Monday, December 17, 2007

When Financial Aid Just Doesn't Cut It

A few days ago i wrote a short post on and the way that it, and a few other p2p companies, are changing the lending landscape. I mentioned using it to buy a new car, or TV, or to consolidate your debt, but i realized this weekend that i neglected to mention what may become one of p2p lending's primary purposes. It happened while i was sitting in front of the TV and one of those obnoxious Astrive student loan commercials interrupted my South Park viewing.

What would you do if you found yourself short on next semesters tuition? Astrive claims that its a better idea to cover your remaining costs with one of their loans than a high interest rate credit card, and i would agree. The issue though is that with an Astrive loan you could still end up with an interest rate of 10.5% and paying it off for up to 20 years...better than a credit card, but not exactly a great situation.

So, you point your browser over to our good friend Take out that 5 grand you need to cover the cost of textbooks or R&B and let everyone know why you need the money. Chances are pretty good that somebody looking to invest is going to support your goal to further your education and help you out. So, even though the interest rate might not be dramatically lower than Astrive (the lowest going rate on Zopa is 8.75%), you'll be getting a helping hand on the payment every month as well as cutting out any commercial bank looking to profit from charging you bogus fees.

My point here is, look around and explore your options, they're out there waiting to be found. Credit Cards always seem to be the "quick fix" for money issues, hopefully sites like Zopa, Lendingclub, and Prosper, will become a more viable options than an 18% credit card...or the military, for getting yourself an education.

1 comment:

Mike Templeton said...

My wife and I will be building a garage in the spring and Zopa may be a good option for financing it. I'd love to give it a try. We'll see how that goes when spring hits... :)