student loan

Studienaktie – P2P Student Loans with a Twist

wiseclerk

Studienaktie.org is a Swiss non profit association offering p2p lending to students. The name translates to student share and is rather fitting, since the concept literally allows the investor to invest in a student and profit from his career development. Unlike with other p2p lending platforms for students,  investors do not really give a loan, but rather buy a share offered by the student.

An example illustrates how this works out. A student might offer to sell you a share for 100 CHF (approx 97 US$) now while in return promising to pay you 0.25% of the annual salary he will earn in 2017. Meaning if his salary will be 80,000 CHF in 2017 the investor will be repaid 200 CHF for his share then.

So this is really a bet of the investor on the students career chances.  To help on the selection investors can browse anonymous dossiers of the students and contact them. Chances for a positive ROI a probably good since Studienaktie originated at the university of St. Gallen, which has an elite reputation. Studienaktie is open to students of other universities, too.

The contract is signed directly between investor and student and the payment is directly facilitated between the 2 parties. Studienaktie only provides the platform. Investors pay a yearly membership fee of 100 CHF to participate.

The aim of the non-profit organisation is to enable more and better education.

Fynanz – p2p loans to students

wiseclerk

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.