Earn 7.75% on your investment of $50 to $9k

SpecialOne · #1 (**permalink**) 03-05-2006, 12:16 PM

I don't know if any of you have heard about the new site Prosper. If you have, I would ask that you check out my listing. I realize the APR is a bit low, I wanted to put in 10% but the state of Minnesota restricts it to 7.75% apparently. So I am hoping to still get the loan funded, and am going to travel the internet spreading the word. My full story is on the loan listing, so please take a look.

[edited link out]

If you don't know about Prosper let me give you a quick primer and then I ask that you take a look at it, and try the site out by investing in my loan. I think Prosper will become a good way to diversify a persons portfolio.

From Prosper.com:

Prosper, America's first people-to-people lending marketplace, was created to make consumer lending more financially and socially rewarding for everyone.

The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper's online auction platform.

People who want to lend set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. People who lend can easily diversify using "standing orders", which automatically make many small loans to different borrowers.

You will find much more information on their website and I suggest you throughtly check out the site before deciding if it is something you woudl like to try out. Businessweek also had a decent article on Prosper if you are looking for something like that. After checking it out I ask that you help me out and help yourself out by putting a bid on my loan. At 7.75% interest you will make better than any Savings or CD, and at the same time will help me climb out of the credit card hole. Thanks for looking.

Ima saver · #2 (**permalink**) 03-05-2006, 12:56 PM

Sorry, but I don't know about this??

SpecialOne · #3 (**permalink**) 03-05-2006, 01:04 PM

You don't know about Prosper or you don't know about me paying the loan back.

If you don't know about Prosper, thats understandable it just launched a couple of weeks ago from the founder of E-Loans.com. I suggest checking out all the info the site has, as it is serious business.

If you don't know about me paying the loan back, well all I have is my credit rating listed there, which is a B not bad really, and my word. The beauty of Prosper is you can put little $50 bids all over to spread your risk around. AA A or B people are probably pretty solid bets as they don't plan on jepordizing their credit. C to E and NC HR are riskier of course but that is why they will have to ask for higher interest rates.

If you have any other quesitons for me, or just want to discuss Prosper in general do post.

Cheers!

34saving · #4 (**permalink**) 03-05-2006, 02:18 PM

SpecialOne -- You're violating the rules of savingadvice.com by linking to an advertisement for yourself. (You're also not allowed to post any links until you've made at least 10 posts.) However, I think Prosper.com is something our members might be really interested in so I left your original post. (I just deleted the link.) If somebody wants to help you out specifically, they'll have to look up your loan on their own. In the meantime you can feel free to continue the discussion of Prosper.com, just don't link to your own loan, okay?

Thanks.

twoanddone · #5 (**permalink**) 03-05-2006, 07:35 PM

I'm so lost .......... ??? Bid on a loan ? What/ ? ? Now, to reread and maybe it will all make since.

CJsoccerchic · #6 (**permalink**) 03-08-2006, 08:06 PM

LOST*******
So I can make 7.75 % INTEREST on my money...? for HOW long..?

34saving · #7 (**permalink**) 03-08-2006, 08:40 PM

Basically Prosper.com is trying to become the eBay of personal lending. People tell you their story, their credit rating, their debt/income ratio, the max. interest rate they're willing to pay, and how much money they need. Then people bid on how much money they're willing to loan them. Right now all of the loans are for a maximum of 3 years, but there are not any pre-payment penalities. None of the loans are secured by anything, but Prosper.com does promise to report good and bad info. to credit reporting agencies.

jodi · #8 (**permalink**) 03-09-2006, 09:37 AM

Sorry, this just sounds too risky for my hard-earned money. I haven't even looked at the sight, so maybe it's more legit than it sounds...but how do they verify that these people are who they say they are? What if someone uses a false identity to create an account and walks with your money? Then it won't matter if they are reported to the credit agencies. Again, I haven't looked into this at all, so maybe it's covered...but still not a risk I am willing to take.

Ima saver · #9 (**permalink**) 03-09-2006, 09:39 AM

I will have to agree with you jodi! I am not willing to take the risk either!

Lostsoul33 · #10 (**permalink**) 03-09-2006, 03:52 PM

I was thinking that too. I've been scammed on ebay and that was bad enough. It was just small amounts of money. However...maybe we really don't know enough about all of this.

Ima saver · #11 (**permalink**) 03-09-2006, 04:05 PM

When it sounds too good to be true, it usually is. (not true)

34saving · #12 (**permalink**) 03-09-2006, 08:36 PM

I've poked around the site quite a bit and it's definitely in the beginning stages. ( I'm not jumping into the loan program.) However, think about all of the money that banks (and credit card companies) are taking in from people vs. what banks pay us savers. There's definitely room there for "the litte guy" to save money as a borrower AS WELL AS make money as a lender. It will be interesting to see how the credibility issues shake out . . . For now Proper is relying on groups that don't mean much yet and diversification. (IE, if you have $1000 to lend, you lend $100 each to 10 different people so if one defaults you're not totally out of luck.)

Tree0164 · #13 (**permalink**) 03-10-2006, 04:49 AM

I think I will take a pass. Most of the borrowers are probably going to be ones that are maxed out on their credit cards, can't get a loan at their bank. They will probably have bad credit. I am not willing to risk that. I wouldn't put in any money that I wouldn't mind losing in.

JBinKC · #14 (**permalink**) 03-10-2006, 10:22 PM

I think this idea will definitely fail. You have to be pretty gullible to loan a stranger money without having it collateralized and not having verified their personal information containing their social security number and who in their right mind would give that information to the person originating the loan. I think if they default you should have every right to collect the amount due and the opportunites to 1099 them for a bad debt and report them to the credit agencies.

34saving · #15 (**permalink**) 03-11-2006, 12:24 PM

Actually, Prosper has accounted for (or at least tried to account for) all of that stuff. There's a lot of money in this start up . . . of course it still might fail . . .The guy behind it is the same guy who founded eloan.com.

JBinKC · #16 (**permalink**) 03-11-2006, 01:09 PM

34-

So what you are saying is prosper.com holds a verifiable title to assets they pledge for the loan. I am curious what the percentage of assets they have to pledge. The way I see it is I might as well open a pawn shop where I can offer 5 cents on the dollar for a pledged asset and I can charge the maximum percentage allowed by law for interest for them to get it back.

BTC · #17 (**permalink**) 03-11-2006, 01:35 PM

Just curious, but what are the incentives for someone to pay higher interest rates to strangers when lower rates are available via more traditional routes? Seems like your customer base would more than likely be people who aren't able to secure traditional funding. If that's the case, I wouldn't be willing to let them borrow from me.

34saving · #18 (**permalink**) 03-11-2006, 02:04 PM

JBinKC - No. Prosper is very clear about these being unsecured loans. Sorry if my comments were misleading about that. They do report to credit agencies, deal with trying to recoup defaults, etc.

BTC - Let's say someone had a HELOC on his house (an 80-10-10 loan) or a HELOC for some other reason. Right now, even with his "AA" credit his bank would be charging 7.5% and that rate will probably climb a bit more before the fed. stops the interest rate hikes. Looking at Prosper's loans right now, he could trade that 7.5% variable debt to 6.5% fixed debt and have a loan that is NOT secured by his house. Not a bad deal. In the meantime, the people who offer him the money will still be making more than what they're earning on their savings accounts. Are there risks? Absolutely. However, looking at the Prosper site, it looks like at least some people are willing to take these risks. Am I one of them? Not for the forseeable future. Is it worth watching a bit? Yep, especially since I have some money in a small cap financials mutual fund . . .