Better Than A Payday Loan - place to get a personal loan
63Update!
September 9, 2011
Prosper doesn't run auctions for new loans as of last December.
Prosper is available to some people. I had to pull my money because the State of Texas doesn't allow Prosper to operate within Texas. Also, Virgin Money has pulled out of the United States. I believe social lending is a good idea, however, the timing was terrible to start lending money.
Now state and federal agencies are limiting access to lenders.
About Prosper Unsecured Loans
One of the quickest ways to obtain a personal loan is through Prosper. Prosper is a place where folks may lend money to strangers.
A borrower signs up at Prosper.com, follows the instructions and submits a request and the lenders review the information. Note: The minimum FICO score needed to join as a borrower is 640.
At one time Prosper was an auction style social lending site but investors and borrowers preferred a fixed price process to save time plus the process is easier. That said investors can sell loans to other investors by auction.
Watch for more information on personal loans and social networks....
My Personal Experience
My experience as a lender with Prosper was positive. I use to lend to families and individuals with AA to B credit rating that are eliminating their high (+20%) credit card debt. The largest exposure - $100 on an individual loan (not much). I didn't concentrate the money on one loan. Average interest rate received: 12.5% - This changes constantly as people refinance or payoff their 3 year loan.
I avoided loans from people who live in areas with high foreclosure or weakness with employment. Example: Certain areas in California, the Phoenix Arizona metro, Detroit Michigan, and pockets of Florida. (Auto industry and real estate bubble)
Note: One person filed for bankruptcy... he worked in the automotive industry (an early loan) plus had AA credit. Didn't lose too much - 50 dollars.
Other Social Lending Sites
Update! Closed: Virgin Money... owned by billionaire Richard Branson, this website concentrated on loans from friends and family. No Prosper type bidding. Had a feature: Student payback program; extensive help to repay federal and private student loans.
Lending Club... each borrower is given lending club interest grade ranging from A1-7.37% (best) to G5-20.11% (worst). Also, there is a borrowing processing fee based on your LC grade.
Pertuity Direct... the short and sweet; borrowers submit their application to Pertuity. Pertuity Direct decides to accept (or reject) application, plus they calculate the interest rate. The loans are pooled into a SEC regulated mutual fund. Works like a bond fund.
Where Credit Still Flows
- Social Lender Prosper.com Drops Auction Model - Security - Privacy - Informationweek
Prosper.com says it will no longer allow lender bidding to set interest rates on new loans. - Peer-to-Peer Lending: Problems and Promise
(source: businessweek) Just when it might have proved most useful, peer-to-peer lending has been severely hamstrung by the U.S. Securities & Exchange Commission's efforts to get a regulatory handle on the fledgling industry... - Where Credit Still Flows - Forbes.com
Social-lending sites pair willing lenders with cash-strapped borrowers. Here's how.
CommentsLoading...
Research Analyst... here's some more information about Prosper and the filing with securities authority.
More information: The Forbes article about Prosper, the SEC, and its "quite period"... plus detailed information on other social lending groups
James-
Thanks for your comments. It depends at what point the borrower defaulted in the loan process. One early default hurts. That said I didn't have much money invested.
I bet you there's many bankers wishing they had broken even. Anyway, my state now doesn't allow individual investments in Prosper.
Research Analyst 3 years ago
Great, Thanks!