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January 28, 2008
Prosper has been prosperous
I was talking with my friend Mike the other day about how his loans are going with Prosper and realized I haven't really shared information with the rest of the world. I discovered it quite a while back while researching the world of microlending. Rather than purchasing a goat for a family in Africa, I discovered a whole world of lending going on right here in the US.
I was intrigued by the seemingly incredible rates of return so I tossed a couple hundred into an account and started playing. After I found it actually worked, I told Mike about it and he went whole hog.
While my Prosper account is still under $1,000, Mike has an elaborate system whereby as loan payments are made, they fund new loans and his portfolio just keeps increasing. Neither of us has had anyone default on a loan yet (although he had a couple of late payments.) I think it is because we have both created rather strict guidelines for the types of loans we will fund.
Bottom line is that I am getting over 18% return on my money, which is a far cry better than even the best savings account - and don't even talk to me about the stock market. Anyway, there it is... for more details you can check out their website, but I have to say I am very pleased so far with Prosper.
I also found a link on the loan that I funded tonight that will give new lenders $25 for signing up.
Posted by CDogg at January 28, 2008 08:59 PM
Comments
Hey, I'm glad you brought it up. We came into some money (nothing huge, but enough to think about how it gets used) and I've been thinking about putting a chunk of it to work at Prosper. The return rates do sound excellent, but honestly, I'm a friggin hippie dogooder who'd just like to know joe american is using it for something reasonable, instead of a banker rolling around in it (or, better yet, using it for amazingly stupid loans, to judge from recent events.)
Posted by: Random at January 28, 2008 11:02 PM
Yeah, that is part of what I screen for when making a loan. There are a boatload of really stupid loan requests out there - as you will see. I make it a point not to loan on things like "expanding my business" because I have been around business long enough to know those are scary. Oh yeah, and if you can weed through all the sob stories... there are chances to do some good too.
Posted by: Chris Doelle at January 29, 2008 06:10 PM
I'm glad to hear you are doing well on Prosper. I have to wonder though - 18% is a pretty high rate. What credit grades are you lending to?
My brother and I run a blog about p2p lending that you may find interesting. He has written some good articles including this one about risk management that a lot of people have enjoyed.
http://prosperlending.blogspot.com/2007/06/prosper-hands-on-education-on-risk.html
Also, I don't know if you have heard about Lending Club. It's much like Prosper and they are also offering a $25 sign-up bonus.
You can find a referral link for Lending Club on our website if you need one.
Posted by: Tom at January 29, 2008 07:18 PM