Prosper.com
Prosper.com is
a financial website that connects private
investors with individual loan seekers in
the first US based peer-to-peer lending
service. The allure of this type of
lending system is that borrowers with poor
credit scores can obtain loans at much lower
interest rates than they could get from
banks or mainstream lenders.
Conversely, lenders are presented with an
opportunity to earn substantial returns on
their loaned funds. As a lender
Prosper.com allows you to set your own
interest rates based on your calculation
of a risk/return ratio (Max 29% or State
Max). To facilitate this process each
borrower is given a credit grade based on
their Experian credit report.
In addition, Prosper provides a borrower
feedback system much like in eBay, so for
instance a borrower that defaults on a loan
will have a poor score. You can also
engage the borrower in a Q&A to find out
their reasons for needing the loan and their
plans upon receiving it. This helps
lenders get an overall picture of the amount
of risk they're dealing with.
Overall, there are pros and cons to the
Prosper.com lending system. The
pros are that investors can potentially get
over 10% on their investments while helping
everyday people start businesses, flip
properties, or resolve debts.
The downside is that despite credit checks
the system has some potential for fraud,
abuse, and loss of capital. Furthermore, there's such a high demand for
grade A borrowers that lender competition
forces their rates below profitable margins.
This pushes investors to seek profits from
less secure borrowers.
However, there are methods for greatly
limiting your risks when lending at
Prosper.com. One strategy that limits
risk is diversification, if you spread your
loans out then even if one happens to be
late or defaults you can recoup your losses
from better loans. Also, you can lend
to borrower groups which tend to have much
higher scores and great payback histories.
If you're interested in becoming a lender at
Prosper.com I would recommend
spending some time in the lender's forum
first. You can learn a great deal from
other peoples' trials and errors.
If you're at Reviewopedia.com because you're looking for a way to make money online then check out our article "7 Ways to Make Money Online" - methods that anyone can use to earn an income from home.
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Customer Responses, Reviews, or Complaints for
'Prosper.com'
Average Rating is
2.33
out of
5
based on
3 reviews.
Tom Brown Lynchburg, VA | 12:19pm on August 31st, 2009  | I reviewed Prosper.com because I was considering becoming a lender. It boasts "transparency" but makes it nearly impossible to uncover the fees they charge to lenders. I finally found the info somewhere around page 54 of the prospectus. I wanted to find out if there were any other fees so I went to the "contact us" link TO SEND MY QUESTION IN AN EMAIL. They won't let you send an email unless you're a member, but they don;t disclose enough info to decide if I want to be a member. Catch-22! This hypocrisy about transparency and the building of barriers to prevent effective communication set the warning bells ringing, and I won't do any business with Prosper.com |
Melodi Maine | 1:10pm on October 18th, 2008  | I have gone through prosper if it wasn't for that site i would have been on the streets and without a job. They granted me a 4000 loan and it comes directly out of my account so i don't have to worry about making payments on time and it counts toward my credit score. Thanks prosper.
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Tom New York | 8:11pm on April 1st, 2008 | Don't bother borrowing with Prosper unless you have perfect or near perfect credit. All the lenders that would lend to "less than perfect credit" individuals are gone because of the fraud and the number of lenders is decreasing. If you are lender, be careful because even the A and B credit individuals are defaulting on their loans. |
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