Become your own e-bank

[kcnychief]

Man this is sweet, I can see it now

http://www.prosper.com/public/welcome/default.aspx

 

[Mastershakes]

There are no guarantees that your loan will be repaid. We try to give lenders as much information as possible about the credit worthiness (or "credit grade") of the borrowers on the site, their debt burden (known as the "debt to income ratio"), and the expected default rate of a borrower with their credit grade, which is based on historical data from Experian, one of the three major credit reporting agencies.

The banks have no guarantees either I guess. Cool idea nonetheless, wonder how long it will take the banks to shut it down.

 

[mlakrid]

Either way we as consumers would win, for banks to shut them down, they would have to lower their loan rates... doing that they lower the bottom line...

Either way we win..

we make money, or get money for cheaper...

 

[Mastershakes]

or just lobby and have them shut down. period.

 

[Steevo]

Then of corse we the customer would pay for the lobbying after they were shut down, goodbye free checking........

 

[Son Goku]

This sorta thing could end up carrying too much risk for the average individual. Banks can do this, because they have depositors, and an account with the Federal Reserve, which in part backs the loans they right off. I say in part, because there is an element of "multiplying the money supply", where essentially 1 loan gets written off by another... Essentially, after the required reserve ration is set aside, the loan is considered an asset (as they expect to be paid), and then the same money is itself lent out again...

However, that they have some funds (aka your savings account), and with enough loans, they don't expect to go belly up even with a few defaults. For an individual, living on a wage, a default could be disasterious...

 

[Ferral_Imp]

Looks kinda cool though I don't know if I'd trust something like that.