Monday, March 31, 2008

Guarantees for Lenders, More Bids for Borrowers

A word about guarantees…

Unlike some other people-to-people lending sites you may be familiar with, we treat lenders differently. At Fynanz, we will guarantee a portion of the amount that is lent. If you read the posts below, you already know about FACS grading. The higher the FACS grade, the more of the original amount lent we will guarantee, up to 100% for our Platinum Honors grade.

The idea here is twofold. 1.) We directly address the primary concern of anyone who has ever lent money on a people-to-people site by making sure that at least a portion of a lenders initial outlay is protected. 2.) As veterans of the student loan industry, we have enough confidence in our FACS grading to guarantee up to 100% of any amount lent at our Platinum Honors level. Check out the chart below for more detail:

Additionally, unlike some other people-to-people lending sites, lenders are not responsible for paying collection fees on those loans that are delinquent but not in default. These will be paid for by our Default Prevention and Guarantee fund that has been capitalized by Fynanz and will be continuously funded by a 1% rate addition added for each borrower. Even with this rate addition, most borrowers will find that their rates are very competitive with traditional private student lenders. Borrowers are also eligible to have this 1% rate addition removed as soon as 10% of the principal balance has been repaid.

Neal Coxworth
Director of Marketplace development

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