I discovered this great resource a couple of years ago and it never occurred to me to write about here until just now when I came across a borrower whose headline is “OOPS– lost a leg“. Seems the husband of this borrower is a recent amputee and they need to do some remodeling of their home to accommodate the new set of circumstances.

The site is called Prosper. Prosper connects people who are looking to borrow money with people all over willing to loan them money in increments as little as $50. Prosper has helped thousands of borrowers raise nearly $200 million dollars in the past few years.

They essentially cut the banks out of the middle and let average Joe’s and Jane’s lend directly to borrowers earning them more interest then they would otherwise find through money market funds, savings accounts or CDs. Once loans are fully funded bidding ensues and the interest rate charged on the loan falls. Competition for your loan actually helps you to lower the interest rate!

For example, the borrower behind the title “OOPS–I lost a leg“, rocket20229 in Virginia, has already raised the $25,000 they sought and the interest rate that started out at 16.17%, has been bid down to 12.9% with 4 days left for more wannabe lenders to jump in drive the rate down further.

There’s obviously no guarantee that a borrower will get the loan they’re after funded, but it’s worth looking into as an alternative to going to a bank or credit union. Especially if you have high interest credit card debt.

Couple of other points worth mentioning are:

1) you will remain completely anonymous to the lenders and others reviewing your request. Only Prosper has your personal information.

2) Prosper handles all paperwork, funding of the loan (i.e. one lump some), and receiving your 36 monthly payments. So it’s easy as apple pie.