"These rates are very comparable to private loans," and might even be better, Chaman says.
Lenders are attracted by the rates, but aren't seeking to make the most money possible, he adds.
"It's a different kind of lender," he says. "It's someone who says, 'I want to help students. I want to build a future for them.' "
David Smith is a Fynanz lender. The Chicago financial analyst recently lent $50 to a student. Smith has about 500 outstanding loans totaling $23,000 on another peer-to-peer lending site.
"It's a diversification tool," he explains. "And the returns are pretty decent." Plus, there is satisfaction of helping someone who is starting out, Smith adds.
Borrowers and lenders remain anonymous to each other. Last week, Smith got an e-mail from his Fynanz borrower, Dano34, saying: "This has been a very smooth experience for me and a lot less stressful. Thank you for the faith and trust you have placed in me and I will not let you down."
There are fees, of course. As a borrower, you're charged a fee of 2.9 percent to 6.9 percent when the loan is disbursed, depending on your risk profile. The fee is added to the principal.
Fynanz also tacks on an extra 1 percentage point to the loan's interest rate to finance a guarantee fund. This fund will repay lenders all or part of their money if you default. After you repay 10 percent of the original amount, this 1-point charge is dropped.
You will make payments of $25 to $50 a month on the loan while you're in school. Larger repayments kick in six months after graduation.
Chaman offers a couple of tips to students: Post a well-written, correctly spelled description of you and why you need the money. "Don't be greedy," he adds. Lenders are more likely to fund a small loan for the semester than a giant loan for all four years of college.
Prosper.com, a more established lending site, has seen more interest from student borrowers lately, although education loans make up only 2 percent of all borrowing, says founder Chris Larsen.
As with Fynanz, you make a pitch for a loan on Prosper and lenders bid on it. Your credit score can't be lower than 520. The interest rate is fixed. Repayments start immediately and loans must be paid off in three years. That can be difficult if you don't work while going to school. The fee to borrowers is 1 percent to 3 percent up front.
Peer-to-peer site Zopa.com plans to introduce a student loan product later this summer.
