Monday, February 13, 2006

Next Up With a Neat Idea:

"Neither a borrower, nor a lender be."
— W. Shakespeare, Hamlet

Someone posted a comment a little bit ago on Jonathan's world-famous MyMoneyBlog, and I just had to take a look:

Peer-to-peer lending, huh? Neat idea. Really. It's like ... an eBay for money.

Anyone who knows me knows that I will have to sign up and give a try (as a lender). I want to see how well this works.


— Posted by Michael @ 2:07 PM


There are a lot of risks involved with prosper at the moment and it Zopa (which originated the idea in England) left a comment that they will be starting a competing service this year. Should be interesting stuff.



One of the things that stood out to me was the "thinness" of the borrowing market on Prosper. As time passes, though, more folks will likely sign up, and the risks can be mitigated somewhat. But only somewhat.

I know the risks going in. But there's risk on pretty much every level of life, right?

What makes me chuckle is seeing folks on Prosper attempting to borrow money at rock-bottom single-digit rate. Credit score is a consideration, sure, but when a 90-day T-bill is paying 4.7%, and your basic online savings account pays ~4%, why would you risk a Prosperized borrower? (Unless you're wanting to "make a difference" in someone's life, or something nebulous like that.)


I have written a post detailing some of the risks that I forsee with, I would appreciate any insight or feedback. Thanks.


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Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]