The Web is becoming more than a community of content and ideas: it's becoming a financial community as well. The latest example of this is Prosper, the site for peer-to-peer lending.
If you need to borrow money, Prosper lets you make your case to the community of lenders. Just like getting a traditional loan, you'll have to give up some financial details and allow the system to run a check on you. But unlike a bank loan, you're also able to make a personal appeal to Prosper users. You select the maximum rate you're willing to pay and see if anyone bites.
If you want to lend to Prosper users, you get to select the stories and credit risks that appeal to you. You can easily spread your lending stake among dozens of borrowers, reducing your risk. Launching tonight is an enhanced version of the "standing order" feature, which lets you automatically disperse loan funds to borrowers that meet your criteria.
Currently, Prosper is being used a lot by people who can't get good loans from traditional lenders, mostly for debt consolidation. If more people start using it for loans on things such as vacations and education, it could begin to have an impact on many parts of the finance industry, from how people finance major purchases to how they invest for their retirement.
There's a good story about Prosper on Salon.