Did you know that you can borrow or lend money through online communities? As an innovative idea based originally on an old concept, social lending has been a ray of sunshine during turbulent economic times and has become a popular resource for loan money. As a convenient base, social lending offers borrowers low interest and a comparatively higher interest than a CD’s for the lender. With a psychological side to it, borrowers feel that they would rather pay an individual than an institution, while lenders earn better returns and at the same time have the chance to help someone who is in need of the money.

Social borrowers are normally people who cannot pay a high interest and cannot borrow from conventional sources because of poor credit. They have various reasons for borrowing money that range from high to low expenses. Social lenders on the other hand like to lend money like a bank, but have the facility unlike a conventional institution such as the advantage of short-term returns and an opportunity to help people who need the money for personal and important reasons.

Social lending sites are available in almost all the important countries though some of them do not accept new lenders. The more popular social lending sites in USA are Prosper.com, Lending Club, Loanio.com that reflects Prosper.com bidding method and a co-sign alternative, Circlelending offers friends and relations documented loans, while GreenNote and Fynanz give out student loans. Zopa.com offers secured loans, Kiva.org like MyC4 deals with microloans to third-world countries around the globe with amenities of choosing borrowers and MicroPlace.com offers secured loans. Though quite a risky venture, social lending has options such as lending out money in small amounts sometimes as low as $50 to borrowers who need the money urgently and quickly. The borrowers can add to their credit score by paying on time as punctuality in payment is reported to the credit bureau like banks. With increased number of social lending sites, borrowers can enjoy the security and the facility of acquiring money on time from reliable sources