Prosper Update

I was really getting into prosper, as I had almost the amount needed for it to become self sustaining.  Then it went and filed for the ability to list some loans on a secondary market and wouldn't take any more applicants on until they hear back from the application board.  At any rate, I had 21 loans at prosper when it went on hiatus.


With the economy the way it is, I of course expected the possibility of loans defaulting.  I have been prepared for that and can handle one or two failing before my returns become negative to date.  Of my 21 active loans, 1 is late and 1 is 2 months late.  The thing I'd like to point out is that of all my loans, these two have the best 'credentials' of funding.  I believe, however, I got caught up in the qualitative analysis and ignored the fact that they were borrowing a lot for their age/situation.  My loss.  

My average interest rate is still about 13% and, again, while I'm still profitable and the income stream is nice (about 40 bucks a month), the real returns and gains come from the reinvestment I cannot do due to Prosper being closed.  

On a side note, I finally figured out an 'ok' way to record my prosper lending activity into Quicken - all you have to do is set it up as a security which you buy and sell, always at a dollar a share, and receive dividends from.  

3 Comments

You could also set it up as a savings or annuity that pays interest out monthly. Or a reverse loan, where you get interest and principal monthly.

Good luck with those late loans. Have you tried any other sites? I had used Lending Club before, but now my state is not available there.

Thank you for your comment.

Both good ideas. When I first looked at it, I was going to look at each loan separately but that's overkill.

I have not tried the others yet - I liked the reviews and feel of Prosper the best, and got into it with the goal that once I put the amount in around 1800 or so that each month my payments generate enough to get another loan, I could let it continue on it's own. Going to another would cause me to have more cash outlay that I want to at this point as I'm saving for a down payment. Did you enjoy Lending Club compared to Prosper?

I am using both. Went to LC after Prosper started the above mentioned process. There are significant differences. LC only allows prime borrowers and sets a static rate for the loans so borrowers with similar criteria will borrow at the same rate. Due to this borrowers do not provide as much commentary. LC has a much lower default rate due to focusing on lower risk borrowers. It also allows you to invest $25 instead of Prosper's $50 minimum. On 19 prosper loans, I am receiving a return of 19% and 23 LC loans, I am a bit over 13%. I would say they are close to equivalent -- lower risk lower return. I am only a lender in both and have no additional vested interest in them.

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