Prosper.com: Do you need a loan?

Do you need a loan? Or maybe you’re looking to loan money to someone else and earn a nice return? Well, join the 37,000 other people who visited prosper.com last month. It’s the "online marketplace for people-to-people lending."

Whether you’re an entrepreneur looking to start a business or someone looking for a better return on your investments, you’ll find this site a wealth (yes) of information and opportunity. Take the following example:

This guy says "I am requesting this loan for my wife so she can start her home based business selling jewelry. She currently works as a hair stylist"¦this loan is a boost we need to get her project rolling right away. With the income potential anpeod our own incomes, paying this loan is not a problem. Thank you for considering our loan and our request."

Based on this information, Prosper creates an online market place similar to Ebay.com where lenders "bid" on loan requests and indicate what percentage they are willing to loan the money. Borrowers’ credit ratings and repayment history are shared. From my own observations, most of the loans made seem to be in the $100 – $250 range. These small loans are then pooled at a single rate, in this case 13%, to fund the entire loan request. Lenders are then paid back by Prosper, which sets up an automatic, monthly withdrawal from the borrower’s checking account.

As a lender, you can determine if you want to make low risk, low percentage loans (8%-9% range), or fund some riskier opportunities, with rates as high as 29%.

Personally, I’m in the process of setting up a lender account now (typically takes a couple of days to transfer money in). There might be some great investment opportunities out there.

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