Microloans

I made my first loan on Kiva today. I decided to do it because I read Banker to the Poor over a year ago and I was interested in the premise. However, after I did it, I wondered: can you get a microloan to pay for college?

Yes. And expect that more companies may be throwing their hat into the ring in this area of lending. Why? Because lenders can see who they are giving money to--a feeling that their money is helping a real known individual--and, if they do their research, the lender can feel that all of their money is going to the recipient, little or no money to administration.

Here's microloaning in a nutshell: a person who is unable to get a loan from a bank, gets a loan, which they have to repay--loan not gift--that suits their smaller needs. Some people like this model--personal, just feel so warm and squidgy after, and if the loan is repaid, the credit can be reapplied--and others wonder if it is really helping: banks turn these people down for a reason and/or the terms of the loan may make them difficult to repay. For more information, check out Microfinance on Wikipedia, or this article from The Tyee.

As it gets more difficult to get loans for education--or if you just need an "emergency loan" and you don't want to go through the scholarship office or get a line of credit that has exorbitant interest--more people may opt for the microfinance option for their studies. And grad studies--short period, usually for professional education with higher learning potential (=pay back loan) may be an answer for some students.