Prosper.com creates person-to-person loan site, but can it work?

Prosper.comI received a pleasant email message from one of the marketing people at Prosper.com and was rather startled when I checked out the site and found out that what they’ve created is a marketplace for people seeking loans, and other people seeking unusual investments.
It’s hard to imagine how this isn’t some huge scam magnet and I even wonder about the legal implications, tax consequences and, yes, even whether Homeland Security would have concerns. So I asked them some questions, and Prosper’s Chief Technology Officer John Witchel was kind enough to answer them…
Q: How did you come up with the idea behind Prosper.com?
The original idea behind Prosper was from our CEO, Chris Larsen. He had founded E-LOAN so he knew quite a bit about credit. And like all ideas he started with the most basic question: “Why?” Why is credit so
expensive? Why is it so inflexible? Why is it so hard? And it just went from there.


Q: Can you step us through exactly how someone would apply to have you advertise a loan they sought, what interest rate they’d offer, how they’d get financed, and how they’d pay back the individual investors?
There are three pretty good “How it works” pages that have some nice pictures (so I won’t paste them in here, but here are the links: How It Works, About Borrowing, and About Lending)
And our FAQ gets into the details too: Get Started FAQ
Q: Person-to-person lending online? I’d be paranoid about scams and rip-offs. Tell us how you sidestep that issue?
Hmm. Well Borrowers get the money, so I assume you’re thinking about it from the lender’s point-of-view.
Here are the excerpts from the FAQ that describe identity verification and diversification (which are the two main mechanisms to deal with the issues I think you’re getting at (let me know if I missed it)):
For the safety and security of the marketplace, it is important that Prosper guarantee that all individuals participating in the marketplace are 1) a real person, and 2) the same person they say they are. To this end, Prosper takes extra care in verifying the identity of all borrowers, lenders, and group leaders.
When you start any process on Prosper that involves the exchange of money, your identity will be verified against data from credit reporting agencies and other identity and anti-fraud verification databases. You will be required to provide your name, date of birth, Social Security number, address and telephone number. Based upon this and other data, Prosper will verify your identity.
The level of confidence we need to assign you to different roles may vary by role. Therefore, you may be required to prove your identity for each new role you request.
There are no guarantees that your loan will be repaid. We try to give lenders as much information as possible about the credit worthiness (or “credit grade”) of the borrowers on the site, their debt burden (known as the “debt to income ratio”), and the expected default rate of a borrower with their credit grade, which is based on historical data from Experian, one of the three major credit reporting agencies.
The way to ensure a good return on your investment is to diversify your lending-create a standing order to place bids on many listings, and spread your risk across many borrowers. If you make 100 loans to B-rated borrowers at 8%, and B-rated borrowers have an expected default rate of 1.8%, then you might have 2 borrowers default, which would lower your return by 2%. After annual lending fees of 0.5%, this would give you an annual 5.5% return overall. Learn about diversifying your lending with standing orders.
Q: How should people that lend spread their risk?
Because Prosper allows lenders to bid small amounts on all or part of loans, it is easy for lenders to create well-diversified portfolios. Using Prosper’s standing order feature, lenders can efficiently diversify their portfolio by automatically funding listings that reflect their pre-defined criteria.
For example, a lender can bid as little as $50 on any loan listing. To diversify their portfolio, a lender might want to spread an overall investment amount of $10,000 among several loans. Learn about diversifying your lending with standing orders.
Q: What happens if a borrower does not repay their loan?
Borrowers who miss payments on Prosper face the same consequences as they would if they miss a payment with any form of bank credit including the reporting of late payments to the credit bureaus. Borrowers also incur late fees, which are collected by Prosper and passed onto the people that loaned the money.
When a borrower’s payment is late, Prosper communicates directly with the borrower to encourage repayment. After 15 days, Prosper notifies the group leader of the late payment and that the group’s reputation is at risk. After 30 days, Prosper engages a nationally-licensed collection agency, giving borrowers 90 days to bring the account to current. At 120 days past due, the loans are sold to a debt buyer. At that point, the borrower’s credit report is negatively impacted with a default, they are banned from the platform, and the group’s reputation is negatively affected. Learn about what happens to borrowers who are late with payments.
Q: How about a few success stories of people who have raised enough for a meaningful change in their lives? How many loans have you made at this point, and how many have been paid back?
We’re not disclosing hard numbers yet, but we’re off to a great start. If you browse the site (start here) you’ll get a good sense of who’s using the site for what purposes. If you see a little green check box near the listing that means they’re “in the money” (i.e. they have enough money to create a loan.)
Q: Speaking of financials, how does Prosper get paid for these transactions?
Here is our fee schedule: Prosper fee schedule.
If you’re making loans or acting as the middleman, aren’t there federal laws and restraints on this sort of activity? If nothing else, surely there are issues of money laundering and other Homeland Security issues?
Yes, there are many compliance issues. We believe we have built a model that will satisfy all the state and federal agencies that have jurisdiction over our business.
Q: You have “credit grades” that in essence are assigned risk values for a given loan. How do you calculate those?
Here’s our blurb on that: calculating borrower credit grades.
Do people seeking loans have to put up some tangible property, to “secure” their loans, before they can proceed? No. All loans are unsecured.
Q: This seems like an interesting vehicle for charities to raise money: do you work with non-profits who might not plan on paying back loans? Or those that might offer a loan but want a zero-percent interest rate?
It’s possible.
Q: A quick scan of the featured loans suggests that the average is about $5000 at 10% interest. Is that about right? How does that compare to a typical bank or financial institution loan?
Sorry, I can’t give you answers on what’s average or competitive. You’ll have to draw your own conclusions. But we’re working to make that information more visible on the site.
Q: Finally, what about the tax implications. Does prosper report all transactions to the Internal Revenue Service and U.S. Treasury Department?
Yes.
Q: Thanks for your candor. Any last thoughts on p2p loans and the future of financial transactions in the online world?
Nope. We have high hopes for our site, but it really depends on people like you who ask hard questions. We try to be forthright in what we’re doing.
Thanks for your direct answers and information, John. I’m not sure I’m ready to utilize your system for my next loan, but it’s darn interesting!

