Borrowing & Lending Money with Prosper & Lending Club

March 22, 2008

Peer to peer lending is making an impact on the way some people borrow or invest their money and the word is spreading about both Lending Club and Prosper.

Within the last week and a half, person to person lending has seen coverage on the CBS Evening News, the Wall Street Journal, and

  • In Credit Crunch, Lending To Each Other – More Americans Turning To New Source Of Money: Person-To-Person Lending – CBS News
  • Where Either a Borrower Or a Lender Can Be – Wall Street Journal
  •  Business Loans Get Personal – Entrepreneur

While CBS focused more on the ability of individuals to borrow and lend money, the Wall Street Journal article looked at both entrepreneurs and consumers, and covered how small businesses are using peer to peer lending to raise capital. 

The CBS report estimated the size of the peer lending industry to be about $1.6 billion dollar now and expects it to grow 800% in the next 2 years. One things for sure, if Katie Couric keeps reporting on the industry, that will speed its growth.  The next thing Chris Larsen (Prosper CEO) and Renaud Laplanche (Lending Club CEO) need to do is get on Oprah : )

You can watch the CBS clip below:


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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2 Responses to Borrowing & Lending Money with Prosper & Lending Club

  • Trace Gunsch

    Most investing approaches are a form of gambling. So are life, auto and health insurance, if you really look at them. The banking industry has a much better established procedure for verifying good lending candidates, but the first banks operated in a manner not too dissimilar from Lending Tree. I see P2P lending as a classical Disruptive Technology that will diminish a lot of loan officer jobs and bank profits, just like Expedia did to the travel agent trade. Sure a professional loan officer is going to make better judgments than me, just like a travel agent can make better selections about trip options, but I can learn, and I’ll save/earn a great deal of money doing so. The Internet strikes again…

  • Anonymous

    My impression of is that it’s a form of gambling. You, the lender, take a considerable risk depending on the borrowers credit. Most of us aren’t as good as loan officers, and we’re taking the chance of losing our principle for just a few percentage gain. It’s a win-win for Prosper, of course, but for the lenders I believe there are less risky investments. Of course, you could just lend to the AAA people, but then you’re just getting CD rates, and that’s no fun at all.