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GreenNote (Redwood City, CA) enables students to obtain student loans through their friends, family and community. Loans range from $1,000 up to the cost of attendance, as certified by the school. (Loans are limited to legitimate school-related expenses, such as tuition, fees, room and board, and books and supplies. Loan funds are not available for personal expenses. Funds are disbursed directly to the school.) The loans are unsecured and are not subject to credit underwriting. The interest rate is fixed at 6.8% (6.0% in Pennsylvania and Washington DC) with up to a 5-year deferment, a 6-month grace period following separation from school, and a 10-year repayment term. Interest continues to accrue during the deferment and grace periods and is capitalized (added to the amount owed) when the loan enters repayment. There are no prepayment penalties.

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While there is no credit check, cosigner, collateral or citizenship requirements, the student must have friends and family who are willing the lend money. However, the site helps prospective borrowers conduct a "pledge drive" to contact friends and family to make them aware of the student's need for funding. This makes it easier to ask for money, avoiding the embarrassment of asking for help in person. (While loans won't close until at least $1,000 has been pledged, lenders can offer to lend as little as $100 each. The individual loans are combined into a single loan to the student.)

GreenNote has also established the GreenNote Network to allow unrelated individuals, institutions and affiliate groups to lend to students. The terms of the loans are the same as for friends and family. GreenNote allows the lenders to select students based on a variety of demographic information, such as area of study and the name of the school.

Borrowers pay a documentation fee of $49 or 2% of the loan amount, whichever is greater, deducted from the disbursement check. Lenders pay a 1% management fee for servicing the loans.

Lenders may choose to forgive interest and/or principal or reduce the interest rate when certain milestones are reached, such as graduation. Borrower payments, delinquencies and defaults are reported to credit reporting agencies and so may affect the borrower's credit history positively or negatively.

GreenNote launched on June 4, 2008.