Prosper.com

[jono]

the search button is not that hard to use

[maxtower]

I think once the idea of prosper matures a little, it may become a legitimate place to put money. The problem now is that too many lenders aren't using enough discretion and drive rates too low. It is definitely a better deal for the borrowers at this time. If I were going to do it, I would look for borrowers who have a reason to pay the money back. You want to find people who want uncollateralized debt for some reason, not the folks who have no where to go but prosper.

[Shoe]

I have dabbled a bit at prosper.

I have made a total of 6 loans for ~ $400.

So far.

1 loan is paid off early.
1 loan is in collections (~ 2 months)
4 loans are still current.

I can't remember my average loan %, but I believe it is around 16%. If the rest of my loans don't default I will come out just barely ahead, otherwise I will be down. Considering other places I could have put my money, I definitely could have made more money elsewhere.

Prosper CAN be a place to earn a decent return on a small amount of money, if you research your loans properly. But if you are only willing to invest $50 - $100 per loan, it is not even worth your time to research that loan. I have done some analysis on the loan data they provide (I think it is called prosper marketplace performance or something like that), and for the most part, as long as you only select loans from people who do not currently have any delinquencies, have not had any delinquencies in the last 7 years, and do not include auto-fund loans, you lower your expected default rate by almost as much as possible. You might be able to tweak the system a bit more, but those are the only searchable options I found to make a statistically significant difference. However, those loans also get bid down like crazy now a days.

I also try to avoid any sob stories (sob as in crying/whining). If you try to bail someone out who can't currently make their payments for reason x, they are just going to give you another sob story in a couple months. Try to find people who really seem to be on the right track (although of course you can't tell if they are telling the truth or not).

I personally believe you are much better off investing in the stock market. Much higher potential rewards, with less risk, while at the same time having more liquidity (you can't sell your prosper loan if you need the cash -- you are potentially stuck receving the minimum payments for the next 3 years)

All that being said, if you decide to invest in Prosper, I wish you the best of luck.

[pureCra2z]

[ QUOTE ]

I personally believe you are much better off investing in the stock market. Much higher potential rewards, with less risk, while at the same time having more liquidity (you can't sell your prosper loan if you need the cash -- you are potentially stuck receving the minimum payments for the next 3 years)



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eh?

[Henry17]

[ QUOTE ]
Prosper CAN be a place to earn a decent return on a small amount of money, if you research your loans properly. But if you are only willing to invest $50 - $100 per loan, it is not even worth your time to research that loan.

[/ QUOTE ]

That was one of the first things that hit me. $100 at 20% is $20. If you need to read 5 profiles to find one that is good you have waste 30 minutes. If I wanted to make $40/hr I'd get a job. At least with a job you don't have to worry about defaults nor wait a year to get your $20. I figure Prosper.com is more for people with limited cash who want to feel like they are "wheelers and dealers".

I personally enjoy reading the sob stories. I wanted to start a site BegForMoney.com where I'd offer people the option to present their sob story and give money to the best sob story of the month but my GF thinks I'm mean to poor people and wouldn't be happy.

[polkaface]

the 20% is semi-misleading. They are principal paydown loans so that 20% that first year might get you $18 in earnings.

[Shoe]

[ QUOTE ]
[ QUOTE ]

I personally believe you are much better off investing in the stock market. Much higher potential rewards, with less risk, while at the same time having more liquidity (you can't sell your prosper loan if you need the cash -- you are potentially stuck receving the minimum payments for the next 3 years)



[/ QUOTE ]

eh?

[/ QUOTE ]

eh?

Loaning money on prosper is a form of investing.

I think the stock market is less risky than giving out unsecured loans to poor credit risks over the internet.

You can sell your stocks if you get in a pinch for cash. You can't sell your prosper loan.