62 comments on “Prosper.com creates person-to-person loan site, but can it work?

  1. Really interesting…. It seems like a good way to let people spread money around more….
    I found your blog by googling something about Boulder…. I added it to my feed ­čÖé

  2. I registered on Prosper.com and I was seeking a $25,000 loan. They said I have a credit grade of E for a $281.00 hospital bill that wasn’t paid and a student loan that went into default that I didn’t know anything about. I only received 2 bids totaling $150.00. I was very dissappointed. I still would like to start my business.

  3. I believe Prosper.com is one big scam in itself. I put a listing on. I have excellent credit….AA tier…not much debt and a very good income….withing 2 days of posting my listing I received enough bids to fund the loan…prosper then asked for some documents to verify my identity, which I gladly supplied…I waited for 2 days for a decision…when I didn’t receive one I called customer support…all they could tell me was to wait for a phone call….to make a long story short….when you call prosper, you can only speak to customer support and nobody else (you have to wait for them to call you) and oddly enough, everytime you call customer support, you get the same person, which I found very unusal. Have you ever called customer support for a large company and gotten the same operator? Probably close to never….I got the same person 4 times in a row….when I confronted this operator about this and asked if he was the only person that worked there he didn’t have much to say….I asked to speak to someone higher up…after placing me on hold 3 times, he told me I could speak to someone in the main office but they would have to call me, I couldn’t call them. (shady)…Not even 2 hours after that phone call I received an email from Prosper stating that my listing was cancelled cause they could verify my identity…I say bull….Now I have to wonder about the validity of this company and if I have to be worried about identity theft….they have all my information…from ss# to bank account #….I wouldn’t worry about the people looking to borrow money to be running a scam….I’d be more worried Prosper is running a scam

  4. It’s pretty easy to get credit cards with no or low interest rates, at least for 6 months to a year. I help people do that so I know it’s real. I’m not sure how real prosper.com is or how well it works, but I must say I love the idea.
    I’ve been providing P2P loans for a few years now. I stick with Family, Friends and People in our Church. Most people say never to lend money to Friends and Family but I’d rather lend to them than someone I don’t know. In better days people actually cared about their word, committment, integrity, honesty and so on. Now it’s even harder because people can hide behind the internet screen. Again, Love the idea, but deffinately skeptical of the possibility.

