Prosper Review, Peer-to-peer lending network
Prosper is an online community where people come together to lend money to each other. As a member you can borrow money from other participants, or you can lend money to other participants by bidding on various Prosper loans. The bidding system works in reverse where lenders that offer the lowest interest rate earns the privilege of lending to the borrower.
Either way, you win because you can borrow money at a lower interest rate, and earn higher interest as a lender. As of August 2009, lenders are earning an average return of 7.06%.
Currently, Prosper consists of 850,000 members and $179 million in funded loans.
Here is my first impression of Prosper: My Foray into Prosper as a P2P Lender.
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(4.00 out of 5, 4 votes)
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In addition to LendingClub, Prosper is a leader in the p2p lending space. I’ve invested in Prosper loans for about 1 1/2 years and have been very happy with the performance of the loans and how easy it is to use their website. They were in a quiet period for a long time while they registered their securities with the SEC. And now they have to register state by state, so it will take some time before investors from all 50 states can invest in a Prosper loan (the same is true with LendingClub). But Prosper is certainly a great choice for borrowers and lenders.
Better off borrowing money from the mob! Interest rates are insane! 35%….crazy
1. Prosper is a dangerous place to place money. The biggest risk is no longer related to whether or not deadbeats pay back their loans (which they do not in 40% of the cases), the biggest risk is now related to whether or not you believe Prosper can survive another 3 years (considering they are weeks away from running out of cash). Now that Proser owns the loans (read their S-1 filing), lenders are nothing more than unsecured creditors of Prosper’s debt. The fact that Prosper is close to running out of cash is more than likely the actual reason behind all the new incentives to attract new money. If lenders were making money on Prosper, this promotion would not be necessary – as the almost 900,000 members would just reinvest the 8-13% Prosper CLAIMS everyone is earning…