Loan Dolphins
Yes, that's right. The title of this post is "Loan Dolphins." I coined the term to describe a new online lending service, Prosper, that is I think, the opposite of what "Loan Sharks" do. I didn't come up with the name right away. "Loan Tuna" sounds too fishy. "Loan Shrimp" connotes tininess;"Loan Squid" sounds slimy and unwholesome. And though they roam in pods, "Loan Killer Whales" is just plain frightening. "Loan School" would more likely bring to mind an educational institutional rather than conjure up images of a cohesive community of money lenders. "Loan Dolphins", on the other hand, does capture the kinder, gentler, decidely friendly feel of this innovative, San Francisco-based, people-to-people, lending program. Here are some details:
Prosper, America's first people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone. The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper's online auction platform. People who want to lend set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. People who lend can easily diversify using "standing orders", which automatically make many small loans to different borrowers. Borrowers create loan listings for up to $25,000 and set the maximum rate they are willing to pay a lender. Then the auction begins as people who lend bid down the interest rate. Once the auction ends, Prosper takes the bids with the lowest rates and combines them into one simple loan. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrower and lenders.
Borrow money from people. Borrowers are Prosper members who want to borrow money from other people and get a better deal than the credit card or loan rates offered by banks. Rates are low because Prosper lenders are people—like you—who want a fair shake from honest borrowers without all the fees and hassles of doing business with big banks. Borrowing money through Prosper is fast and easy, and because you're borrowing from people, the rates may be lower than you'd expect!1. Register with Prosper: Registration is quick and easy. And free!
2. Join a Group: Build lender trust by joining a trusted group.
3. Create a Loan Listing: Say how much you want to borrow, and what your maximum interest rate is.
4. Watch the Bidding: Lenders start bidding immediately - watch the funding go up and the interest rate come down!
That's right—help out a fellow human being by making them a loan. We give you the borrower's credit grade, debt-to-income ratio, and group details, and you set the rate at which you're willing to lend. All loans have a 3-year duration.
Groups: the strength of community.
Groups are the heart of the Prosper marketplace. A group is organized by a single leader and consists of borrowers who all share something in common. Borrowers request membership or are invited to join a group, and since membership is limited, usually have some connection with one or more group members.
Group categories include: Art & Culture, Business & Professional, Civic & Political, People & Lifestyle, and Religion & Spirituality.
I first learned about this site in the spring or late winter of this year. Since then the number of groups and participants on both the lender and borrower side looks like it has grown ten-fold. And why not? This is the kind of lending that let's you borrow money from people who won't threaten to make youswim with the fishes.
See also: (Credit) Card Sharks |
lending | Money | borrowing | personal finance | personal-finance | Credit | Debt | Bankruptcy |
Comments
A new innovative group on Prosper.com called "Two Millionaires cover High Risk loans, restore credit" is helping people prosper by getting them a series of small loans to move their credit grades from HR to B.
This group is new but has already attracted almost 200 members and is doing a lot of good in the community.
Two Millionaires offer a large selection of quality listings at high interest rates to attract lenders.
https://www.prosper.com/public/groups/group_home.aspx?group_short_name=Mayans2
Posted by: Prosper Lender | November 9, 2006 5:54 PM
Did you see that Prosper posted loan performance data? What's your take on it?
http://www.prosper.com/public/lend/performance.aspx
Posted by: Bill | August 13, 2006 11:40 PM
I love the title of your post... Loan Dolphins is awesome, and I think I'll start using it if you don't mind. Anyway, definately check out www.kiva.org... it's definately Loan-Dolphining, because the only other access to capital most of the borrowers have is actually village lenders that charge 100-300% interest! It's also totally a feel-good project.
Posted by: sheel | July 14, 2006 6:11 AM