A colleague of mine has student loan debt of ~35K at 7% APR interest. I have more than enough principal to pay off his debt, and for my troubles (and risk), I think asking for a 4% APR is not out of the question. Assume a $450 monthly minimum payment until it is payed off.
I understand there is risk involved with doing this - If he goes ghost on the loan, I would have to take him to collections, and the legal fees might outweigh any benefit I would have gained. But assuming all goes well, and he remains gainfully employed until he is able to pay back the loan (plus interest) in full, I stand to make a decent amount of money on this loan.
What is the easiest/safest way to make a legally binding agreement, and to keep track of said loan/balance? Are there any websites/third parties that can handle this for me? I suppose this is akin to how my mortgage is owned by Freddie Mac, but is serviced by PHH Mortgage. Are there any 3rd party servicers that would assist in personal loans such as this? Are there any risks I am overlooking?