This Time, You Be the Bank

Fed up with high interest rates or loan rejections? Try online peer-to-peer lending.

If we all stick together, can we live without banks? Not likely, but the online move toward so-called peer-to-peer lending suggests some of us are ready to try.

The trend plays off the success of eBay, which proved strangers can deal directly just fine. Now, key eBay backers are behind Prosper.com, a new peer- to-peer lending site.

Here's how it works: Prosper.com links folks seeking modest sums -- small business owners, would-be debt consolidators -- with other folks who bid on interest rates they place on money they're willing to lend. For a fee, the site consolidates bids, links them to loans and moves monthly payments between parties.

Sure, such unsecured loans can be risky. But anytime we can skip a middleman, that's its own reward.

source: http://www.rd.com/content/openContent.do?contentId=30377