School loans and also student debt amounts have become something of an item recently. The debt level for university students and therefore graduates is exploding and most are looking at a multitude of options for financing their education. One option some might not be conscious of is community-based student loans, which are a lot like crowd-funding.
Associations all over
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based school loans that are being made to students heading off to university, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more specifics.
The donors get solicited for funds with "crowd sourcing," and the program is very comparable to that. Loans are given with the cash people put to the communal pot.
According to MarketWatch, it isn't even new; one such organization, the Canton Student Loan Organization of Canton, Ohio, has existed since 1922 and has lent $27 million to more than 5,000 students.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be paid back by the students.
Between federal and private
The community-based student loans fit between federal student loans and private loans on the subject of cost, according to Daily Finance, Bankrate and MarketWatch.
A loan from a community association, community bank or credit union is still a private loan, but it's generally lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all complaints made to the Consumer Financial Protection Bureau about school loans all on their lonesome.
Generally, federal Stafford loans have the very best rates. Private loans range dependent upon lender, but could be as high as 16 percent. Community-based school loans can range from zero-percent interest, from some organizations and generally top out, according to MarketWatch, at 8 percent from most institutions. However, they also usually come with harsher terms, as many have shorter repayment periods and some require collateral up to and including the parent's home.
Might not cover university
According to Bankrate, community-based student loans is probably not enough to cover the total cost of college, but just enough to cover tuition and books. Many of these organizations just do not have the money to lend the federal government or big banks do.
Credit unions likewise may be able to arrange some funding for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to find out more.
Associations all over
A recent Daily Finance article discussed a growing number of community associations springing up around the country, offering community-based school loans that are being made to students heading off to university, albeit without a lot of specifics. However, the MarketWatch article Daily Finance quoted did have a few more specifics.
The donors get solicited for funds with "crowd sourcing," and the program is very comparable to that. Loans are given with the cash people put to the communal pot.
According to MarketWatch, it isn't even new; one such organization, the Canton Student Loan Organization of Canton, Ohio, has existed since 1922 and has lent $27 million to more than 5,000 students.
Prosper is a crowd funded personal loans site. Just like those loans, these ones have interest and have to be paid back by the students.
Between federal and private
The community-based student loans fit between federal student loans and private loans on the subject of cost, according to Daily Finance, Bankrate and MarketWatch.
A loan from a community association, community bank or credit union is still a private loan, but it's generally lower-cost than going to Sallie Mae, which according to CBS accounted for 46 percent of all complaints made to the Consumer Financial Protection Bureau about school loans all on their lonesome.
Generally, federal Stafford loans have the very best rates. Private loans range dependent upon lender, but could be as high as 16 percent. Community-based school loans can range from zero-percent interest, from some organizations and generally top out, according to MarketWatch, at 8 percent from most institutions. However, they also usually come with harsher terms, as many have shorter repayment periods and some require collateral up to and including the parent's home.
Might not cover university
According to Bankrate, community-based student loans is probably not enough to cover the total cost of college, but just enough to cover tuition and books. Many of these organizations just do not have the money to lend the federal government or big banks do.
Credit unions likewise may be able to arrange some funding for university, though it might come in the form of a "personal loan for educational purposes." However, they also might lend at better terms than a private lender. Numerous credit unions are also, according to CBS, offering student loan consolidation programs. Each student and/or their parents will have to do their homework on community loan organizations and credit unions in their area to find out more.
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