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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Green Note, P2P Lending, Site Review
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2 comments ↓
Thanks for the write up. Specifically, let me address a few questions:
- students can choose to make their profiles public and hence broaden their own personal networks (alumni, groups etc)
- invited lenders can forward to other interested parties
- if student defaults, the loans will be sent to a third party collections company (similar to other consumer loans)
please see a success story:
https://www.greennote.com/abc7/
Since the borrower must find friends and family and the loans are at 6.8%, people lending will be people who know the borrower well, probably not people who are lending to a lot of people and hoping any defaults even out.
Though the news clip says that at least one stranger contributed to her loan.
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