Free-Market for Loans

If the government wants to keep messing with the interest rates and cause people to lose all of their money, we will find away around it. Oh wait, we somewhat have!

First, you saw Kiva undermine the World Bank at giving international loans to increase development and now you have Prosper to undermine the Federal Reserve from messing with loans. This will also come in handy if Hillary Clinton Freezes interest rates.

This from the site:

“Prosper, America’s largest 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 an online auction. Instead of listing and bidding on items, people list and bid on loans using Prosper’s online auction platform.

People who register as Prosper lenders set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. In addition to criteria commonly used by institutional lenders, such as credit scores and histories, Prosper lenders can consider borrowers’ personal stories, endorsements from friends, and group affiliations.

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 Prosper lenders can bid down the interest rate. Once the auction ends, Prosper takes the bids with the lowest rates and combines them into one simple loan to the borrower. Prosper handles all on-going loan administration tasks including loan repayment and collections on behalf of the matched borrower and lenders. “

Talk about the free market of loans!

~PCCapitalist

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Published in: on May 4, 2008 at 5:04 pm  Leave a Comment  
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