  5. Dave,
    Thanks – this is great!
    At first, I thought this might be a good way for some of the SMBs that I deal with to gain capital, but now that I have read your analysis (some of the answers from Chief Technology Officer John Witche seemed evasive and incomplete) I will wait and see and do some further checking.
    Once again, you do good work.

  6. I think Prosper is awesome for people like myself . I have a bankruptcy due to divorce and my ex not paying on the house that was awarded to her. I used to have credit near 800. After I filed for bankruptcy I could even borrow a glass of water but due to Prosper and its lenders in less than 6 months I was funded two loans the first which I was fortunate to pay off early for surgery and the second for a vehicle for a total of $5500. They are awesome ! I get to borrow and investors with big hearts and big wallets get to make some good money all this for believing in second chances !try doing this with those rip-off credit cards companies !

  7. I have been trying to sign up at Prosper as a lender, saw it on a tv news article and thought it was great, well guess what! they seem to try and mine alot of financial info from you, and still don’t answer emails or return their telephone voice mail, it seems there is no way to actually contact a real person, I am becomming very skeptical of this outfit!

  8. As the tenth highest lender on Prosper, rest assured its not even as good as it appears or Prosper spins it. I have several borrowers that are first payment defaults, in other words they got the money and NEVER MADE ONE PAYMENT, The Defaults far outweigh the interest on over 170k in loans – thus, its a great way to lose your money bc Prosper has never bought one of them back, although they claim they do. Additionally, Prosper claims no responsiblity for them even though they promote they will buy back loans. I sent emails regarding this, and was told at one point that “upper management is looking at this” and never heard from them again.
    Its one big marketing machine. Hell, I wasnt even invited to the prosper days event, it was sold out. Thus, this company is not that smart, as anyone knows in marketing 101 that you definately VIP the sources of all your money, and being in the top 10, those of us are a good chunk of it.
    The other problem in the msg boards where Prosper allows people to slander the hell out of people, which is just unbelievable.
    E Loan, lost alot of money, by locking loans, and the same founder started this company. This time he is helping others lose their money, and doing nothing that I have seen about fraudulent loans, defaulted loans, first payment defaults other that leaving the lenders holding the bag.
    Its a poor deal, and I have stop lending and started pulling my money out.

  9. I have been lending on Prosper for over a year and currently have made about 8% after defaults, not bad not great. The main things are invest small, invest what you can afford to lose. Don’t chase the high interest loans, 70% of the loans listed are junk, you do have to pick the good loans out of the pile. I have also found that your better off lending in the small 5 star groups who have been around for a long time. And have a common theme of affinity. I run http://maclenders.com a group leader who is selective of the borrowers in the group will help lenders reduce defaults.

  10. I did a piece on Prosper.com on my blog a couple weeks ago when I set up my account (www.everydayfinance.blogspot.com). I’ve been pleasantly surpsised by the bids I’ve won; my average loan rate is around 12% right now. Even if I lose one, I’ll still come in around 8 or 9%. It’s a real nice diversification tool which is less prone to fluctiation from general market events and doesn’t necessarily move in lockstep with the major market indices (kind of like spreading out into commodities or real estate a bit too). I’d recommend researching it and starting off with a couple thousand bucks for anyone looking for a little diversification. Based on the default rates and data provided (which I believe is very legitimate), it’s virtually impossible to actually lose money if you start with A and AA loans. The biggest risk I see is that you might have earned a better risk-adjusted return elsewhere if you have a few defaults. My article has a few links to strategy sites, which helped me formulate my lending strategy. I will be updating again shortly with my personal experience and tips/pitfalls.
    Dave,
    The site’s great by the way. I’ll be sure to visit again soon.
    Dan

  11. Stay away from prosper like its the plague. All hype, by the marketing people, defualts occur in all credit score levels. Their are a lot people who borrow, with the intention of never paying back, you dont even get a months’s payment. Customer service is so bad, when you email them with a problem you get a generic email, and when you request follow up on your account, your sent another generic email. It is a scam, they are hurting their customers.

