One of the newer money making ideas that has come on the scene is person to person lending (also called peer to peer lending). P2P lending has been around since 2005 or so and one of the leading companies in the market is Lending Club.
Peer to peer lending is all about cutting out the middle man so that both the lender and borrower can get a better rate. Something like this could only be possible with the advent of the Internet as a platform to facilitate matching borrows and lenders and Lending Club has a site that will do just that. If you go to Lending Club you can read how it all comes together and how you can loan as little or as much to whoever you feel comfortable with.
This is how social lending (peer to peer lending) works:
Borrowers that have good credit can get personal loans from a group of people who are all willing to loan the borrower part of the money. For instance, if someone needs $10,000 to complete college, they can get the loan from all the people willing chip in to loan the money. The $10,000 will not come from one person, but from 50 or 100 or maybe even 200 people who all pool their money to loan the $10,000 to the student borrower at a specified rate. The key is that the rate agreed upon will be less that it would cost the student at a bank or other lending institution and more than the lenders could get by investing the money in CD’s or what have you. Of course there is some risk involved for the lenders and that is why they should only lend what they feel comfortable with and to whom they feel has the best credit history.
Everything is automated on Lending Club and records are thouroughly checked before the loans take place. Prospective borrowers must complete loan requests and all their records, including a minimum FICO score of 660 will be investigated. Not everyone will qualify for a loan and this is to insure that only the best credit risks will get loans.
Borrowers can view the interest rate they qualify for and then list their request online so that lenders can review it and decide whether they want to participate in that particular loan. If a loan is not fully funded at the end of two weeks, the borrower can decide to accept partial funding or relist the loan for another two-week period. How this all comes together in such a streamlined online process is quite impressive.
Difficult financial times for people has been good news for Lending Club and business is booming. The demand for loans has never been higher and peer to peer lending has been a big beneficiary. Borrowers need money at an almost unprecidented rate and lenders are faced with some of the lowest interest rates ever so they can profit from this as well. If you are looking for money making ideas or opportunities this might be a place for you to put some of your spare cash and earn a much higher return than you ever could at a bank.
Disclaimer: I have not personally tried Lending Club