Prosper.com not available in New Jersey

[disneysteve]

I just tried to sign up with Prosper.com. I read yet another article about them in Money magazine and how they now have set portfolios that you can invest in that are paying about 7% for the lowest risk portfolio. I went through the whole sign up screen and got an error message that the service isn't open to lenders in NJ. That's lousy.

[LuxLiving]

Decided to investigate a little further - they aren't available in my state right now either:

Prosper Blog | July 14th, 2009 at 11:31 am stated:

"Prosper must complete a different regulatory process for each state. We are diligently working through the process and we will alert lenders once lending is open in their state of residency."

Other states? Click on item number 2 --
Investing Help - Prosper

[Slug]

Yes, I'm in NC in the same situation except I was a lender for a couple of years so I have lots of loan payments coming back into my account that I can't put into new loans (I was treating it as a fun version of a 3 year CD ladder). So now I painstakingly transfer each payment back to my interest-bearing account.

On another note, I don't think I'd ever let Prosper direct my portfolio. They have been WRONG WRONG WRONG about risk estimates and projected returns since their inception. You're almost better completely non-diversified by targeting loans with a good rate that are complete no-brainers and thus very low risk. Make your search criteria so brutal that even you wouldn't qualify for a loan for yourself and then invest in the best of those loans aggressively. That's my plan if they ever get approved in NC. Until then, it's horrible 6mth CD's at ING.

[poundwise]

I'm not sure about participation in NJ specifically, however, you may want to check out Lending Club.

[disneysteve]

I'm not sure about participation in NJ specifically, however, you may want to check out Lending Club.

Thank you!! The Money article mentioned them also but I went to Prosper and never checked LendingClub. They are active in NJ. I just set up my account and transferred in $1,000 and will start lending. I'll post reports periodically to let people know my experience.

[EconoMutt]

I plan to use prosper.com to buy some computer equipment for my business this spring.

[disneysteve]

Never mind. I went through the whole sign-up process at LendingClub, funded my account and only after picking some loans to fund discovered that they are not, in fact, open to NJ residents. I wish they would have told me that BEFORE I did everything.

[Slug]

Geez. 0 for 2. And lots of BS signups and a $1000 transfer. Transparency would have been nice. If I see Prosper open up to NJ lenders, I'll let you know.

[disneysteve]

Geez. 0 for 2. And lots of BS signups and a $1000 transfer.

Yep. I wouldn't have minded too much if not for the transfer. Now I have to get my money back, which probably won't be a big deal, just a hassle.

[disneysteve]

I got my money refunded into my Paypal account today so they were quick about that.

I'll check in periodically to see if they open it up to NJ as I would like to do this.

[nmboone]

Prosper seems like a cool thing to do if you want to invest in a different way. I would be interested if I knew more about it. But did anyone notice that some of the loans are for stupid things? Like paying off thousands in payday loans because of helping family out, and borrowing $1500 for Xmas presents for their children? Hello? Did they not get the memo about never borrowing money for christmas? What a stupid idea! I would NOT lend to them.

Edit: Also that particular christmas loan is a payback of $60 for 3 years! Insane!

[disneysteve]

Prosper seems like a cool thing to do if you want to invest in a different way. I would be interested if I knew more about it. But did anyone notice that some of the loans are for stupid things? Like paying off thousands in payday loans because of helping family out, and borrowing $1500 for Xmas presents for their children? Hello? Did they not get the memo about never borrowing money for christmas? What a stupid idea! I would NOT lend to them.

Edit: Also that particular christmas loan is a payback of $60 for 3 years! Insane!

I agree, but the good thing about Prosper and LendingClub is that you get to see those things before deciding who to lend to. Before I discovered I was ineligible at LendingClub, I was reading through the loans and picking the ones I was going to fund. I skipped the guy who wanted to buy a new motorcycle and focused on the folks who were looking to pay down high interest debt by borrowing at a lower rate. What I found a little surprising was how many borrowers have top-notch credit scores and 6-figure incomes.

[tmsmt]

I started doing Prosper in December. I signed up for the portfolio plans so I didn't pick the loans myself but rather let the system do it for me. It was still fun to read the information, and I agree some of the loans were for things I certainly wouldn't borrow money for. Yesterday, I logged into my account and it said Prosper is not available in Montana, my plans have been paused, and I can withdraw my money as payments are received. I didn't get anything from them in advance telling me why Montana is no longer available. I did e-mail them to ask what happened. I'm hoping it is a mistake - or just a temporary problem that will be fixed - because I've been enjoying doing this. Just an FYI for others - they may want to verify if their plans are still active!

UPDATE: I just got an e-mail back from Prosper saying they expect to be back on-line in Montana within the next couple of weeks. They didn't explain what the problem was.

[Slug]

tmsmt,

While you are waiting, head over to Prospers.org and do some reading. Lots of long time Prosper users over there can inform on the true risk levels that you may experience in different scenarios.

[tmsmt]

Thanks for the link. I've browsed a bit and it looks interesting.