Be the bank!

In the midst of the current financial crisis comes a new investment vehicle. It's Peer-to-Peer (P2P) money loans, where you can literally loan money like a bank does to strangers. Featured on CNBC, a website called Zopa.com has created a process where investors can easily buy a Zopa Certificate of Deposit (CD's) and then decide who receives help by using some of the return money to aid borrowers repay their unsecured loans.

As a borrower, you simply sign up for an account and post your "Facebook" type of profile and your reason for the loan, which is usually a personal story. Based on the credit score, the borrower receives an unsecured loan at a competitive interest rate and then hopefully receives help from investors, who get to choose who they would like their return money to help which reduces the total amount of the loan + interest.

As a lender, you get a nation-leading, guaranteed & insured 1 year return (3.75% which is slightly higher than the national average of 3.1%) from the Zopa CD and a chance to choose who your money is helping. A lender can feel good about knowing that his/her money is helping a medical student pay back his school loans, or a mother of 2 start a baking company.

*NOTE*
There are other P2P websites like Prosper.com, which allow you to actually lend money directly to a borrower at the winning bid's interest rate however, this lending model exposes the lender to possible fraudulent loans and does not gaurantee the safety of your money the way Zopa.com does by using CD's.