Saturday, Jun 14, 2008
Psst! Wanna piece of the action
cbsnews.com: More Americans Turning To New Source Of Money: Person-To-Person Lending
Justin Brown didn't think he was being extravagant when he borrowed $4,700 to buy his motorcycle. But he already owed $5,000 on his credit card and the interest was crushing. He was paying 31 percent on his credit card. And now he's paying …
"Ten percent," Brown said.
Nice idea. Would it work over here ?
Posted by angonamo @ 02:47 PM (622 views) Add Comment
10 Comments
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1. whiteknight said...
of course.
2. Landedgentry said...
Depends on who your borrowing from, the cost-benefit analysis is how much you value your kneecaps.
3. Mac said...
It does. It's called Zopa and it seems to be gaining popularity.
4. Homeliver said...
There is an internet site that already does this.
5. drewster said...
There's a website called zopa.com in the UK. Typical rate is 8.6% APR on a £5,000 loan. The hard part is finding people who are willing to lend money in the first place. I certainly wouldn't lend money to my neighbour to help consolidate his loans - if he's been reckless in the past, he's unlikely to have changed his habits! What's worse than a low interest rate? Not getting your money back at all...
6. jimmy_joe said...
zopa.com
7. angonamo said...
zopa.com
Thanks guys, can honestly say that I have never heard of this site or this people to people lending before. I will have a good look round the site but I think my feelings lie with Drewsters post. Not sure if I would want to part with my hard earned with someone I know, let alone with a stranger.
8. whiteknight said...
peer-to-peer network and ratings
possible ability to value a network gives superior ultimate recovery of capital capability
payment periodicity is ranked ahead even in times of stress
9. icarus said...
Song of the great depression - Brother, can you spare a dime.
10. drewster said...
To be fair to zopa.com, they divide your savings across at least 50 borrowers which makes it safer. They also assign each borrower a credit rating from A* to C. This is obviously the weak point in the chain - is their ratings system any better than Moody's or S&P's ratings of subprime mortgage CDOs? No credit rating system can accurately take into account the likely economic downturn ahead.