Thursday, January 17, 2008

Brains In Vegas Stay In Vegas

CES and Las Vegas were great, but my brain hasn't recovered. Instead of something insightful, you get a linkfest.

How I Overcame My Fear of Lending Money on

I’ve invested in the stock market for more than 15 years. I own mutual funds that invest in junk bonds, emerging markets, micro cap stocks and other very risky investments. I’ve lived through severe market downturns like we saw in 2000-2002. I’ve watched my portfolio balance plunge, all the while holding steadfast with my investment choices. So why then was I so afraid to lend a few hundred bucks through Prosper? And more importantly, how did I overcome that fear to become a lender?

Good customer service at Zopa

Zopa is a whole different kettle of fish. Granted, they didn't answer their phones for a few hours on Monday morning, but that's the case with Prosper too. When I got the Zopa guy on the phone, he was great, effective and to the point. He looked into why my loan application was disapproved and asked if he could get back to me - yea right, customer service does that?

Not even an hour later I had a personal email from Zopa CS, laying out the fact that they (or rather I) discovered a bug in their software. In filling out the form I made a mistake on my income, and instead of sending the "Oops" page, they sent the "Sorry, bad news" page.

You Can Lend P2P, but Can You Collect?

But I see a lot of downsides, as does Jean M. Garascia, an associate analyst with Javelin and author of its report.

"For lenders there is always the issue of default -- will someone get paid back," Garascia said.

People may be lured by the promise of better rates earned on their money without carefully considering the higher risks of this direct lending. Even with documentation, the default rate is higher than what financial institutions experience.

Peer-to-peer lending helpful, but know rules

Sometimes you have to take matters into your own hands.

At least that's the mind-set of individuals who lend and borrow money from each other online, known as peer-to-peer lending. In this virtual community you may stand a better chance of obtaining a loan for your start-up business or earning an attractive return.

But though based on self-rule, peer-to-peer lending is not without its conditions. Consider the following before you forgo the bank entirely.

At Last, a Bank of Your Own

SO YOU NEED A FEW BUCKS -- NOT DONALD TRUMP money, mind you, but a little mezzanine financing to pay down holiday credit-card debt or get you through tax season. Besides friends and relatives, have you ever considered your peers -- simpatico strangers on person-to-person lending sites like Prosper ( or Lending Club (

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