I had actually talked about this on the old site but since i lost those old posts let me recap, Peer2Peer isn’t apparently just for mp3’s anymore in fact the new thing seems to be P2P loans… it all started with an article over at gizmag concerning zopa it was a really interesting concept… Basically you signup submit all your personal details and you can be a buyer or lender or both if you really want… and you set what interest rate you want on your money or are willing to take a loan for and you basically can get a loan. The way the loan is handled is say person A commits to lending 1000$ … this is automatically split up into 100$ chunks so technically that makes it 10 loans of 100$ this is to reduce the risk to any single potential lender. There are safeguards and identity checks and stuff and zopa does keep 1% for there own fee but all and all its a really good concept… The issue with the 100$ splits is that well even if i lend 100k to help zopa grow and help the world of online lending the thing is if someone needs 10k they need to borrow from 100 people at 100$ each and its even more people with say 100k ( i dont think zopa allows that high though anyway ). My friend wanted to borrow 25k for a car but couldnt get it via zopa cause there werent the kind of funds needed or not enough people or something.
Fast forward to today where an article from Arstechnica caught my eye, it was another Peer2Peer lender service (is this the start of a new fad? low interest personal loans over the internet?) The site is Prosper.com this site is quite different from Zopa this isnt a split system with automated lending its more of a eBay of lenders and borrowers. Borrowers post there story as to why they need the money, reasons and pictures can vary depending on the situation maybe Credit Card debts or house payments or whatever and then lenders get the chance to bid on the loan to try to get it… Its kind of like that commercial where the banks compete for you…well instead its personal private loan lenders competeing for you.
If your in need of cash and don’t want to fight with really bad interest rates on credit cards or banks (zopa and prosper both have lower rates… while zopa is much lower around 5% i think were some of the higher ones, better for borrowing but worse for lending… while prosper has higher rates but no where near as bad as say banks or credit cards it all depends on the bids on the loan request)
Source: Arstechnica and Inhouse
