There are people who borrow money and people who save money and they all used to go to the bank, but now that is changing, you can lend directly to the borrower and for this there is LendingClub.com, a peer to peer loans marketplace.
The mechanism is that instead of going to a bank to deposit your money or to apply for a loan you go to a place where depositors meet borrowers directly. On Lending Club you can browse and select who you want to lend to. You can lend to a few borrowers or to many so you can diversify your risk.
If you need to borrow, you go to Lending Club, enter your information and they do a risk analysis and rate you as a borrower. No matter what is your credit risk level the cost of your loan, the rate, will be lower than a bank.
As an investor the return you get is much higher than a bank also: Lending Club investing has yielded between 5% and 12% depending on the borrower ratings since it started while banks have been paying no more than 1%.
In today’s digital economy it doesn’t make sense to stash your money only at a bank any more, there are many new options to bypass the middleman and peer to peer lending is one of them.