(Guest post by Miranda Marquit)

The Internet is full of ideas that purport to help you make money online. And one of the more interesting ideas for making money online is to lend your money to other people. The idea is that you can make loans to others, and then get your money back — with interest. The Internet provides a place for you to connect with those that need money, allowing you to find a wide variety of people to lend money to. The Internet is making it possible for you to more easily make money the same way other lenders do.

Microloans to those in poverty

Microloans are my personal favorite way to make money online by lending to others. This is because you can help someone in a poverty stricken area of the world get the capital he or she needs to improve his or her situation. There are many reputable organizations like Grameen Bank and Kiva that can help you find — via the Internet — entrepreneurs in impoverished countries that could use your money. It’s not a hugely sexy return, averaging about seven percent, but it is a return. And the warm feelings you get from helping someone else find a loan that they can handle (rather than leaving these folks to the mercy of usurious sharks) are priceless.

Lending to those in less “needy” circumstances

Another way to make money online through lending is by sharing your resources with the more affluent in the developed world. You lend money (at a higher rate than microloans) to someone who might want some cash for debt consolidation or a vacation. They make payments into your account, and you earn a return through interest, plus the money you lent is paid back. Programs like Prosper Lending and Fynanz (for student loans) let you use the Internet to find those that want loans, and facilitate the payments. But the risk (like the return) is higher with these programs than with microloans.

If you have some extra cash lying around and you want to see about earning a return on it, you can consider using the Internet to turn it into an investment. Of course, you can also visit the Web site of an online broker and set up an investment account as well.

Miranda Marquit is a freelance writer and professional blogger. On the b5media network, she writes about personal finances for Yielding Wealth.

This post is originally from Just Make Money Online. Please respect copyright.

Make Money Online — By Lending Money to Others