I like that a few say the reason for the loan is breast augmentation. I'm going to make my petition for goiter removal. I'll post a pic from the Seinfeld episode.

Problem is they are unsecured loans
 

Aside from that, this is not unlike the trust deed loans. They are basically like a second mortgage, but they are funded by individual lenders. Say Joe Blow's credit score is too low to qualify for a traditional home equity loan for home improvements. Joe can instead borrow money from Jack (thru a firm that handles all administration) at a higher rate than a regular HEL would cost. The loan is secured by Joe's title on his house. If Joe defaults, Jack gets Joe's house. During the course of the loan (typicall 3 years) Jack gets a monthly interest payment, and at the end of 3 years, Jack gets all the principle back.

This site is the same principle, those that can't get loans thru normal means get loans from individuals, at higher rates. No way in hell I loan money to a stranger though, unsecured.

Prosper.com is rad.

After I closed out my 12dailypro and Stormpay accounts, I went straight over to prosper.