Last year I discovered a website, it’s called Prosper. I’ve wanted to talk about it for a while but I figured I’d keep and eye on it and see how it evolved first. Prosper is a really cool site with a really cool idea.. borrow money from a lot of people at the lowest rate possible. It’s like a mix between eBay and PayPal, but with a dash of BitTorrent.
Here’s how it works.. You sign up and request a loan.. lenders (other individuals like yourself) then bid to loan you the money in smaller amounts. The more people bid, the lower your APR is. For instance, if you want $500.00 you might get 10 people loaning you $50.00. The money is sent from Prosper to your account, and you only have to make your payments to Prosper, not the 10 people who loaned you the money.
If you’re into lending, then it offers great returns. Just like picking stocks.. the higher the risk, the greater the return. Prosper does a great job of giving you as much credit information about the potential borrower as you could possibly need, but just like eBay you can ask them as many questions as you wish. The beauty of lending is that you’re never loaning out the full amount, just a piece, so even if the borrower is hit by a train you aren’t out more than $50 or $100.. whatever fraction you lent.
I really like this site, I’m even using it to pay down some credit cards. Give it a look!