Debuted in 2006 from the CEO of E-LOAN. Prosper is currently the largest P2P lending site. To lend money Prosper uses an auction style of bidding on loans very much like the kind eBay does.
If you are approved to borrow money through Prosper.com your loan request is funded by several different lenders. Prosper then sends the money to your bank account. The process is called direct loans.
Most important, Prosper uses WebBank to handle their money flow. That means the company is an FDIC-insured bank and follows federal law.
Kiva.org and MicroPlace.com. These are microlending sites that allow you to loan small amounts of money to entrepreneurs in the U.S. and developing countries. Lending amounts can be as little at $25.
Lending Money to Family and Friends?
VirginMoneyUS.com. An off-shoot of Richard Branson’s Virgin empire, it is a leading site for loans between friends and family, especially for mortgages and student loans.
Nolo.com. Tied to the Nolo publishing company, this is a site heavy with legal information. Families and friends engaged in loaning can use Nolo.com for lega forms and loan documents.
P2P Websites for Student Loans
Fynanz.com does not look at credit scores but rather GPA to determine quality borrowers.
GreenNote.com is unlike any p2p site we have gone over thus far. Loans are doled based on character, not credit scores. The catch? You have to conduct a pledge drive to relatives and other sources to find you monetary backing. GreenNote just documents the papers and sends the money to your school.
Other P2P Lending Sites
LendingClub.com. Started on Facebook in May 2007 and is now available to the public and backed by WebBank. As of June the company has issued more than $17 million in loans with a default rate of 0.36 percent.
GlobeFunder.com. Launched in January 2008 and finances loans between retailers and consumers.
Loanio.com allows borrowers to have co-borrowers if their credit is bad.
Remember, at the end of the day you have a ton of options out there so make sure you take the time to do your research and find out which p2p lending site fits your loan needs best.