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Fynanz – p2p loans to students

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Fynanz.com, currently launching for borrowers in New York and Florida, offers peer to peer lending to students.

Fynanz 

The service differs from other p2p lending service in many points.

  1. The private student loans, also known as "alternative student loans", Fynanz offers have variable interest rates. Other p2p lending services so far operate only with fixed interest rates. At Fynanz interest rates are based on the LIBOR index, adjusted quarterly, plus a margin which is set by lenders. Suggested margins are 3 to 7.5% for a typical overall interest rate of 6 to 11% before fees.
    This is higher then federal student loans, but Fynanz still sees a large market, since federal student loans have borrowing limits and may not cover the entire costs of education.
  2. Very long loan terms of 10 to 20 years. Again unsual, but lenders may offer to sell loans after one year at a discount to Fynanz. There also seems to be the option to transfer a loan to a different lender (allowing the sale to a different lender).
  3. Students can select to defer interest payments while in school and for a 6 month grace period after leaving school.
  4. Loan amounts range from 2,500 to 20,000 US$ per loans. Borrowers may take out up to four loans per year to a total maximum of 160,000 US$. That is an unprecedented amount in p2p lending.
  5. The fees are pretty high in my opinion. Borrowers pay 2.9, 4.9 or 6.9% (depending on FACS) of the loan amount origination fee. Addionaly borrowers pay 1% guarantee fee into the guarantee fund until they have repaid 10% of the loan amount. Lenders pay a 1% servicing fee (not while loan is in deferment)
  6. Guarantee for lenders. Not only in case of identity theft, but also in cases of defaults Fynanz protects 50 to 100% (depending on FACS grade) of the loan amount.
  7. Fynanz applies it's own FACS grade (Fynanz Academic Credit Score) to rate borrowers. It not only relies on the credit history but also on academic charateristics.
  8. Pledge bids allow lenders to bid without having funds in account. Lenders must transfer money within 5 days of bidding.
  9. Fynanz has a "bid priority" that ranks four types of types of lenders in the following order: the highest priority lenders are friends and family of the borrower; then alumni of the borrower’s school; third are unaffiliated lenders; and fourth is Fynanz itself.

Hollowoak has some more interesting points from the lender agreement in his blog, which Chirag Chaman, Fynanz CEO commented on.

To browse listings go to the Fynanz listings page.

Further information ressources include Tom's review, the comprehensive FAQ and the new Fynanz blog answering questions.

Overall it will be interesting to see how Fynanz develops. If you use Fynanz as a lender or borrower please share you experiences in the forum.

Three p2p lending players competing in Poland

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In Poland there will be three p2p lending services competing for borrowers and lenders:

The services are positioned quite differently, with different minimum loan sizes ranging from 500 PLN (approx 200 US$) to 3,000 PLN. Furthermore Finansowo appearantly will not do any credit score checking and "will not touch the money", so apparently payments need to be conducted directly between borrower and lender. 

All sites target a young audience aged 22 to 34 and think that Polish customers are open to new ideas.

(Source: Virtuous cycle)

Kokos – p2p lending in Poland

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Kokos.pl launched the first p2p lending service in Poland. I interviewed Dorota Janik, PR Manager of Bluemedia, about the new service.

P2P-Banking.com: Can you please describe Kokos?

Dorota Janik: Kokos.pl is the first p2p lending or social lending system in Poland. It opens new possibilities in e-finance industry and fills a niche between offers of banks and other financial institutions.

The main advantage of Kokos.pl is being able to offer a much more beneficial interest range for both the lenders and borrowers, and a higher level of security than on other web based auction systems.

The most stress has been put on the borrower verification process. Kokos.pl uses Biuro Informacji Gospodarczej (BIG) to check borrowers credit history and to assign their rating in the system. Continue reading →

IOU central launches p2p lending in Canada

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IOU central launched the first active p2p lending service in Canada today. Borrowers can request loans from 1,000 to 25,000 CAN$ and select a term between 1 and 36 months. IOU central allows the borrower to specify a minimum amount at which he will accept the loan, should it not fully fund in the 2 weeks listing duration. IOU Central pulls the TransRisk credit score of the borrower, provided by Transunion Canada. According to the press release, lenders can expect to earn interest rates between 5 and 25 percent.

Borrowers pay a closing fee ranging from 1 to 3 percent depending on their credit score. Lenders pay an annual servicing fee of 0.5 percent of the open principal balance. Only Canadian residents can borrow or lend. The borrower needs to have a Trans union credit score.

Borrowers may have several loans, but the total outstanding principal may not exceed 25,000 CAN$.

Lenders earn interest on deposited money (bank prime rate minus 2.5%). Individuals may lend up to 5 million CAN$. Corporations may lend up to 50 million CAN$. Minimum bid amount is 25 CAN$.

Studying the team of IOU Central I noticed Robert Bialek (VP Technology) and Arkadiusz Hajduk (Product Manager), which were the founders of FairRates.dk, a p2p lending service in Denmark, which now is part of IOU Central. An assumption would be that IOU Central acquired (or merged with) the company, to gain the knowledge and experience made.

The IOU Central launch did beat Communitylend in being first in the Canadian market. Communitylend has long announced to launch a Canadian peer to peer lending service, but has not launched yet. 

To discuss IOU central, the lending or borrowing experience or to ask questions on the service you can use Wiseclerk's IOU Central forums.

(Link)

More p2c lending

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German startup Valuna.de wants to help companies to raise capital through loans from private investors without a bank. The first offer is by printing service QuickPrinter which offers 15 percent interest for a 7 year 100,000 Euro loan. Minimum amount for investors is 100 Euro. The platform Valuna offers marketing, but does not handle the financial transactions which are conducted directly between the lenders and the company. More information in an detailed article on the Valuna launch (German language). 

Globefunder announces launch of peer to peer lending in India

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Globefunder announced the launch of Globefunder India, which it claims is the first p2p lending service in India.

GlobeFunder India is now up and running, making us the first online lending marketplace to establish operations there. If you are a lender in India, the good news is that you will soon have a way to capitalize on one of the most vibrant and fastest growing economies in the world.

I checked the website. "Up and running" does not mean that you can register as a lender or request a loan so far. In fact borrowers will not use the website in the Globefunder India process:

While in the U.S. lenders can access borrowers directly, in India the sheer size of the lending market and the regulatory environment necessitate a slightly different approach. In partnership with global managed services provider Intellecap and some of the leading banks in India, GlobeFunder India links lenders and borrowers through a network of well-established Micro Finance Institutions (MFIs).These MFIs are rated based on their credit worthiness similar to individual borrowers on the U.S. GlobeFunder marketplace, and these MFIs in turn work with individual borrowers through their extensive on-the-ground networks.

According to Globefunder there is an unmet loan demand in India of 40 billion US$.

If you are an Indian resident and use Globefunder India, please share your experiences in the Globefunder forum of Wiseclerk.com Thank you.