I’m talking about sites like http://www.prosper.com/ where users can either invest their money to individuals/small businesses via loans, or request loans. Anyone used these as either a lender or to get a loan, any feedback on these sites?
I’m curious how they work and actual experiences with them. 
I use prosper.com. Found out about it in 2009 and put in $100 just out of curiosity. Today I have $120, all of it reinvested back into loans. So far I have not had anyone not pay me back. Usually someone will ask to borrow a few thousand dollars, set an interest rate they are comfortable with, and lenders can can bid to put money into that loan in $50 increments. I don’t know how the delinquency/default procedure works since I’ve never participated in a loan that went bust. Lenders are treated very well, the fees are negligible and you can start with as little as $50. I don’t know how well prosper would fare as a for-real investment vehicle, but its great for learning how lending works in the US, they hold your hand through every step of lending money to someone and provide lots of reference literature. If I wasn’t worried about having to buy a new car in a year or two I might be tempted to pump a few thousand into high risk high interest loans and see what happens, but that would be closer to gambling then investing.
Thanks for the feedback! How long did it take you to get your $120 from the $100 loan?
Also interested in anyone who got a loan as well.
I did the online loan thing at kiva.org for about three years, just a rotating $50 loan. It usually got “paid back” within six months, then I reloaned it.
I love the concept, but walked away from kiva (leaving the $50 behind of course) last year after it was disclosed they were being somewhat less than honest about their pactices.
I still think it’s a fantastic idea, and now that you’ve brought it up I think I’ll give it another whirl - not with kiva, though.
I’ve got a little money on loan at kiva. There’s also a separate thread dealing with Lending Club (similar to Prosper).
My understanding was that at least at first, Prosper’s model didn’t work too well for the investors - they rated loans incorrectly and overall, few lenders were making any money. Lending Club’s statistics are a little misleading but seem to be a bit tighter, overall. I’m still on the winning side, lending-wise.
It took me 2 years to go 100 to 120, but my money was just sitting there not invested in loans for about 8 months, prosper ran into some legal troubles in my state and told me I couldn’t lend anymore. The issue seems to be resolved now. All in all my prosper investment seems to be beating the S&P500 over the last 2 years, but comes with substantially more risk. It is also nowhere near beating the rate of return I get on my pretax 401K contributions, which I am not maxing out right now, so for me its a no brainer where any extra money I get is gonna go.
I both lend at Lending Club and have a loan from them. If you want to apply for a loan and get me a bound you can ask me for a referral code.