Skip the Bank – Borrowing and Lending On The Internet

The stock market offers a good potential return of your investment dollars but with lots of risk. You could invest your money in the bank, (via money market account, CD’s, or saving account) which comes with no risk at all but with interest rate so low — not much return either. So how are people making 20% on their investments these days? By lending money to Internet neighbor through sites like Prosper.com. It’s called Peer to Peer lending or Private borrowing.

People are skipping the bank and lending and borrowing money from other individuals. Sites like Prosper.com are web lending/borrowing sites where the two meet to exchange funds with no banks.

Peer to Peer Lending and Private Borrowing

Borrowers (Private Borrowing) – Tell your story (why you need the money)

Lenders (Peer to Peer Lending) – Read the borrowers’ story and decide whether to lend the money.

When borrowers and lenders agree on a rate the loan is made.

Some lenders reduce the risk by lending small amount to multiple borrowers.

What do you think about Peer to Peer Lending?

What do you think about Private Borrowing?

Tweet This Post  Buzz This Post  Delicious This Post  Digg This Post  Stumble This Post 

Other Resources

• ING Electric Orange Upgrade- A Better Online Way To Save