Have you wondered , that the banks will take money from you and only give an interest rate of 2-5% and at the same time they charge you in the range of 8-20% when you get a loan.The difference is obviously kept by the bank as that is the way they make money. Ever thought about sharing the pie in the lending market with the banks.
Till now there was no way you could do it, but there are p2p lending sites popping up everywhere.The idea is very simple that is you got to these websites and either buy loans or borrow money and you bid on the interest rate just like on ebay. The various sites which facilitate p2p lending are Prosper,Zopa,GlobeFunder,Lending Club,Virgin Money
The idea of P2P lending is game changing and very good but I have chosen to not use it for a while as I feel that the timing is just not right for me at this time.Here are my reasons why
If a person with a nice credit is going to foreclosure and then while his credit is good goes to prosper.com and gets a 25k loan(25k is max at prosper.com) and then goes into foreclosure, he has 25k and obviously someone who is going to foreclosure does not have to care for credit score and considering that prosper.com loans are unsecured(i.e. no collateral) , don't know how much collection agency can get the money back.
This thought has kept me at bay from P2P lending.But in future I definitely going to consider lending or borrowing via P2P.

posted at: 16:36 | category: /personalfinance | permanent link to this entry