AsianTom.com

Have you heard of Prosper.com? It’s an ebay style site where people come to get loans and to loan out money. The site now gives people the opportunity to loan out their money at any rate they want. People who need loans post their pictures and a story about why they need the loan. Most use the site to get loan interest rate loans to pay off higher ones.

Loaners can then choose how much money they want to give to each user who are looking for money. You keep one consolidated account with prosper.com and each month, the site debits the other person’s bank account.

People who are seeking loans are given a rating and the high risk users will have to borrow money at a higher rate. There is always the risk that a user will default on a loan, that is why it’s suggested that you loan out a small amount of money to many people.

I have read stories of people loaning out as much as $800k on the site and even hedge funds loaning out money. The only problem I see with the site is that the loans are 3 year loans, which locks up money for a while.

Some people with high credit ratings are borrowing money on the site at 8% and then loaning out that money at a higher rate such at 15% and pocketing the difference. The site is growing very fast, and I plan to loan out some of my money. We’ll see how it goes.