A totally new money service are available in internet. Prosper.com provides a new way for us to lend our money or borrow money from others just through internet with a few single clicks. Sounds risky?

How it works?

Proper.com provides a place on the internet to let people who need money and people who lend money gather and do the transaction. Sounds like an Ebay system? So borrower will submit a request on loans by key in their requested amount and maximum interest rate into the prosper.com system. After that, lender will bid on the money that they wiling to lend and interest rate that they want to charge. At the end of the process, prosper.com will combine all the lender’s bid and make it become a 3 years simple loan for borrower. It is really easy.

System that track your credit?

Who should I lend money to? Here, personal credit will be the guideline for you to lend money. In prosper.com, they use a “Group” concept to keep track your credit. If you manage to join into a group with good credit and payment history, then you can get a good reputation from the group and lenders can offer you good interest rate. But it is also a pressure to you if you make late payment because this not only drop down your reputation but also others in your group.

Conclusion

Prosper.com is really a great idea to revolute the money system in this world. After having a brief reading on the site and read through their system, I think there are still some risks that the borrowers will default. So far, as what I read, there are no system to protect the lender from this kind of fault. Lenders only can reduce the risk by splitting their money become smaller loans and lend to others. However the risk is still there! In this method, I think prosper.com should do something to protect the lenders.

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