up the billion dollar lending industry to smaller investors and groups that are looking for a solid way to make money.

While it is not yet clear if there will be any restrictions for borrowers, such as a minimum credit score, the site does appear to be trying to link up borrowers with very affordable loans. The main focus appears to be on small, unsecured loans for things like paying off a wedding or managing debt, but it could conceivably be used for cars, student loans and other financial needs.

The online community feature is quite interesting and appears to be centered around the goal of bringing charitable and local organizations together online, where they will be able to reach out to those in need. Once communities are created, they are free to get new members to join, and there will be features for discussion, learning and more.

The company has already arranged for multi-million dollar funding and their About Page reads like a veritable who’s who in banking and interest business. We found their roster to be very impressive and it looks as though the company is going to be in very good hands. Even the best concepts can falter with a lack of leadership, and it appears as though CommunityLend should be able to avoid that issue.

There are no set launch dates yet, but the company has moved quickly since receiving their financing in December of 2007. Borrowers, lenders and communities can sign up for more information and news on when the official launch will take place. Given that they have built a very strong foundation so far, they should not have any problems succeeding in this market place.

We liked the ideals behind CommunityLend and wish them well on their journey to becoming a p2p lending destination. We’ll be watching with interest to see how they develop and carve out their niche in this competitive industry. It will definitely be interesting to see how they progress.

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