EUGENE-- Ryan Koch owed four thousand dollars in medical expenses--and the stack of bills was mounting.

"They were piling up," said Koch. "Medical insurance took care of most of it, but with the amount that was left over with the income I'm on, it was really difficult to pay them on top of all the other bills I have."

When the Eugene customer service agent began searching for a loan, he didn't walk into a bank.

Instead, he let his fingers do the walking--online to Prosper.com, a peer lending website.

Thousands of people like Koch have registered with the site, asking for loans to start businesses or pay off debts.

Thousands of others have signed up to help them do so.

Eugene resident Ralph Zach became a lender last summer. To offset the risk, he loans only small amounts.

Currently, he has a total of $1200 out to 15 people.

"If you have a lot of loans, then you're really spreading the risk across a lot of loans," said Zach. "If one or two of them default, it's not the end of the world."

Here's how the site works:

Prosper.com evaluates a borrower's credit and assigns them a grade based on their risk level--the higher the grade, the lower the interest rate.

Lenders then bid to fund the loan--at an average interest rate of about 10%

The investment opportunity is why Zach registered to become a lender. He also sees it as a chance to help people.

"Usually what they're trying to do is establish credit rating or improve rating," said Zach, describing the people he chooses to lend to. "A lot of them are involved in high interest student loans or payday loans."

The website is thriving on this generous spirit.

Within three days, Ryan Koch received enough bids to pay his medical bills. He'll pay his lenders back--but will forever be in their debt.

"It's really cool, I mean people you don't even know are willing to help you out," he said. "I have someone who gave $250 bucks. It's very nice."

Prosper.com profits by collecting loan servicing and loan closing fees.

They also report to credit bureaus and use collection agencies to encourage borrowers to make good on their loans.