How to Borrow Money from Your Family
A new type of lending is catching hold using the power of social networking to connect borrowers and lenders. Peer-to peer lending connects individual lenders and borrowers at rates that are often more attractive than those of banks or credit cards. It attracts borrowers who are trying to consolidate debt from high-interest credit cards at a lower rate and lenders looking for a higher rate of return on their invested money.
Sites that facilitate this type of lending include zopa.com and Virginmoney.com. At Zopa.com, investors become members of a credit union and are able to insure their investment because funds are put in to a CD. Investors can choose who they want to loan money to. Rates however around a rate of 5%. Virginmoney.com focuses on facilitating loans between family and friends. You provide the funds, and virginmoney will take care of all the paperwork, legal documents and payment processing.
Its an interesting new concept and the idea of having a third party facilitate loans between family members is a smart one. These types of loans carry a lot of emotion and a service like this can help take some of the emotion out of it.
How to use peer-to-peer lending sites to borrow money - MarketWatch
