Forget the Banks, Get that Loan from a Stranger
With banks no longer able to extend the kind of credit that ultimately got them in trouble in the first place, people are suddenly looking for a lending alternative that won’t involve tracking down a member of the Gambino crime family. Fortunately, they haven’t had to look too far to find a potential financial lifeline.
Peer-to-peer lending has filled some of the credit vacuum left by established financial institutions in the midst of the current economic crisis. Both local and online brokers have managed to eliminate the middle-man by offering smaller loans at larger rates of interest, generally reported to be between 9-12%. A recent story in the Seattle Times profiled Scott Langmack, an independent lender who has used LendingClub.com to lend more than $600,000 through roughly 1,400 unsecured loans, only two of which he claims have been defaulted on. It’s players like Lanmack who have directly contributed to a new peer-to-peer lending industry that analysts say could grow to more than $100 billion in annual loans by 2012, up from about $500 million this year.
With banks increasingly on the periphery and borrowers looking for smaller, stop-gap lending solutions, a number of online players have risen to the fore in the United States. Another popular site, Prosper Marketplace, uses an auction-style p-to-p format
The Securities and Exchange Commission has been keeping a watchful eye on these sites. In November, Prosper received a cease-and-desist letter from the SEC, saying that the lender had violated the Securities Act. This month, Prosper ended its nine-month hiatus by settling with the SEC and reopening its lending business in a number of states.
An interesting extension of social networking, the micro-lending trend could prove to have a greater influence in the third world, where there basically is no credit. This has been best-demonstrated by Kiva.org, the very first micro-lending web site which was extending credit to entrepreneurs in the third world long before the credit crunch hit in the west. With a number of westerners feeling the financial pinch, it looks like this could become a prominent global alternative without the use of a large bank. And all without the help of a loan shark named Sal.
Scientists have developed new ways of understanding how the biological forces of death drive important life processes.
- Researchers have found new ways on how decomposing plants and animals contribute to the life cycle.
- After a freak mass herd death of 300 reindeer, scientists were able to study a wide range of the decomposition processes.
- Promoting the necrobiome research will open up new areas of inquiry and even commerce.
What do we see from watching birds move across the country?
- A total of eight billion birds migrate across the U.S. in the fall.
- The birds who migrate to the tropics fair better than the birds who winter in the U.S.
- Conservationists can arguably use these numbers to encourage the development of better habitats in the U.S., especially if temperatures begin to vary in the south.
Explore how alcohol affects your brain, from the first sip at the bar to life-long drinking habits.
- Alcohol is the world's most popular drug and has been a part of human culture for at least 9,000 years.
- Alcohol's effects on the brain range from temporarily limiting mental activity to sustained brain damage, depending on levels consumed and frequency of use.
- Understanding how alcohol affects your brain can help you determine what drinking habits are best for you.
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