Finally, there is also an opportunity to profit by giving out loans. This includes mortgage loans. A business could be set up that allows investors to pool their money together and give out loans. The profits would come from the interest that is paid once the loan is repaid.
zopa.com? lendingclub.com ?
peer2peer lending is a thing already.
As someone who used to lend on Prosper, I'd advise to stay away. There's a reason a lot of these people can't get loans from banks.
Seconded. Prosper was a pretty decent way to invest early on but the lack of ability to get judgements and ever increasing default rate chased me from it. The bit coin lending platforms seem too similar for comfort.
You must be talking about pre-2009, that was when the default rates at Prosper were through the roof. After they came out of SEC registration in Fall of 2009, loan quality was greatly improved and defaults lowered dramatically. Today, I'm making a little over 12% there now, a damn sight better than a savings account!
12% after you factor in the default rate or before?
How does lender go after deadbeat in a peer to peer lending platform?
I am sure that the 12% is before factoring in the default rate. The expected value of all prosper loans is much lower then this, but still better then a savings account.
The lender does not go after a borrower who does not pay their loan (with prosper), but prosper will first attempt to collect with their internal collection department, and if the loan falls a certain amount behind then it will be sent to a collection agency.