Prosper, America's first people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone.
The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper's online auction platform.
People who want to lend set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. People who lend can easily diversify using "standing orders", which automatically make many small loans to different borrowers.
As they start up, it's a three-year loan system, so it's not like I could just put up all my debt for massive consolidation (ah, wouldn't that be a dream!). It's also brand new, so it's all baby-stepping start-up-y.
I, of course, love to try brand-new things that are based on great ideas, so I went ahead and put up a listing for a specific need. It will be something if it goes through, all things considered, but I wanted to start with something targeted that would really create a positive change for me. I believe there's some chance someone might bite. The concept of person to person lending is so strong, so important.
I mean, haven't you always thought (if you have credit card debt), surely someone would rather I be paying them for even half this obscene 21.99% interest rate, if only there was a way we could connect. And honestly, my debt load is high, but it's the interest rates that truly trap you and make it next to impossible to get out of debt. (That said, the debt I'm trying to roll is already sitting at a very low interest rate, locked in many years ago, so it puts me in the position of asking for a lower rate than I would currently qualify for from an established, corporate lender. So we'll see what happens.)
At least I'm clearly not lying about my income... no one would lie to give themselves my debt-to-income ratio!
I often think about credit card companies like the factories in The Jungle by Upton Sinclair. Truly they exist to pull you further and further into debt, preying on the worst off. A little aggressive competition ready to take on risks and offer lower rates is just what the country needs.
I thought about linking to my blog as a way of saying, hey, I'm an established member of the online community with known connections like being a contributing editor at Blogher, but since my last "money & banking" post was about making a mistake in my checkbook (which, btw, most everyone does sometime), I thought maybe not.