Social Borrowing with Pro$per

By Timmy Watson in News on Feb 11, 2007 5:52PM

Making over $27 million in loans, Prosper.com is becoming more and more of a real alternative to banks. The website provides micro-financing to borrowers with all types of credit.

With somewhat the philosophy as kiva.org, which provides financing to businesses in countries where getting a loan is not so much an option. The difference between Kiva and Prosper is the interest, of course. Kiva provides borrowers with no interest loans while Prosper offers high, but reasonable interest rates. CBS reported on Lara Miller, a Chicago designer who, after getting turned down by the bank, went to Prosper and received over 8 bids for her $3,000 request immediately.

The process is pretty straightforward, lenders read the stories and offer their bid. A $3,000 loan may consist of any number of lenders, offering any amount, therefore, a loan can have numerous lenders. We were a little skeptical at first, but once you read the stories and look around the site you realize the vetting process may actually work. You also get to choose your own collection agency, which could be needed as a quick look around the site shows lot of people who are already in pretty bad debt and are trying to consolidate. But, like Lara Miller, there are plenty of talented people just looking for some help from someone with a face, as opposed to the automated underwriting system that turned her down.