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Lending Club, a P2P lending community on Facebook, seems to have found some early popularity among the social network's users.

Lending Club launched when Facebook opened up to widgets on May 24th. Since then it has approved 27 loans worth over $100,000, with $212,650 in lending due to go through in the next 12 days, according to TechCrunch.

Social lending is steadily gaining popularity as an alternative to traditional methods - Zopa is already well established in the UK, and recently raised money to expand into the US.

On Zopa and other social lending sites, lenders are asked how much they are prepared to lend, whom they want to lend to, the period and loan rates etc. Borrowers then go to the site and choose from the range of loans on offer.

The risk for borrowers is reduced by the fact that loans over a certain amount are spread across several lenders, and loan applicants are credit checked. 

According to The Telegraph, Zopa has 150,000 members, one third of which are lenders.

A survey carried out last year by the Social Futures Observatory studied Zopa users and general banking customers, finding that 74% of would consider using an online social lending service for loans, rather than a high street bank, while many were unhappy with high street loan rates.

Graham Charlton

Published 21 June, 2007 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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