With the United States’ economy flirting with the word “recession”, people are looking to get out of debt. Banks aren’t always eager to give out loans for things like paying off a credit card, and this situation has given rise to social lending. Some sites let you collect interest as the lender, and some simply give you the opportunity to help someone out. If you’re interested in lending money online, we’ve got five such services for you to look at.
Kiva.org – This site is strictly for lending to entrepreneurs in developing countries such as Nicaragua an Uganda. All loans are handled through microfinancing companies that handle all of the funds moving back and forth. There is no interest earned on these loans, but it does help people just starting out with their businesses.
LendingClub.com -Allows you to lend in increments as small as $25 to the borrower risk level of your choice: the higher the risk, the higher the return can be. This company does check the credit score of borrows and allows no one below a 640 borrow. For those above 640, if you are carrying too much debt, you will also be excluded.
Prosper.com – Prosper works with no set interest rates as you bid to be part of the loan. The borrower sets how much they need, and what the maximum interest rate they are willing to pay. In turn, lenders bid down the rate, and once the bidding closes, the lenders with the lowest rates are combined into a three year loan for the borrower.
VirginMoneyUS.com – If there was ever a rule in life, it is do not loan money to family or friends, Virgin Money attempts to make it so you can by formalizing the process by handling loan documents, payment processing, reminder emails, and year-end statements, and you get to keep the interest earned in your family or circle of friends.
Zopa.com – Available to residents of the United States, United Kingdom, Japan and Italy, Zopa is probably the most complicated of the five as it requires you going through a credit union to buy a 12-month CD, and then you determine how much of that money will go to the borrower of your choice.
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