Overview:
GreenNote is a peer-to-peer lending service students can use to raise funds for education. Students tap their network of friends, family, and others. GreenNote handles fixed rate loans with 10 year terms.
GreenNote handles logistics of loan agreements, payment processing, and more.
How is GreenNote Different?:
GreenNote focuses on education funding only. Also, borrowers tap their network for money - they generally don't borrow from strangers or institutions (although it is possible for an unknown lender to help out).
You can also borrow from friends and family with Virgin Money. Virgin Money will set up, document, and service loans for mortgages, student loans, and other purposes.
Getting Funded:
To pay for school, you'll have to ask for money. GreenNote calls this process a "pledge drive", similar to drives you may have done in the past. They offer tips on how to ask for money, and who you might approach.
Credit Issues:
In repayment, your loans with GreenNote are reported to credit bureaus. If you fail to repay as agreed, your credit will suffer and it may be difficult to borrow in the future.
You do not need to have good credit (or any credit) to borrow at GreenNote. Your lenders decide whether or not to take a risk on you based on their knowledge of you and your relationship. You do not need a co-signer.
A loan through GreenNote may help you build credit if you've never borrowed before.
Maximums and Minimums:
You must borrow at least $1,000, and you can borrow up to your school's "cost of education". Funds may be used for tuition, fees, and housing.
Lenders must pledge at least $100 to help you.
Fees:
GreenNote collects the greater of $49 or 2% of your loan. In repayment, GreenNote collects 1% of the outstanding amount from payments to your lenders.
There is no prepayment penalty.
Of course you also pay interest on the loan, which goes to your lender (except for the 1% servicing fee above).