  12. Lending money on this site makes little sense. All loans are paid back over three years, so let’s say you average 10% on all your loans, that’s only about 3% per year returns, lower than many savings accounts. What’s the point of taking all that risk to make so little return? Just dumb.

  13. IT IS VERY STRANGE THAT A PLACE OF BUSINESS ESPECIALLY AN INTERNET BUSINESS, CANNOT OR WILL NOT RETURN A SIMPLE EMAIL. I HAVE BEEN WAITING NOW FOR OVER A WEEK NOW FOR SOME INFO ON A LOAN, BUT NO ANSWER, I GUESS IN AMERICA ALL YOU NEED TO GET RICH IS A BIG PR MACHINE AND LOTS OF GULLABLE IDOITS
    CAN YOU SPELL S-C-A-M
    9-10-2007

  14. BEWARE!!! No wander people default, they stole my identity and have no intentions to pay back. Someone took a $5000. loan under my name. I never received any mail or phone call until the collection agency did.

  15. I have lent $600 through prosper.com over the last three months, at $200 per month and $50 per loan. I am satisfied with the loans I have made. Several loans on which I had winning bids were canceled because the borrower could or would not identify themselves properly, or could not provide verification of bank account, income, address or other claims they made to get a loan request listed.
    I call these actions due diligence but wish prosper.com would do more pre-screening.

  16. Prosper seems like it could be a good thing, if it was run properly, but I agree with the comment above. I thought some of the answers to your questions were vague and a little evasive. It seems to me that when your integrity is in jeopardy, you would do all you can to prove otherwise and Prosper’s representative didn’t do a very good job of it in my opinion.
    I’m a young adult looking to make a smart investment. Prosper was hinted to me, but it seems a little too dangerous and off-the-wall for me. I think I’ll stick with a CD account where there’s less risk involved.
    Thank you for the post! It was good to read, and so were the comments. Thanks again!

  17. Prosper does not offer any method for lenders to liquidate and leave, other than to stop lending and wait for their existing notes to mature or default. They need to create a process for other lenders to buy other lenders notes that are not in default.
    For Prosper to succeed they need to provide lenders with outside audits of the their accounts and a method for lenders to leave.

  18. Hello all…Ive been lending with prosper for almost 2 years and have been involved in over 50 loans and rank in the top 6000 lenders on Prosper.com
    I am currently earning 9.9%+ percent accounting for future defaults that havent occurred yet and may not. Prosper in the event of fraud has repurchased loans in the past and could use some work on the customer service end of it but all in all its a good company and I look forward to lending more this Holiday season.
    Check out my personal blog of my prosper experience for my history with the company

  19. Exchanging/lending money online with complete strangers? Not me. I’ve been a victim before (identity Theft). I’ll never do it ..EVER.
    This is not a good business model. Some transactions specially involving real cash should only and only be done in person…It’s very simply.

