It may sound a little unusual, but it’s a great way to earn 8-20% interest on any extra cash you have lying around.
Prosper.com is sort of an eBay for loans. They bring together people in need of a loan and people willing to lend money. The lenders bid on the loan, stating how much they are willing to lend and at what interest rate. The more lenders bid on the loan, the lower the rate goes. Though loan seekers can get loans of up to $25,000, each lender only funds a small portion of the loan, as low as $50.
Once bidding is over, Prosper handles all of the details. They remove the money you lent from your account, and then deposit the monthly payments back ito your account for the next three years. With compounding, it’s not difficult to earn huge rates of return with very little effort. Of course, as the lender, you are taking on some risk. If the borrower defaults on the loan, it gets sent to a collection agency, and you’ll get only a portion of whatever ends up being collected.
By spreading out your money across several loans, lenders can reduce their risk. Each loan details the lender’s credit history, debt-to-income ratio, and delinquent payments, among other things.
Check out Prosper.com and find out more. It’s a great way to earn extra cash!
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