Another Site Joins the Peer-to-Peer Lending World

You may have heard about Prosper.com. With 500,000 members and $100 million in loans, this site is the leader in generating peer-to-peer financing. Sort of the eBay of lending, Prosper allows individual investors to fund consumer loan requests. It takes a few hundred investors to finance a loan in the $10,000 range.

The appeal to borrowers is either a lower rate on a loan or the chance of acceptance where traditional lenders have rejected their applications. To investors, it's a chance to earn 9% to 13% returns in an innovative way.

Earlier this year, LendingClub.com joined Prosper.com in the peer-to-peer market. Their unique pitch involves low rates for borrowers with good credit, a strategic relationship with Facebook and the option to use your social networking connections to gather investors.

And now UK-based, Zopa.com is entering the ring. Rates are still low, APY's are still high. It's difficult to see how this new service is much different than the other competitors aside from having partnerships with credit unions.

Are you a Prosper, Lending Club or Zopa customer? Investor or borrower? Which service do you like best? Share your feedback and experiences in the comments section below.

Emily Davidson – Credit.com credit expert and former TransUnion insider. Emily writes about credit reports, credit cards, loans and personal finance as the CreditBloggers.com moderator.

Comments

[Victoria]

Prosper is a fun way to add a new way to diversify your portfolia while helping support a communal effort to create financing without banks. Currently I'm earning 12%, and I think its a GREAT idea!