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Crowdfunding is clearly the next big thing. What started with entrepreneurs on sites like Kickstarter, has moved into student loan payment and various other sorts of group payments.
In 2013, LoanGifting began to help today’s youth create a debt-free future “sooner rather than later.” RKS CEO Ravi K. Sawhney challenged the RKS design firm to create an innovative way to help society as a whole.
While doing their research, they discovered several needs and causes, but ultimately decided to work on helping college graduates get out of debt. The LoanGifting system encourages users to ask for help from friends, family, and associates in order to provide “an easy and inspirational opportunity to help.”
The website has been featured on MarketWatch, FastWeb, and Spark. Other sites like GoFundMe have also been used for education crowd-funded payments, as $20 million was paid in 2015 for education alone.
How Does LoanGifting Work?
Anyone can sign up for LoanGifting, for free. The site asks for new users to connect by providing loan data and then building a simple dashboard, which is similar to a profile on social media.
Next, users need to use the templates and tools on the website to tell their story and create a gifting campaign. Like Kickstarter, the better and more personal the story, the more likely it will be to get the loan funded.
Finally, users should start to build their networks. This means collecting contact information for family and friends (which can be securely uploaded). The website then reaches out to connect in a “friendly and respectful manner.”
Frequently Asked Questions
As written on the LoanGifting website, some of the basic questions include:
- Are there any time limitations? (Short answer: No)
- Is my country supported? (Only U.S. student loans are supported)
- Is it safe to use? (Yes… Highly secure payment encryption technology)
- Can I make my campaign private? (Yes… However, you will only be visible to those you share your profile with)
- Does it cost anything to use? (LoanGifting will deduct a 3% fee)
- How do I get money? (All LoanGifts are deposited directly into your student loan account)
Currently, LoanGifting is not tax deductible and some online reviews don’t seem to understand the business, calling the company “profiteers” off crowdfunding student loans. However, these reviews make a judgment before they know all the information.
Making Sacrifices to Eradicate Debt
While the real solution to eradicating student debt likely lies somewhere in the ability to lower the cost of education, the facts remain that most recent college graduates are in a great deal of debt.
For those willing to give up the typical perks that come from gift-giving occasions such as graduations, holidays, and birthdays, the LoanGifting website allows a way for family and friends to help individuals pay off debt rather than give gifts. In the long run, based on the accumulation of debt, it’s best to make small sacrifices now.
As listed on a promo for the site, “Receiving $60 a month in LoanGifts will shave 4 years off each 10-year loan of $10,000 accruing interest at 6.8 % APR.”
This site, and others like it, make it possible for students to ask for help without having to feel bad about doing so. And because the givers know the money goes directly into the student loan account, they may even give more money than if they were to just give a typical gift, because they know it’s for a good cause.
Author: Jeff Gitlen