The US government is working on legislation that will cap the annual interest rate for payday loans to military members and their families at 36%. Wow, 36% still sounds pretty high to me! If those soldiers would just get onto Prosper.com, they could likely borrow for considerably less than that. There is already a lending group named ActiveDuty on Prosper created to help people in the Army, Marines, Navy, Coast Guard, Air Force, and ROTC borrow money.

According to a 2004 report by the Center for Responsible Lending, “one fourth of military households (26%) have been caught up in payday lending” so there is definitely a need for alternative lending in the military community. Why not help fill that need by lending on Prosper? You can check out historical group rates, active loan stats, and the group rating history to gauge your comfort with lending to members of the group.

Of course, you definitely want to look at the credit grade and debt to income ratio of potential borrowers before committing to lending any money but if you find the right candidate it’s a win/win. You can earn more on your money with Prosper than you would with a money market or CD and help them avoid the high payday loan interest rates.

Ben :: Oct.01.2007 :: Make Money, Win/Win :: No Comments »