The Next BIG Thing - Prosper.com (P2P Lending)

I just came across a new site, Prosper.com. Prosper is a fusion of Ebay+P2P+Lending. It's a site where people can post their loan requests, and then lenders (individuals like yourself) can then bid on them to lend them the money. It's a fantastic idea, with the power to transform a whole industry, similar to what EBay did with product auctions.

I just signed up for it as a lender.... we'll see how it goes. Signing up is straightforward but you need a bit of information, such as your drivers license, a bank account routing number, and information from your credit report (it asks you questions based on the report it pulls from you to verify your identity, such as the servicer of your last auto loan, or a previous employer name).

The attraction to borrowers is that they can try and get loans at lower rates than would otherwise be possible, since people are bidding and competing to get their loan. Also, some people in difficult situations (poor credit) might be unable to get loans otherwise. People with good credit may be just looking to get a better deal or pay off some debt. The lender is there to get a better deal than their traditional fixed income investments. In addition, it's actually gratifying to help someone out of a difficult situation. Risks abound for the lender. But it's a bold and interesting experiment.