http://www.pertuitydirect.com/
Just received the following email…
Welcome To Pertuity Direct
Welcome! Thanks for signing up to receive updates about the Pertuity Direct launch.
We have been hard at work for the last two years, building a social lending business that is targeted toward busy people that would like to enjoy the high investment returns and low loan rates of peer to peer lending, but don’t want to deal with figuring out all of the ins and outs of optimizing the process.
We make social lending hassle free:
For lenders, your investment dollars are deployed and start to earn returns immediately
You get the safety of automatic diversification
If you want to withdraw your money early - not a problem, just a few click to get your money back
Our borrowers are rewarded for working hard to maintain good credit by getting approved and funded quickly with great, low rates
Welcome to social lending without the bidding, gaming or guessing. We handle all the work for you. You get all the benefit.
We are just a few short weeks away from launch and are putting finishing touches on everything so that you will enjoy your experience at Pertuity Direct. So stay tuned, we will be coming to market in September and will keep you in the loop.
The Pertuity Direct Team
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This year, it has never been more difficult to get a student loan, thanks to new federal regulations. Hundreds of lenders announced that they would no longer be taking part in federal loan programs and schools are struggling to try to offer loans directly to students. This opened up a huge marketplace in the p2p sector for student loans, and business is definitely booming.
Fynanz.com is probably one of the best known p2p student lending marketplaces in the business and they have built up an impressive track record. The process is actually quite interesting and so far, they have been very successful with placing student loans with those that need the help. In brief, a student will need to join the Fynanz.com community, and then set up what amounts to an online auction.
This auction details the student’s loan request, and further information about why they need the money. Once the auction starts, lenders in the community bid on the loans. In order to place an auction, Fynanz.com first has to verify the identity of borrowers and lenders, and will underwrite the loan request. After the auction is complete, the lender supplies the money, which is then disbursed by Fynanz.com to the student and the school of their choice.
The process goes quite quickly and it’s very easy to get everything set up. Fynanz.com uses something called FACS to assist them in underwriting loans. What this means is that students are ranked according to risk, and assigned rates. Academic scores count heavily on this, as well as the student’s background. For those under the age of 21, a cosigner may be required to complete the loan.
We found it interesting that Fynanz.com decided to calculate risk on an academic model rather than the traditional credit scoring model. Rankings range from 500 to 820, much like FICO scores, and if a student’s FACS ranking is below 640 they will not be able to arrange for a loan through the service. Apparently, the company has found that grades are a very good indication on whether or not the loan will be paid, and they have had a lot of luck using this scoring method.
At the end of the day, this is a very fair way to determine whether or not a student should have a loan. This removes any economic barriers between students and focuses on their actual academic performance. It will be interesting to see if this model expands beyond p2p lending and into traditional banking.
The higher the FACS score, the lower the interest rate, which is also quite fair. For students that rank in the top tier, the margin range is 2.5% to 3.7%. This changes to 7.2% to 7.9% for scores that are in the 640 range. If there was ever a reason for students to focus on their grades, this is a pretty good one.
Fynanz also provides either partial or full guarantees on the original loan amount. The guarantee percentage is dependent on the FACS Grade of a loan listing.
| Platinum Honors |
100% |
| Platinum Plus |
90% |
| Gold Honors |
80% |
| Gold Plus |
70% |
| Silver Honors |
60% |
| Silver Plus |
50% |
While in enrolled in school at least half-time, a borrower may choose between different repayment options:
- Deferred Repayment Option or academic deferment - while in academic deferment the borrower is required to make monthly $25 Good Faith Payments. The Good Faith payments made while in academic deferment help the borrower establish a good relationship with lenders and demonstrate financial discipline. A six month grace period is given after separating from school.
- Interest Paid Option – full monthly interest payments are due on the loan while enrolled in school. Choosing the Interest Paid Repayment option can save thousands of dollars in interest expense over the life of the loan, because the $25 monthly Good Faith payments will likely not be enough to cover the interest accrued on the loan.
