The co-founder of E-Loan has created a new website where people lend money to other people. He says why make 5% on your money when you can make loans to online applicants...at much higher interest rates... It's a real interesting concept and I'm thinking about trying it -- has anyone heard of this before? Or tried it??? I found the article here: Home - The Boomer Blog - We will not go quietly
While this is interesting to think about, I can't for the life me figure out how anything would be secured to protect the private lender. I'm sure they'd have ways, and I'll check out the website to see if it's mentioned. Boy, if investors could *really* get more than the bank's piddly interest, even on MMA's, it would be something definitely worth checking into.
That would be my concern, too. There would need to be SOME sort of thing in place to protect the lender. It would seem to be very much in the borrower's favor, in general.
I'd have to know that this company would approve people for loans in advance, and that if the person stopped paying that I would get the money back through the loan company. Somehow I doubt that is the case. I see a potential for major money to be lost here unless some sort of protection system is in place.
