One of the growing trends right now in the lending world is person-to-person lending (P2P lending). This is where you lend money to someone else who needs a loan. It is one way to get returns on an investment, since you make money off the interest that the borrower pays.
Indeed, there are many P2P lending Web sites that allow you to connect with people who may need loans. These are sites like Prosper and Lending Club. You can look through profiles of people that want to borrow money, and decide how much you want to advance them. As the borrower pays back the loan, you receive returns in the form of principal plus interest. Often, P2P lending charges less interest than traditional banks, so it is a nice choice for borrowers.
There are twists on P2P lending as well. Microloans to the poverty-stricken provide ways for you to fund entrepreneurs in third-world countries. There is a new social lending site, Green Note, that allows you to contribute to college expenses for those who are experience a “funding gap.”
It is important to note that, while P2P lending can be a great way to help others while establishing an income stream, there are risks. You have trust that the person will pay you back, without defaulting on a loan. Remember that some (but certainly not all) borrowers can’t get loans from elsewhere for a reason. It is also important to note that the returns you receive are rather modest. But in a stock market that is rather volatile, it might be nice to get any returns at all.