  20. I have been a Prosper lender for 8 months. I, like most Prosper lenders, strongly believe that Prosper was a terrific idea, but one executed horribly.
    Prosper´┐Żs performance numbers are MUCH worse than they advertise, its collections activities on late loans are anemic (only about 13% of the loan funds that go 1 month late are ever collected), its fraud detection abilities are poor (forum members have identified a number of fraudulent loans in the past; Prosper then eliminated making much of the data used to ferret out such loans viewable by lenders, and very recently, Prosper eliminated its entire forum, along with almost 2 years worth of collected wisdom contained in about 400,000 posts, and replaced it with a useless system that is essentially a Prosper FAQ); and serious questions have been raised about the ethics (and competence) of Prosper´┐Żs management.
    The claim by Prosper CEO and co-founder Chris Larsen (made in a number of recent press articles) that “Prosper’s default rate hovers at 2.7 percent” is highly misleading (to say the least). That figure counts only loans that Prosper has chosen to officially declare “defaulted” and sell to junk debt buyers, and it measures those loans against the total amount of loans originated (including many loans that are so new it would be impossible for them to be in default even if they never made a single payment as scheduled). Meanwhile, there are MANY loans that are 4 or more months late that historically will deafult virtually 100%, but Prosper does not consider those “defaults.” Various careful analyses of Prosper’s own data shows that the real default rate is closer to 20%, not 2.7%.
    The median projected Return On Investment for ALL moderately seasoned Prosper lenders (those with >20 loans and an average loan age of >6 months) is a little less than 5%. After taking Prosper’s servicing fee charged to lenders into effect, this is considerably less than can be earned on a fully liquid, FDIC-insured account such as from E-Loan (Larsen’s former company). Roughly twice as many moderately seasoned lenders have a NEGATIVE projected ROI (they can expect to earn NO net interest, but will actually lose some of their principal) than have an expected ROI >10%.
    Anyone considering lending at Prosper would be extremely wise to spend some time at http://www.prospers.org (an unmoderated independent forum where all things Prosper related are discussed openly by many highly intelligent and very knowledgeable people) and at http://www.lendingstats.com and http://www.ericscc.com (two third-party sites that use Prosper´┐Żs own loan data to present a huge amount of easily accessed data regarding the actual performance of Prosper lenders, groups, and loans).

  21. Let’s see, I made a total of 10 prosper loans at approx. 100 bucks each. Let us recap the loans one year later. Four are current and being repaid on a monthly basis. One was repaid in full after five months so full interest was not received. One is over 15 days late. One is two months late. One is three months late. One is four months plus late and one defaulted and not collectable. Prosper.com are you kidding?????
    What a complete scam. Most of these people were deemed by prosper to have A and AA credit so it wasn’t as if we were looking for big interest.
    Save your money. Invest in real estate.

  22. prosper denied a loan because they said my experian score was only 518. According to the account i have with experian, i have a 684. After contacting prosper, they claimed that experian uses a new state of the art with ground breaking technology to figure scores. and that this score greatly differs from so called regular scores that an idividual has, and is not allowed to be seen by anyone but the business inquiring. so what is the point of even paying the credit reporting companies for your credit report and score if the scores greatly differ from what you receive and a business receives. Sounds like a lot of crap to me.

  23. If you average 10% amoritized interest rate on prosper with a 100% success rate, with the 1% Prosper.com lender fee, it is the equivalent of earning only 4.63% on an annual return basis.
    Seeing as there is NO data on Propser.com borrower defaults, plus the fact it takes about 32 months to recover the original lended amount, and reliable bank CDs are going at rates around 5%… I just don’t see what anyone in their right mind would use propser.com. You would still make more money on a bank CD than propser.com with NONE of the risk. DUH PEOPLE!
    Add to that the fact that you have to submit your SS# and bank info, it just seems all too fishy.
    Basically, the risk far outweighs the return here. Stay clean in my opinion. Seriously.

  24. Im in Vegas. I have a very unique story. my credit is in shreds. my own fault, no 2 ways about it. but i have a very understandable explanation. i have $3000 in collateral (2 laptops and 2 desktops) I need to borrow $5000. And if i could find someone that had money to loan and they would just talk to me. i know we could make something work. i dont need allot of money, but i cant get going without it. im currently making a loan payment on a 2002 bmw (that was co-signed by a brother) ive completed all my schooling and testing. I have experience in my field. I can pay the money back in 3 months on the short side or 6 months on the long side. I can make 500 mo payments starting 45 days from the loan. i cant believe i cant find this.

  25. I need a car. It’s $5000. I have $2500. Can I get a loan from someone for $2500. The terms are $250.00 per month for 12 months. A profit of $500. Anyone interested. Please help!!!

