Would you invest in other people?

That is really cool... Pays better than a CD. What happens if the borrower doesn't pay? it never really says.

chucky, we have this thing called a stock market.....

not high enough % for the high level of risk. but hey if you like that risk, i got some old enron stock to sell....

Edited by tyrant 2006-03-01 8:23 PM

To me the issue is LEGAL collateral. That is my main legal concern, i would not want to go to court without a REAL backing legaly. (seeing a 50 yr old judge cracking up and talking about internet scams....)

Looks like you're just taking an unsecured position. Only real penalty of failure to pay in the near term being a further pounding of a credit history that is already worthless... Would be interested to give it 12 months to see it build a history and get going.

Like so many financial products this just appears to take advantage of the retail investors inability to correctly price the risk, though part of that risk pricing comes from ability to diversify and it does give you that.

I'm in the stock market, real estate, and am a partner/investor in a few ventures. But the idea of this site intrigues me. The pitfalls to me are:

1. I don't actually get to see the credit report or the credit score. The credit score is abstracted to a letter grade. It's one thing to see a "B" rating because of a bunch of credit card debts and quite another to see a big ding because of a failure to pay a huge hospital bill. Also you don't get to see how long it's been since someone "cleaned up their act" so to speak. If they were dinged for something they did three years ago, maybe I'd give them a chance.

2. Is the person who they really say they are? How can I be sure? Just because the site says they are doesn't mean that the website did their due diligence.

3. You never get to look the person in the eye. So much unspoken communication can occur. I would like to shake the hand of the individual that receives my money and gauge for myself the character of the man (or woman).

So what did I do? Nothing, just gonna keep my eye on it and maybe even start a site like that on my own. The site collects 1% which seems like a nice cut. If anything, the site is the real winner.