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Startup offers personal loans to students

By Mitch Strohm · Bankrate.com
Wednesday, February 24, 2016
Posted: 2 pm ET
Digital Vision/Getty Images

Digital Vision/Getty Images

No collateral, no problem. Fintech startup MPOWER Financing is offering personal loans to students for things like tuition or university-sponsored services without the need for collateral.

That's one more option for students who are struggling financially and in the market for a school loan.

MPOWER's focus is lending to high-potential students left out by traditional banks.

Loan features

Like a personal loan, MPOWER offers student loans without the need for collateral. Co-signers are not required either. And payments are deferred until 6 months after graduation.

The startup lends to 180 nationalities, including Americans. It also offers career guidance and financial education.

Students can borrow up to $25,000 per year with fixed interest rates between 7.99% and 13.99% on terms of 3 to 10 years.

After the loan is approved, funds are sent directly to the university; students don't lay hands on the money.

For eligibility, potential matters

In addition to financial eligibility, MPOWER takes a look at academic potential when lending.

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Indeed, a history of academic success is a factor in MPOWER's lending model.

The company considers the chosen school, degree, major, enrollment status and anticipated graduation date.

Those who aren't considered "high-potential" students may not qualify.

Financial education

As a bonus, students who receive a loan from MPOWER have access to courses in financial literacy through its partnership with USA Funds.

"With this program, we're helping students learn how to prepare for life after college, how to balance a budget and how only to take on the debt they really need," Michael Davis, CTO and co-founder of MPOWER, said in a press release.

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It pays to shop around

Keep in mind that it's important to shop around and make sure you're getting the best personal loan for your situation.

Get multiple offers from different lenders, including interest rate and fees, and then decide on the loan that's best for you.

Follow me on Twitter: @MitchStrohm

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2 Comments
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