Guide to Social Lending Networks
Jim Wang at Bargaineering has a concise guide to the popular social lending networks. When I first became involved with social lending through Prosper, it was the only shop on the block. Now there are competitors, each offering their own twist to the social lending business model. (One not mentioned in this review is Kiva, which is a charitable lending site. You don’t earn returns on your money but it’s a good way to help people off their feet.)
I financed our back yard work through Prosper and got an outstanding rate, far below even the local credit unions. I’m considering dropping some money into LendingClub and earning a nice return when the time is right. In either case, I’ve saved (or earned) myself the difference in what the banks would charge (or yield) by borrowing (or lending) directly.
Given the current worries over bank instability, I’m curious to see which way these P2P lending sites go. Will individuals be less likely to trust other individuals, in fear of loans that will default, or will the distrust in banks fuel a rise in P2P lending? Only time will tell.
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