  26. I have a stable and good job, I am also graduating in my Master Degree. My credit score was 730 but because the problems that we had with hurricane Wilma in the past ,I almost lost everything. I am restablishung my credit bit banks do not approval a credit line yet because of my current credit score. I need around 15.000 thousnds dollars and I can make payments montly ( 350 per month ) Is there anybody that would like to help. I am honest. My e mail is cusciano@bol.com.br
    Thanks, Glauco Cusciano

  27. I’m not interested in borrowing money, Although I guess everyone could use some help now and again. However I’m more interested in how I could go about making my own money, as I am a 43 year old with one child (16 year old son), he is a wonderful boy. My husband took ill 2 years ago and I’ve been supporting my family the best that I could. My son will be graduating high school next year and plans to go to college, with dreams of being a psyciatrist. This idea about people to people lending seems to have many advantages for both parties, the lender and the borrower. I have quite a few years of marketing experience and if I could help in anyway by working from home,(market your business, help w/advertising, screening potential clients ect.)please let me know via E-mail karensbeautifulyou@verison.net

  28. I have been involved with Prosper for over a year now and have made about 10 loans or so. Averaging over 10%. I put about $50 per loan. I only loan to top 3 credit ratings, to people who are asking for NO MORE than $5,000. I try to stay at $3,000 or less loan request amount but sometimes will go to 5k if everything else looks real good.
    I also get 6% interest on high-yield checking. There are a couple of requirements but easy for me to meet them. Just search high yield checking and see what you come up with. I prefer turbochecking.com though others pay a little more. You can do it all online, without a local branch in your state.

  29. I’m what I like to call, a “borrowing consumer”. Say you purchase a computer, and get it financed. Then somewhere along the way your car breaks down, so you need about $700 to fix it, on top of that you have a gigantic phone bill and all of your other little bills suddenly jump out at you because of all of this stress. A simple fix would be CityBank ( or similar entity ). I have taken 3 loans over the past 4 years from CityBank totallying in $15,000. Each loan was taken out for a 3-5 year payoff period. I paid one off in a year, another off in 1.5 years, and this one I’ll have paid off after a total of 8 months.
    The point to this is, the accumilated interest I paid was a mere fraction of what my interest would be if I paid the debts individually and during the prescribed time. Minor debt consolodation would alleviate some of the stress some of you bring upon yourselves.
    I am now seeking a loan for 8k. I have 8k now and I’m looking to purchase a car. I was looking at prosper, but after reading some reviews, I’m having second thoughts.
    -David.

  30. I’ve been lending on Prosper from some time now. I haven’t had any problems and I’ve made some pretty good money. Alot of what I’ve read from some posters here sounds to be victims of Prosper.com’s fraud detection system. As far as customer service, I called the 800 number listed and spoke to someone in person within 5 minutes. There was a separate site which listed how lenders are doing. It listed the amount they’ve loaned, the amount they made back in interest, the # of defaults and how much they’ve lost through defaults (I can’t remember the name of the site, a little help please?). According to most of the articles I’ve read and news stories I’ve seen, Prosper has done very well for their lenders. So for the guy who posted that he was a top 10 lender, I say Bunk! The top 20 lenders are in the 15-20% interest range.

  31. It seems like many of the loans on prosper.com are debt consolidation loans which are in my opinion a good thing in general for those obtaining the loans.
    However, I would hesitate personally to loan to someone consolidating debt on account of the lifestyle or situational factors that caused a given person to need a debt consolidation loan. People, on average, don’t change overnight.
    That being said, don’t think me elitist – I myself needed a debt consolidation loan after graduating from college for 30,000. I did manage to get my habits under control and now have a debt to income ratio of 0.
    This is an extremely risky adventure for those of you daring enough to part with your money.
    As a comparison – S&P 500 returned an average of 10.52% *annually* between the years of 1994 and 2007; and that includes the tech burst. http://en.wikipedia.org/wiki/S%26P_500#Records
    If you want your money to earn for you then read a book on investing and put those principles into action. I recommend “The Intelligent Investor”.
    If you want to donate to a charity, then give to prosper.com .. personally I’d rather give my money to a church or a school than someone who wants a new F-150 pickup truck and has a 30% debt to income ratio.
    Based on all this negativity, my thoughts above, and the graphs of actual data showing default rates here:
    http://www.prospers.org/blogs/Fred93/2007/12/02/prosper_late_loan_statistics
    I think I’ll pass on prosper.com

