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I’m going to make a shocking confession: Until a few weeks ago, I had no idea who Jon and Kate Gosselin were.
In fact, I made it a personal mission not to know. From the hundreds of headlines, I knew they had a reality show. Like most reality TV stars, I knew they were most likely famous for something insignificant. Yeah, I’m not a fan of reality TV. I’d like to hand TV scripts back over to real writers. When I watch Mad Men, for instance, I marvel at the brilliant writing as well as the acting.
Anyway, I visited my daughter at college recently and Jon and Kate came up in our conversation. I knew it was time, so I reluctantly decided to find out who the heck they were and what the heck they did to merit such fame. I wasn’t impressed.
So you can imagine how weird it feels for me to be quoted in an article that includes the Gosselins. This piece on WalletPop, How to avoid ‘pulling a Gosselin’ with family finances, offers good suggestions for coming up with quick cash when you’re in the midst of a divorce settlement. As co-author of (warning: shameless plug coming up) The Complete Idiot’s Guide to Person-Person-Lending, I’m quoted about the possibility of getting a P2P loan in such an instance.
Now, this scenario is possible, but on most P2P sites these days, you need good credit scores. If you have a score of at least 640, check out Prosper. But you’ll need 660 for Lending Club.
But make no mistake, Jon Gosselin would be turned down on a P2P lending website. These days, P2P lenders are just too smart to be taken in by a reality TV star. Lenders look at scores, debt-to-income ratios, the reason for the loan, and so on. But if you’ve got good scores and you’re in a situation where you can pay back the loan in the next few years, P2P lending is something to consider. Unless you’re a Gosselin, that is.
When I was researching my book on P2P lending, I came across Kiva and learned about microfinancing. If you’re not familiar with Kiva, it’s an organization that focuses on microfinancing, or microlending, which involves giving loans in small amounts. For instance, you might lend $25 to a woman in Paraguay who owns a farmer’s market. The borrowers are recommended by partner microfinance institutions, known as MFIs. There’s risk as there is in all things, but the stakes are pretty low.
You don’t gain interest from the loan, but you’re giving someone a better chance at a successful life. You do get back your $25 (at least, that’s the plan), so it’s not charity. Since the cost of living in some of these countries is so low, these small amounts can make a huge impact.
Yesterday I came across Vittana, an Internet start-up that offers person-to-person lending in the form of microloans to students in developing countries. It uses a similar MFI partnership to find deserving students. With Vittana, I see a great opportunity for young people to get an education. I write a lot about ways to pay for college, so this concept caught my eye. I think I’ll have my kids pick a student to sponsor. The holidays will be here soon and if you’re looking for a family project, consider lending money to a student profiled on Vittana.
At this point, you already know how much your child has in scholarship money and grants. Unless you’re an heiress/heir, there’s probably some disparity between your pocketbook and your kid’s college fund. Maybe you’re even still struggling to meet the tuition bill. And now, you’re faced with all the extra expenses to worry about. Things like books and dorm room furnishings.
First, check out yesterday’s post about surviving school expenses. I focused on younger kids, but you’ll still find savings tips that apply to college expenses, such as shopping on tax-free holidays. And also read my first installment of Paying for College that I wrote last month. I know many of you are still trying to make ends meet, so here are some extra money-saving tips for you brave souls who are determined to give your kids the education they want and deserve.
Money: Need more? I know it’s tough at this point to put together more funds. Try searching on TuitionU.com to find some options. From their homepage: “At TuitionU.com, we believe it can take a village to finance an education–-and our combination of traditional, non-profit, peer and alternative financing solutions is just that.” It’s easy to navigate and I think you’ll come across some private loan options at good interest rates. This site also offers P2P loans from GreenNote.com. GreenNote involves a bit of networking, but you can get a 6.8% fixed rate. In my book, The Complete Idiot’s Guide to Person-to-Person Lending, you’ll find more details on GreenNote as well as the scoop on other P2P lenders that are options for school loans. FYI: If you’re young and you don’t have a credit history or a cosigner, GreenNote is an option you should explore.
Books: Most colleges have an “official” bookstore and an unofficial one where students can buy used books. Encourage your kids to network and discover these sources for used books. Other options include cruising Amazon, Half.com, and craigslist for used text books. Candice Choi, AP personal finance writer, echoes the idea to go for used books, but also suggests renting books or going digital in “3 ways to save on college textbooks.”
Dorm furnishings: While you’re trying to figure out how to scrape together $32,000 in tuition fees, this is one of the things that gets tossed on the back burner. But now that the move-in date is close, you need to take care of this. Again, think used. Check out Facebook’s Marketplace for some cheap stuff. A quick search using “Dorm rooms” turned up extra-long twin bedding for $50 and a dorm fridge for $40. And I recommend reading Leah Ingram’s Suddenly Frugal blog post about 5 Finds for Furnishing a Dorm Room. Ingram offers great suggestions, including taking advantage of Bed Bath & Beyond’s “Pack & Hold” service, which allows you to shop near home and have the merchandise held for you at a store near your child’s college.
If any of you have tips to share, please do. It really does take a village to get kids through college these days.
My book, The Complete Idiot’s Guide to Person-to-Person Lending (with co-author Curtis E. Arnold; Alpha/Penguin) will be out on April 7. In case you aren’t familiar with this concept, person-to-person (P2P) lending involves a borrower requesting a loan on a P2P lending Web site. The borrower’s loan might then be funded by many different lenders, depending on the site and the lending platform. By platform, I’m referring to how the site delivers this service.
Now, on many P2P sites you can show a photo of yourself and plead your case for a loan. In my new book, I devote a lot of pages to conveying the right image on these sites. There’s a recent story in the Dallas News about new research that explores the impact of potential lenders taking a gander at your photo. This research, from Rice University and the University of Washington, predictably confirmed that a borrower’s appearance does matter to a lender. But the way it mattered kind of surprised me. It makes sense to assume that physical attractiveness would make a difference, right? Wrong!
Potential lenders looked at photos from borrowers on Prosper.com (a big-time P2P lender that’s currently in a quiet period). The researchers discovered that borrowers who looked trustworthy were more likely to get their loans funded. In fact, it didn’t even matter what the credit data said.
On the flip side, a lot of people use photos of something cute, such as their Yorkie or their newborn twins. It would be interesting to see some research on how using a photo of your dog or kids affects a lender’s perception of you. I really have seen a lot of successful loan listings where the borrower used photos of their pets or kids.
I guess the take-away here is two-fold. If you’re trying to get a loan from a site that allows photos, then get yourself a darn good photo. Don’t let your Uncle Bob take it unless he’s a professional photographer. And is it still a good idea to use a picture of your dog instead of your own photo? Well, I guess that depends on whether or not your Pug has an honest mug!
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