Saturday, June 17, 2006

Higher returns at

Higher rates of return with micro loans at

How would like to get a 17% return on your money by making a loan to a priest in Orlando? Ok so maybe your not religious, would you loan $15K to a second year Harvard student at 8%? With today's stock market it can be hard to find a good return on your money. Additionally, most people are looking for ways to diversify there investments. Prosper was started by Chris Larsen the co-founder of E-Loan. He started the service to take on the credit card companies that charge high rates and promote revolving credit that never goes away. The really cool thing is that all loans only have a 3 year duration.

Well if you are investor looking for these types of opportunities could be just what you are looking for. Prosper matches up prospective borrows with lenders in an auction/dating service type environment. Or if you are borrower looking for an alternative to the banks, credit cards or loan companies, this could be a great opportunity for you.

How does prosper work: Basically, the lenders get to evaluate the prospective borrowers each seeking loans from $1000 to $25000. The borrowers state their case on why the are looking for the loan. Prosper does the background work by providing homeownership, credit history, and debt to income ratio. The the loan is put up for bid at the maximum interest rate the borrower is willing to pay. The site has a maximum interest rate and charges borrowers a 1% fee and lenders an annual 1/2 percent fee. You can search through the prospective lenders by a variety of methods including credit rating or interest rate they are willing to pay. What's cool about is you can participate in a small way by loan $100 or $10,000 to the prospective borrower. Additionally, the loan is not actually made by you the lender it is made by Prosper then sells the debt to you. They are effectively the middle man and they do all the work and distribute the payments.

How to participate: If you are interested in prospective borrows and lender must submit to a credit check and link the bank accounts to Prosper. All the money transfers are automated, which really simplifies the payment process. Good luck and happy investing

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