I live in Texas too, and thus I am no longer eligible to lend on Prosper. However, back in 2008 I was able to do so. I lent a total of around $1000. My estimated ROI is 8.6% at the moment. I have had 2 out of 10 loans default, but luckily both of those were minimum bids ($50.) One of my loans is $500 and is doing well. This loan was to a member of an online community that is pretty close knit. Another one of my loans for $100 at 20% was paid off early, got $122 from that.
I think the best way to use Prosper is to lend to people you know or people you are connected to in some way.
I've recently started lending on Lending Club since they allow lenders from Texas (but I think we can't trade notes after the fact or something like that.)
Dan
· 4 weeks ago
I began lending on Prosper back in May 2006. Prosper is worse now than it was originally. I stand to lose about $200 of my original $3000 investment. My last notes come due in July 2010.
Prosper's management sucks. They change the lender agreements all the time and make them retroactive. In the current incarnation of Prosper, Prosper itself owns the notes, so if Prosper liquidates, the lenders become unsecured creditors. This is different from the old days, where Prosper lenders held the rights of the notes. Prosper liquidating is just one more risk factor that has to be priced into the loans.
I'd think twice before getting the sign-up bonus from Prosper if it requires you to actually make loans to get it.
Flexo
· 4 weeks ago
Dan, thanks for sharing your experience. It's interesting that lenders would become unsecured creditors in that situation.
Scott
· 4 weeks ago
I agree with Dan.
I started lending with Prosper in March of 2006, eventually investing about $4700. Over the last few years, they've made numerous retroactive changes to the lender agreement. There was never any way of opting out, and your money was locked in.
Also, when those of us who had been around the longest pointed these things out, they would attempt to cover up their actions. At one point they actually shut down their forums and made new ones, wiping out all of the old complaints and warnings. They also threatened legal actions against an outside site hosting forums where lenders could discuss Prosper.
Before anyone considers lending on Prosper, I'd recommend he do his homework. Caveat emptor. I've withdrawn all of my money, and I never plan to do business with PMI (Prosper Marketplace, Inc.) again.
Evan
· 4 weeks ago
I Love prosper.com - it gives me a chance to be the lender and to diverisfy my portfolio as I see fit. Currently have about 30 active notes ranging in amounts of $25 to $50 - I have only had 3 defaults and that was before I started using my current lending requirements (I have a bunch of closed notes already).
Dan
· 3 weeks ago
Everybody loved Bernie Madoff until the stock market tanked.
Eric
· 4 weeks ago
Wow some eye-opening comments here (especially since these were the early investors in Prosper).
I just hope Lending Club doesn't take the same route!
Linea
· 4 weeks ago
I would not say no to $50, but as an early lender, I advice to proceed with care on this site. At least I'm not losing money (I'm at 1-2% returns), but I hear a bunch of people are. Whereas on LendingClub, I'm at a nice 8% without taking much risk (going only for A and B loans). LendingClub seems to have a robust collections team and higher standards for borrowers, do they have a sign up bonus too for new folks? I got $25 from them to try it
Dan
· 3 weeks ago
That's correct, Linea. The median return for seasoned lenders is something like -1%.
mp
· 4 weeks ago
i've been using prosper for a year or so and have had no issues, i've had a couple defaults but am still making money on it. i just keep re-investing my money (not adding more) and now have close to 50 loans.
All Comments
I think the best way to use Prosper is to lend to people you know or people you are connected to in some way.
I've recently started lending on Lending Club since they allow lenders from Texas (but I think we can't trade notes after the fact or something like that.)
Prosper's management sucks. They change the lender agreements all the time and make them retroactive. In the current incarnation of Prosper, Prosper itself owns the notes, so if Prosper liquidates, the lenders become unsecured creditors. This is different from the old days, where Prosper lenders held the rights of the notes. Prosper liquidating is just one more risk factor that has to be priced into the loans.
I'd think twice before getting the sign-up bonus from Prosper if it requires you to actually make loans to get it.
I started lending with Prosper in March of 2006, eventually investing about $4700. Over the last few years, they've made numerous retroactive changes to the lender agreement. There was never any way of opting out, and your money was locked in.
Also, when those of us who had been around the longest pointed these things out, they would attempt to cover up their actions. At one point they actually shut down their forums and made new ones, wiping out all of the old complaints and warnings. They also threatened legal actions against an outside site hosting forums where lenders could discuss Prosper.
Before anyone considers lending on Prosper, I'd recommend he do his homework. Caveat emptor. I've withdrawn all of my money, and I never plan to do business with PMI (Prosper Marketplace, Inc.) again.
I just hope Lending Club doesn't take the same route!