About six months ago, there was a thread about Prosper.com in which a number of people expressed their interest in giving it a try as lenders.
Have any of you done so? How has it been working out? Have defaults been a big problem? Anything else?
I wanted to get into it, but their rules say only people living in the US. Normally, I’d get around this by using my parents’ address, but they ask for copies of two utility bills in my name. Is there legal reason that lenders have to be in the US, or is it just a policy of Prosper? Are there any similar lending services that are more welcoming?
I am both a borrower and lender, and my experience is…mixed. Customer service is poor, lates (which will probably turn into defaults) are higher than anticipated, and collections are ineffective. But overall it’s fascinating. Just not sure yet if it’s profitable.
The Prosper concept is somewhat derived from UK-based Zopa.com. Their model is a bit different, though–I think if you search the Prosper forums there are threads that detail those. Dunno how Zopa is with international lenders.
Eric’s Credit Community is a great site that pulls publicly available data from Prosper and creates summaries and stats. For example, you can view any lender’s portfolio, including mine.
Interesting, thanks for your reply. I remember checking out Zopa back when I first looked into Prosper, but I’d forgotten about it. If I remember correctly, they had similar restrictions on international lending.
Since starting about seven months ago, I have about $8,000 in 66 loans. Most of my bids are the $50 minimum but a few are as high as $300. Two of my loans are more than three months late and show no hope of paying; they will probably be sold to debt buyers at the next auction.
Two currently show less than 15 days late, but they’ve both corrected themselves from that status before, so I’m not too worried about them. According to Eric’s, I’m looking at a risk-adjusted ROI of 11.5%. We’ll see. Prosper is firmly in the you are a moron and you will never see any of this money again category of my portfolio.
Now, pardon me while I go look at my index funds and home equity to keep from fainting.