People Capital gets $500K for p2p loans

Series B funding for peer-to-peer student loans platform trying to make credit smarter

The Web is first and foremost about connecting people around the world: friends with friends, sellers with buyers, and, now, lenders with students in need of loans.

People Capital, a peer-to-peer platform that networks students with sources of college funding, announced this week the closing of a $500,000 round of Series B funding. This latest round, led by investor Josh Mailman, comes just four months after People Capital secured additional funding from private equity firm Radcliff Group Inc.

Founded in 2008, this New York-based startup matches college students with various sources—individuals, philanthropic organizations, financial institutions—for student loans. The most interesting aspect of the startup, however, is their innovative method for assessing credit for students, a whole community with little or no credit histories or credit scores but still in need of loans.

“Although peer-to-peer lending technology is not new, we had been looking for a company that could bring the technology to the next level, one that offers a responsible alternative to students wishing to take out loans for college,” said Mailman, head of The Serious Change fund.

Indeed, p2p lending has been around for at least the past couple years through Web sites like Duck9 and Lending Club.

People Capital, however, wants to employ a measurement service called Human Capital Score, which takes into account the value of education when determining loans to be granted to students. Checking enrollment status, GPAs, standardized test scores, college, and major, the Human Capital Score is an effort to make the lender feel confident about connecting with the borrower.

In an online world littered with plenty of Web sites for loans, People Capital, targeted specifically at the education sector, is aiming to be the number one stop for student loans.

(image source: lovetoknow)