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CrowdFund Your Credit Card Debt

NEW YORK (TheStreet — Here’s the situation. You’ve unintentionally run up some credit card debt and the interest is so high that it seems like you can’t get ahead. Your big bank has no desire to help you out, and you wouldn’t dream of asking a friend or family member to help you out of this jam. But what if a crowd of random strangers steps up? That’s exactly the scenario at sites like Prosper.com and LendingClub.com. Borrowers apply for loans and the websites screen the applicants to make sure the lenders will pay the money back. Only 10% get approved, so it’s not a layup if you have poor credit, or you can’t prove your income. Investors buy notes made up of these loans, then sit back and collect the interest. This option is welcome news for some consumers who have run out of ideas. The latest Household Debt and Credit report from the Federal Reserve Bank determined that borrowing on credit cards increased $8 billion in the most recent quarter to $668 billion. Fueling the thirst for charging more, available credit limits were also expanded to $2.13 trillion, the highest level since 2009. While the number of delinquencies […]

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