Rishi Zaveri, chief executive and co-founder of Lendwise, explains why there is a real need for government-guaranteed student finance…
University students should be able to access government-backed loans in the same way that businesses can utilise the coronavirus business interruption loan scheme (CBILS), it has been claimed.
Rishi Zaveri, chief executive and co-founder of education finance platform Lendwise, says that students are being left out of the government’s coronavirus relief packages, and this could lead to a looming student financial crisis.
“I feel very strongly that what was done for CBILS and the bounce back loans should have been done for students on a relative basis,” he says. “Especially for students who are key workers. There have been many nurses and NHS workers who have really felt the strain, but they’ve had nothing like this to turn to.”
Lendwise is the only UK-based peer-to-peer lending platform that offers competitively-priced loans to post-graduate students. In recent months, Zaveri has been inundated with new loan requests, and he says that his platform is ready to scale up its efforts to get funding to creditworthy students who are seeking to better themselves through education.
This funding gap is particularly pronounced at the moment, amid an economic recession which has claimed many of the part-time hospitality jobs that students rely on to help pay their way through university.
“I’m sure a lot of students have had to resort to borrowing at higher rates and some may not have been able to access any form of finance,” says Zaveri. “That sits at odds with the fact that government-backed financing is available to so many employees and business-owners.”
If a CBILS-style student financing scheme was to be launched, Lendwise’s distribution model is primed and ready to get much-needed funds into student accounts.
Applying for a Lendwise loan is simple. The application process is fully online and takes around six minutes from start to end. “
It comprises of three steps,” explains Zaveri. “Step one, you enter your personal details. Step two is your educational history and any work experience you may have, and step three is a budget calculator which you use to figure out how much you need to borrow from Lendwise – this takes into account your tuition fee costs, your living expenses and other personal expenses, as well as details such as how much funding you have, whether through a government loan, whether you are contributing any of your own savings towards the course, and so on.
“Then you submit your application and we will revert back within – at most – two business days.”
For successful applications, Lendwise will offer the applicant a personalised loan proposal, with an interest rate which reflects the applicant’s profile and a repayment term which takes into account their own financial circumstances.
The average borrower rate is around 10 per cent, and the first repayment is not due until after the completion of the course.
“If students need funds, we can provide them,” says Zaveri. “We have borrowers who get their government loans and use us for the top up. And the feedback we have is overwhelming – we are far more efficient than others.”
Amid rising unemployment, A-level results confusion and frustration around newly-online university courses, there has never been a better time to be in the business of student loans – with or without government backing.