Virgin Money has launched an online calculator to help US students find the lowest 'blended' interest rate for their college loans, including alternative sources of financing such as friends and family.
Virgin says the Lender Blender tool allows students to evaluate all potential sources of funding and concoct an overall blended interest rate.
Students select their school and preferred loan options - such as parents, friends, private and government - before the tool takes the weighted average to determine the user's potential blended rate.
Virgin says the free tool offers students looking to finance their education financial information from multiple sources from a one-stop shop.
"The 'blended' rate is the most important number families should pay attention to when developing a college financing strategy," says Su Joun, student loan product manager, Virgin Money, "After exhausting traditional education savings and financial aid options, they should take a hard look at all potential options-including less conventional approaches-and work to understand their total borrowing costs."
The Virgin tool arrives on the scene as American college students are increasingly struggling to find loans from traditional lenders such as banks and credit unions in the post-credit crunch market.
In May a person-to-person social lending Web site called Fynanz was launched to take advantage of the situation. It allows borrowers to create an online listing with their educational profile, along with a loan and rate request. Students can request unsecured loans from $2500 to $20,000, to be repaid over 10-20 years.
Virgin Money is also eyeing the P2P loans market. In May last year, the companym took a majority stake in Massachusetts-based CircleLending, a provider of loan administration services that specialises in managing loans between relatives and friends.