To Be a Loan Shark, or Not to Be

Shakespeare once wrote: "Neither a borrower nor a lender be." That's a catchy line from Hamlet '" which was a play. For the record, I also don't take financial advice from The Phantom of The Opera, The Lion King or Scooby Doo.

Are you like me? Have you always wanted to be a Loan Shark, but couldn't get past the idea of thumb-breaking, curb-stomping and knee-cap busting?? Or maybe you are the Shark-ee - you dabbled in a li'l deficit spending of your own and are looking for a way to slash the huge interest you are now paying on your credit card debt.

Whatever your situation, today's ChipsMoneyTips are for people who have money and those who do not - which technically is all of us. I'm talking "Peer 2 Peer" lending. That's where regular people lend and borrow money, to and from each other, at much better interest rates than what you'd get at a bank: higher interest for the lenders than what the banks give you on your savings or CDs, and lower interest for the borrowers than what a bank would charge.

It's like having a loan with a family member, but without the uncomfortable leering at Thanksgiving Dinner when news of "The Jet Ski Purchase" slips out.

Peer to Peer lending is thriving, especially with banks tightening their lending guidelines. Two of the most popular P2P companies, Lending Club and Prosper, generated more than $500 Million in personal loans over the past five years. (Wall Street Journal June 16, 2011) This is a great way to effectively lower your credit card rate, or a chance to play "Angel investor" and help fund someone's business venture, or just help someone out of a financial hole.

Hey, sometimes you have to borrow and sometimes it's good to lend. P2P lending is a win-win. It's like a Reese's Peanut Butter cup: two things coming together to make something great!