People-to-people lending

The recent credit-crunch affecting present and prospective homeowners, especially in the USA, is reinforcing the role of social-lending (or people-to-people lending) as opposed to mainstream credit markets. Social lending has been offering borrowers cheaper credit than they could get elsewhere, as lenders in this credit model are not seeking solely to maximise returns. Intriguing is that social lending firms have been capable of assessing risk better than they mainstream counterparts, presenting default rates lower than the major banks.

Visit these social firms: Prosper and Zopa.