Paul asked:


Personally, I think that peer-to-peer lending is an excellent idea. It increases the return for investors and reduces the rate for lenders (vs banks). It is also perfect for small loans and short-term loans, which banks don’t even offer. My biggest concern is that everything has a time and place, and this is DEFINITELY not the time (for potential lenders), although hopefully the US will become the place.

Internationally, Peer-to-Peer defaults are <5%. I wouldn't be surprised if they were in the 20%-50% default rate here and now. We already know that the average US consumer spends more than they earn (incredible!). So what happens if they are able to get money on the internet and faced with a choice like this:

a) pay mortgage
b) pay car loan
c) pay for food
d) pay for gas
e) pay anonymous lender on the internet

So while 8%-20% rate of returns are tempting, I would wait until the attitudes (and debt) adjusts before getting into this in the US. What are other opinions on the subject?

p2p lending