# So, what do you think of prosper.com? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 8, 2006, 3:04pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896 "2006-06-08T15:04:14Z")\ **Posts on this page:** 9\ **Page:** 3
**Author:** ![Least\_Original\_User\_Name\_Ever](https://avatars.discourse-cdn.com/v4/letter/l/e480ec/32.png) [@Least\_Original\_User\_Name\_Ever](https://boards.straightdope.com/u/Least_Original_User_Name_Ever)\ **Post date:** [March 17, 2008, 8:26pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/41 "2008-03-17T20:26:05Z")
[QUOTE=Maeglin] I understand that completely. My sense was that since typical credit markets are contracting, savvy people would drift to Prosper to satisfy some of their credit needs. The idea of a serious debt business would be incredible. But the amount of due diligence I would really need would be high, perhaps too high to justify the relatively small capital I would be willing to risk. If they can make the economics work, I would be all for it. Well, except perhaps revolving products. I work in finance for a credit card company, and we have enough competition already. 😉 These topics come up from time to time now at the SDMB. I know this is not exactly the first place to turn to for investment strategies, but it might be fun (and profitable) to have a little SDMB money roundtable. It would be a little more personal than FatWallet, Motley Fool, or Yahoo Finance. [/QUOTE] I’m down for this. New forum? ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [March 17, 2008, 9:04pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/42 "2008-03-17T21:04:08Z")
[QUOTE=Tastes of Chocolate] Does anyone really see this growing into someplace that will see much high quality debt? I thought the borrowers were most coming to [Prosper.com](http://Prosper.com) as lenders of last resort. If the borrowers have a good enough credit history to be considered high quality, then they would be going to a more traditional lender, like a bank. [/QUOTE] That’s the Catch-22. If you have good credit, you probably have assets, which means you can probably get a secured loan from a bank at a lower rate than you could get on Prosper. If Prosper were to start offering secured loans, then they could start being competitive in the debt market. But handling collateral adds a huge amount of overhead to the origination process, and may not be worth it unless they rethink the fee structure. ---
**Author:** ![whatami](https://avatars.discourse-cdn.com/v4/letter/w/85f322/32.png) [@whatami](https://boards.straightdope.com/u/whatami)\ **Post date:** [March 18, 2008, 3:32am UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/43 "2008-03-18T03:32:09Z")
I’m a borrower on Prosper. If anyone is considering lending, I recommend you check out [www.prospers.org](http://www.prospers.org) These forums/blogs/etc. was set up some time ago. Almost a year ago, the Prosper run forums began to heavily moderate their forums. They would delete postings, portions of postings, and especially threads which were critical of Prosper. The .org group has some noise for sure, but it also has some large, smart lenders who can really crunch some numbers. Just my two cents. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [March 18, 2008, 4:45am UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/44 "2008-03-18T04:45:30Z")
[QUOTE=friedo] Well, I currently have a Citibank e-savings account which pays in the neighborhood of five and an eighth. Considering the risk of default with Prosper loans, even a conservative estimated ROI can’t be relied upon. [/QUOTE] Are you sure about that Citibank interest rate? Because I just checked the website and the e-Savings Account is paying 2.25%, while the Ultimate Money Account is paying 3.25%. And even those rates won’t last, if the federal funds rate goes down again, as some economists expect. ---
**Author:** ![tirial](https://avatars.discourse-cdn.com/v4/letter/t/ac91a4/32.png) [@tirial](https://boards.straightdope.com/u/tirial)\ **Post date:** [March 18, 2008, 9:29am UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/45 "2008-03-18T09:29:19Z")
If you are looking at a slightly different model of lending there’s also [zopa](https://us.zopa.com/), which has just opened in the US, but has been going in the UK for a while. Zopa definitely seems to have seen a rise in lending over the last few months. ---
**Author:** ![Trunk](https://avatars.discourse-cdn.com/v4/letter/t/87869e/32.png) [@Trunk](https://boards.straightdope.com/u/Trunk)\ **Post date:** [March 18, 2008, 12:05pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/46 "2008-03-18T12:05:11Z")
[QUOTE=Tastes of Chocolate] Does anyone really see this growing into someplace that will see much high quality debt? [/QUOTE] No. But it doesn’t have to if the interest rates are high enough. > [@](#): > > I thought the borrowers were most coming to [Prosper.com](http://Prosper.com) as lenders of last resort. If the borrowers have a good enough credit history to be considered high quality, then they would be going to a more traditional lender, like a bank. I wouldn’t say, “coming as a last resort”. The big difference with prosper is that the loans are basically unsecured loans. People need them to pay off credit cards, get home-improvements, start businesses, etc. If the loan fails, there’s nothing to repo or foreclose on. But, as a lender, you should expect to be paid for the risk you’re taking. I think that people aren’t being sufficiently rewarded for their lending. If I did, I’d have more there. But, time will tell. . .if word gets out that prosper is a crappy place to lend, then rates should start going up again. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [March 18, 2008, 1:05pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/47 "2008-03-18T13:05:16Z")
[QUOTE=Dewey Finn] Are you sure about that Citibank interest rate? Because I just checked the website and the e-Savings Account is paying 2.25%, while the Ultimate Money Account is paying 3.25%. And even those rates won’t last, if the federal funds rate goes down again, as some economists expect. [/QUOTE] I was able to lock in a rate some months ago during a special promotion. I think it lasts until April, at which point they switch it to whatever the current rate is. ---
**Author:** ![Maeglin](https://avatars.discourse-cdn.com/v4/letter/m/8baadc/32.png) [@Maeglin](https://boards.straightdope.com/u/Maeglin)\ **Post date:** [March 18, 2008, 3:09pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/48 "2008-03-18T15:09:10Z")
I started a thread for a more general investment discussion [here](http://boards.straightdope.com/sdmb/showthread.php?p=9587703#post9587703) . I don’t want to hijack this thread, but please feel free to check the new thread out and post if you are interested. ---
**Author:** ![Chessic\_Sense](https://avatars.discourse-cdn.com/v4/letter/c/7c8e57/32.png) [@Chessic\_Sense](https://boards.straightdope.com/u/Chessic_Sense)\ **Post date:** [March 24, 2008, 7:42pm UTC](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896/49 "2008-03-24T19:42:17Z")
I’ve just signed up for [LendingClub.com](http://LendingClub.com). The main difference that I see is that on LendingClub, there is no bidding. The rate is set by the site and you either get in it or you don’t. That eliminates the work of looking for loans only to be outbid. My personal strategy will be to spread about $15,000 over SEVERAL loans (like 30) that are looking to pay down credit card debt. I figure that if you’re starting a business and I fund you, I have to rely on your business making the money to pay me back. If you’re already in debt, however, you’re already paying it down, so I know the money’s there. So the plan is to look for people with great credit (680+) that have no delinquencies in the past 2 years (which tells me they’re paying their credit bill now) and refinance it for them. I think these people have been unfairly classified as risky because of their debt-to-income ratio and I plan to capitalize on the site’s misjudgment. Thoughts? [Previous page](https://boards.straightdope.com/t/so-what-do-you-think-of-prosper-com/359896.md?page=2)