There are now “peer-to-peer” lending websites that allow people to borrow money at competitive rates from lenders online. There is the site prosper.com, which allows the market to decide who gets funded. The site lendingclub.com is for borrowers with a FICO score above 640 and has a debt-to-income ratio below 30 percent. The site virginmoney.com manages loans between friends and family members. The site zopa.com works with credit union members.

The consequences of defaulting on a peer-to-peer loan are the same as a loan from a bank. Defaulting on a loan can have a negative effect on the borrower’s credit history.