In either option mentioned above, monthly principal and interest payments will be due once loan repayment begins. We realize that some students may not yet have found employment even after six months; therefore, borrowers may request to pay just the interest expense on the loan for the first two years of repayment, “Initial Interest Only” option.
We liked Fynanz.com’s methods and have placed 2 bids on listings as of this morning… One is a platinum plus and the other a gold honors…
They also have a very attractive lending bonus as well. $25 bonus once you successfully lend to a borrower (you must sign up with a referral link to receive the bonus and in doing so the referrer would also receive $25). A 3% bonus when you lend $3,000 (that is a minimum bonus of $90 on $3000 lent.) If you lend $3K and refer 5 people the bonus is retroactively increased to 5% in addition to the $25 per referral. This is a very attractive bonus offer and one that I encourage all RateLadder readers to consider.
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A few weeks ago Rob Garcia at Lending Club announced updates to the lending account management features. I apologize it has taken me this long to cover the update, but I have been busy at work and frankly without lenders having the ability to lend money I was lacking motivation. Well I got to it this weekend and so I thought I would give a quick writeup…
Monthly Statements
This has been a long time coming. On page 2 is exactly what I need in order to track Lending Club in Quicken the way I track Prosper in Quicken. Here is the information on that page for Jan 08 (more interesting than then months since the quiet period began.)
Lending Club Statement
Account Activity
This information is also now available via the account activity tab… Here is my recent activity…
Lending Club Account Activity
Creating Your Own Portfolio Views
This seems like it might be a good way to group loans so that loan performance could be compared by loan groups. It is up to the account holder to define the “portfolios”. This seems like a good feature for the large lender interested in dissecting their performance; however, there is a major thin data problem for any loan group of less than 35 to 50 loans minimum.
Other
There are some other change when it comes to traversing your account. basically around retrieving and sorting loan while on the Lending Club website…
My Conclusions
Statements were sorely overdue and I am glad to have them. When is this quiet period going to end?
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Doug Fuller on Friday announced that the debt sale has been called off and that Prosper was going to “apply post charge off collection techniques” to the loans in the sale…
The reason given for the cancellation of the sale is that highest bid without “unacceptable contract conditions” was only 1.5%, as opposed to the roughly 3 cents originally estimated.
When researching what these techniques might be I ran across this old (originally published in 1918) how to manual on collecting debt… I wonder if Prosper is going to employ The Sweating Process or The Awkward Call…
The Awkward Call
This is an unpleasant but frequently effective method of collecting bad accounts. A festivity is perhaps in progress at the debtor’s house. The collector, having ascertained this fact, calls, inquires for the debtor, and, if he can secure an entry, presents his account and insists on payment. The debtor naturally demurs. The col-lector insists more urgently and more loudly; the attention of the guests is attracted; and the debtor naturally finds the situation very embarrassing. If he be strong of mind and muscle he will occasionally make it embarrassing for the collector, and add to his friends’ entertainment by a number not scheduled on the original program. Barring such unhappy incidents, however, the final result of the call depends entirely upon the ability of the collector and the financial resources of the debtor. If the collector is persistent, and refuses to be daunted by threats or cajoled by promises, the money, in whole or in part, is very apt to be forthcoming.
The collector may vary this proceeding in several ways. He may present his bill when the victim is attending an entertainment in the house of a friend, or he may interrupt him in the middle of an important business interview. If the debtor is an employee, the presentation of the bill at his place of employment may be resorted to, but, as this might result in the employee’s discharge and thus incapacitate him from paying the debt, a threat of resorting to this measure may be more effective than its actual fulfilment.
The Sweating Process
This is another variation of the awkward call, and requires a collector of good conversational powers, considerable nerve, and, preferably, some physical ability. He calls with the overdue account at the debtor’s house, and simply stays there until he gets his money, or becomes convinced that no money is to be had. As may be imagined, the process is a disagreeable one for both col-lector and debtor. Argument, persuasion, threats, and discussion are all used according to the conditions, until either collector or debtor becomes exhausted and gives up.
This method, of course, requires some judgment in its use, and is available only with a certain class of accounts; but with these it is very effective.
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