PROSPER.COM THE BEST IDEA SINCE COMPOUND INTEREST
Brought to you by Chris Larsen, the entrepreneur that created E.LOAN, brings a fantastic idea to the masses. I'm always looking for innovative ways to make a buck, whether in real estate, the art world, or financial investing. This is the best way I've seen in a long time. Basically, YOU can be the bank. It makes sense from a lot of angles. Say you have a fellow with $10,000 in credit card debt paying 18-25%, you bid on his loan and charge 14-15%, he pays off his debt and refinance it at a lower rate. Where else are you going to make 15% now days? You review 100's of requests for loans, you look at their credit rating, then use Prosper.com to mediate. It's billed by Money Magazine as a way to "...get in on the ground floor of some guy in Maine who needs $500 to fix his car..."
The site looks like they cover all there bases. The borrower pays them 1% of the value of loan (that is their profit margin) then you get the remaining interest. You set the interest and terms you are willing to pay someone. The higher the risk, the higher the interest. If they default on you, then Prosper.com goes after them with collection agencies just like credit card companies. With over a trillion dollars in consumer debt floating around, this is a great way for the average Joe to enjoy some of those famous credit card interest rates. I might try it with a small amount and see how it pans out.
2 comments:
This is one of the most interesting and unexpected things I've ever heard of. I'm impressed no little.
I checked this out. It seems you are assuming plenty of risk but you can spread out your loans by giving small amounts to lots of people which should result in an overall nice rate of return.
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