Borrowing Without Bankers

By on

The stock market offers a good potential return…but lots of risk. The bank? Not much risk…but not much return either. Sound familiar? Then listen to this:

“My average is 20%. I have 102 loans out right now, and my average is 20%.”
-Ava Pierre, Internet Lender

Ava Pierre is a new kind of investor in a new kind of investment. She’s not investing in stocks… she’s investing in people.

“People are coming to Prosper with a definite need. You’re fulfilling the need and you can do it with a small amount of money. So I thought it was really cool.”
-Ava Pierre, Internet Lender

She’s talking about Prosper.com. A place where lenders and borrowers meet online with no bank needed. If you need money, you tell your story. If you have money, you offer to lend it. Deals are stuck when they agree on a rate. In short, this is the eBay of lending.

Good for borrowers who don’t want the hassle of banks. But also good for lenders looking for an investment that pays more than a bank and is more personal than the stock market.

“We’re changing the way people are. The way they think. People are getting them out of that old mentality that I’m always going to be broke and they realize they don’t always have to be broke. ”
-Ava Pierre, Internet Lender

What about risk? The best way to reduce risk is to lend little amounts to lots of borrowers. Minimum loan is a hundred bucks and maximum length is three years.

This may be borrowing without bankers, but it isn’t borrowing without middlemen: these websites charge a percentage to both borrowers and lenders. But still, a borrowing and investing alternative of “interest”.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,044 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Marilyn Hereford

    How do I apply for a loan?

  • Sabrina

    Just go to http://www.prosper.com. I’m going to apply soon. Need to zero out my debt so I can start winning all the bread for me and my mom. Don’t completely have to yet but unemployment for her will not last forever and it’s taking a while for me to start my cosmetic consultant business :)

  • Maryann

    I think this is a great idea, but what if someone does not pay back? Is there a guarantee that you will get paid back once you lend out the money?

  • Sue S.

    I made the terrible mistake of taking out a Pay Day Loan and now not able to pay anything back except the interest and renew the loan each pay day. I only did this type of loan because my husband has been unemployed for several months and was up for a new job, but unfortunately the position fell through leaving us stuck with this situation. Would Prosper.com be an option for us to get the money to pay this PayDay loan off and have regular monthly payments that would be easier to handle?