So you have probably heard a little about social lending, the idea that individual lenders and lendees meet online and conduct financial business with one another.
The concept here is mindboggling to me, but I often find that the things that leave me incredulous are also the ones that really take off.
The concept here is mindboggling to me, but I often find that the things that leave me incredulous are also the ones that really take off.
The leader in the US is prosper.com .
Their fascinating marketplace works like eBay. As a potential lender I sign up and identify my minimum acceptable interest rate, then bid on lending offers. Lending opps are graded with FICO scores and other measures to help you bid, including recommendations and history on the Prosper system. The winning bid offers the lowest interest rate for a given loan opportunity. Prosper deducts monthly payments from the lendee's bank account until the debt and interest are repaid. Defaults are handled by built-in collection agencies.
I am not someone who invests in individual opps -- I am more of an index fund guy, but the idea that buyers and sellers can mingle without the proverbial "who you know factor" playing the central role is quite intriguing.
Thanks for readng, and don't forget to write.
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