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#1
12-29-2006, 11:05 PM
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prosper.com
I'm sort of surprised there hasn't already been a major discussion about prosper.com. I think it's a groundbreaking brilliant concept, executed well.
I've had money lent out on prosper for about 4 months now, and so far have been very pleased. I have about 80 loans total. There have been some late payments, and 1 which is over 2 months late. Overall I currently have 1 payment which is less than 15 days late and the one which is 2 months late. Each loan is worth $50. The remaining 80ish loans carry an avg interest rate of 18%. Does anyone else here use prosper to borrow or to lend? 
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#2
12-30-2006, 12:14 AM
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Re: prosper.com
I had never heard of it before. I just checked it out and am intrigued.
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#3
12-30-2006, 12:33 AM
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Re: prosper.com
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#4
12-31-2006, 09:33 PM
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Re: prosper.com
I put $1600 into prosper in June. I have 32 loans. 1 is late, but has been late before and is still making payments so I think it probably won't default. 1 is 3+ months late so I'm pretty much considering that a loss.
I went for higher risk loans so my avg. interest rate is around 20% right now. Although, I'm focusing on borrowers with better credit scores right now to balance out my portfolio. Overall I'm a little dissapointed with prosper. Mainly because it seems like my money spends a lot of time sitting around not earning interest. It takes a month for my payments to build up to the $50 minimum needed to bid on a new loan. After that it seems to be averaging about 2 weeks from when I first place a bid to when a loan gets funded. Right now I'm planning on waiting another 6 months before I decide whether or not to put any more money in. Mainly I'm waiting to see what happens with my defaulted loan and what default rates are like overall. I'm sort've leaning towards not investing more money. I mean 20% interest looks good, but after factoring in defaults, time while your money is tied up in bids, and taxes I'm not sure that investing in prosper is any better than putting your money in a Vanguard mutual fund.
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#5
01-01-2007, 08:27 PM
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Re: prosper.com
Do you use standing orders to lend? This really reduces the amount of tiem that your money is tied up.
Your argument carries a lot of weight if you aren't investing significantly more than $50. If you are investing a lot, however, waiting to have $50 before reinvesting isn't as big of a loss.
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#7
01-01-2007, 09:22 PM
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Re: prosper.com
How come I only see like 20 listings looking to borrow? I just started looking at this site recently..am I missing something? Or are there really only 20 people to loan to?
I may throw $500 on here and mess around with it.
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#8
01-01-2007, 11:30 PM
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Re: prosper.com
They show like 20 featured listings on the main page or something, if you run a search there are many more listings. I have not yet invested there but am pretty intrigued by it all and will probably soon.
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#9
01-02-2007, 01:50 AM
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Re: prosper.com
[ QUOTE ]
Do you use standing orders to lend? This really reduces the amount of tiem that your money is tied up. [/ QUOTE ] I do all my bids using standing orders, and I actually think that it leads to my money being tied up more than if I was bidding manually. ie. A standing order might put a bid on a AA lender who initially lists at 15%. If I looked at it, I would probably skip that listing because I know it's going to be bid down to an interest rate that I'm not willing to accept. However, it will take a couple of days for the loan to fully fund and for me to get outbid, so my bid gets tied up, and then the whole thing might happen 2 or 3 more times before I get a winning bid on a loan. In the end it takes around 2 weeks from when my account reaches $50 to when I get a successful bid. That means that 1/18th of your porfolio is not earning interest at any one time. It's not a huge deal, but it does drop your rate of return by like half a percent which will add up over time.
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