Can I borrow a fiver? No? How about a grand?

March 7, 2006 1:17 PM

Prosper is people-to-people money lending online. [via fosfor]
posted by goodnewsfortheinsane (27 comments total)

Currently US-only though.
posted by goodnewsfortheinsane at 1:17 PM on March 7, 2006

I'd like to see a web site with a database of all the insanely rich people who would be willing to part with money--not lend it--to poor people. But I guess it wouldn't work because if you gave away money you wouldn't be insanely rich. Why did I even write this comment?
posted by josephtate at 1:22 PM on March 7, 2006

So is your username a comment on this concept, or just a happy coincidence?
posted by InfidelZombie at 1:22 PM on March 7, 2006

FatWallet discussion about Prosper.com
posted by rxrfrx at 1:25 PM on March 7, 2006

eShylock
posted by Faint of Butt at 1:42 PM on March 7, 2006

Wasn't this done already about five years ago? Ah, FatWallet has it -- Zopa.com. Well, it still seems to be around, so maybe there's traction for this.
posted by dhartung at 1:50 PM on March 7, 2006

Interesting concept. At first look, I can't imagine it will take off, other than a lot of not-very-credit-worthy people organizations or ideas looking for a chance. But people aren't completely predicatable. Maybe it'll work.

I'm wondering why anyone with good credit would borrow here. Lenders would come here to get a better rate of return from a higher risk investment than the alternatives. So what's the advantage to the borrower?

And I'm wondering about tax ramifications of the interest income. Will Prosper report your income?
posted by raedyn at 1:51 PM on March 7, 2006

Where's delmoi? This would be a much more interesting use of his money than buying some boring stocks.
posted by mullacc at 1:52 PM on March 7, 2006

People with poor investment skills lending money to people with poor money mangement skills. Yeah, this'll work out well.
posted by blue_beetle at 2:01 PM on March 7, 2006

I wonder if they'll shut down someone acting as a finance company - i.e. using their high credit rating to borrow funds and then lending it out at higher rates.
posted by mullacc at 2:10 PM on March 7, 2006

*jumps on the finance company gravy train early*

So is there leg breaking involved? Tell me there’s leg breaking?
Seriously though, how do you make sure you get paid back? Leg breaking?
It’s leg breaking, right?
posted by Smedleyman at 2:14 PM on March 7, 2006

anybody looking to buy a pound of flesh?
posted by shmegegge at 2:22 PM on March 7, 2006

mullacc what would be wrong with that?
posted by empath at 2:24 PM on March 7, 2006

Wasn't this done already about five years ago? Ah, FatWallet has it -- Zopa.com.

Zopa is in the UK. Prosper seems to be the first American clone of the concept.

I'd be interested to see if one pops up in Canada.
posted by Zinger at 2:24 PM on March 7, 2006

No leg breaking. All they have to do is inject some bird flu into your nestegg.
posted by PlanoTX at 2:29 PM on March 7, 2006

empath: Nothing in my mind. I was actually thinking about doing it. I'm just curious to see if Prosper would want that kind of activity to proliferate - it seems somewhat outside the intent of the site and it could increase risk.
posted by mullacc at 2:49 PM on March 7, 2006

usurynet
posted by gigawhat? at 2:51 PM on March 7, 2006

Or, you could lend money to people in places where a US dollar goes a whole lot farther through kiva.org.
posted by bigtex at 3:25 PM on March 7, 2006

zopa.com seemed very adamant about their background checks, their experience in the lending field and tracking down fraud as well as defaulters. prosper.com seems extremely 'fisher price'. Are there any others available to U.S. citizens that are maybe more like zopa?
posted by kookywon at 3:27 PM on March 7, 2006

Prosper has some blue-chip VC backers: Accel Partners, Benchmark Capital and Omidyar Networks (Pierre Omidyar's "VC" that does feel-goody stuff). Apparently Kagle from Benchmark has put up $100k of his own money to make loans on the site.
posted by mullacc at 3:46 PM on March 7, 2006

(and I forgot Fidelity Ventures)
posted by mullacc at 3:47 PM on March 7, 2006

The idea is definitely interesting. The liabilities seem to be mostly mitigated, but I think over time this site might get pretty huge. It seems to be self-sustaining in that people can make money off this, not just the site.
posted by cellphone at 4:27 PM on March 7, 2006

Would this sort of thing be tempting to identity fraudsters? It seems that if you got the personal info of someone with good credit, you could open a bank account in their name, then take out a Propser loan for $10,000 and disappear.
posted by justkevin at 4:27 PM on March 7, 2006

The basic opportunity is sound. I once bought a car and did a loan through my Dad to do it. He got a better return rate than he would have at a bank, and I got a better interest rate than I would have with any available financing.

The problem is: what happens when people default?
posted by scarabic at 4:52 PM on March 7, 2006

Would this sort of thing be tempting to identity fraudsters? It seems that if you got the personal info of someone with good credit, you could open a bank account in their name, then take out a Propser loan for $10,000 and disappear.

If you know the personal info including addresses, car loans, and things like that for the last few years, yeah. But if they have that information you're so fucked that it being on Prosper isn't really the issue at hand.
posted by cellphone at 4:52 PM on March 7, 2006

Erm, clarifying: You have to verify a lot of information during the credit score pull phase of taking out a loan.
posted by cellphone at 4:57 PM on March 7, 2006

Why would someone who was otherwise eligible for a lower-interest bank loan use this service? Answer: they probably wouldn't - which means that it's going to be stacked disproportionately with risky borrowers.
posted by aberrant at 5:20 PM on March 7, 2006