  32. I have been a lender on Prosper for over a year now. I put in ~1K to test the waters and see how it worked. I have spent a decent amount of time reading about prosper and looking at statistics on the prosper and lendingstats sites.
    Nothing I have ever seen indicates that prosper.com itself is a scam, though AFTER somebody has stolen an identity prosper could be used to cash in. I would also venture to say that no matter how much effort is put into stopping scam loans from being made some will get through- it is an inherent risk in P2P lending.
    So far I have made ~30 loans and I do not believe any of them turned out to be all out scams. I have 3 that are +4 months late and will default eventually. These were horrible choices in hindsight- although the statistics show that you risk defaults no matter who you lend to. All said in done I would expect to break even or earn the equivalent of <2% APY if I started taking money out now.
    Your money on prosper is not liquid- there is no secondary market for prosper loans. This is a major difference from a savings account or most CDs (which allow you to withdraw early for a fee). In a lot of forum posts I am amazed that people don’t seem to realize this BEFORE they lend.
    In summary- lending on prosper is not even close to a “safe” investment. Comparing it to a CD is like comparing bull fighting to a card game – “ain’t the same ballpark, ain’t the same league, ain’t even the same #W$@# sport”. P2P lending is a liberating idea- and only time will tell if Prosper will successfully pull it off. Prosper really hasn’t been around long enough to consider putting money into it anything but a speculation. However, it is a lot of fun if you like this sort of thing as I do, and lately my prosper performance has been a whole lot better then many of my sensible investments……
    If you do start lending my most valuable piece of advise is: stay away from >20K loans!!!!!

  33. Two years ago i placed money with prosper loans.
    i never invested and during that time i have tried to “get my money back” with no success.
    any ideas?
    they now won’t even recognize my proper acct.
    hooke1923@gmail.com

  34. What is the customer service phone number for prosper.com? They closed my account because of a duplicate account but cannot send them an email thru their site because I cannot get logged in.
    Thanks,
    Kevin
    kevinh865@gmail.com

  35. I was wondering if Prosper is a good company. I would like to hear from anyone that has gotten a loan from them recently please. Thank you

  36. Interesting concept, but the structure does not seem very stable to let my money flow to strangers.
    How do lenders get excited about 8% – 10% returns with major risk over a 3 YEAR period…. and these group things they talk about, cracks me up. We are here to help the community, with social group lending.
    Let me re-phrase that, I BELIEVE you LEND your money to PROFIT! Cut the bull.ch.it!!! That one Hawiian lady would be a great tupper wear salesman and a good one night stand.
    RayJemmie

  37. What if a person or persons you know are involved in Prosper but they never repay loans? How can you alert Prosper without having an account?

  38. I can attest that as soon as I signed up for it, using a never-before-used email address, I started getting around 300 spams a day for payday loan scams.

  39. I am the owner of Vno Transportation LLC and i am seeking start up funds. I need $10000.00 to get a truck on the road and insurance. I would like to pay the money back in 6 Months in full plus a fee, if this sounds good please contact me by email:william.parkhurst@yahoo.com

  40. William, Prosper’s out of commission at least temporarily (perhaps permanently) due to issues with the SEC and a class action lawsuit by lenders.
    However, competitor LendingClub.com is up and running after going through a quiet period while registering with the SEC. You may want to try posting a loan request there.

  41. I loaned money on Prosper last year and got burned on every loan I funded. Each one ended in default-so either I am not good at lending or the world really is full of people who intend to borrow with no intention of paying back. With today’s money climate I would be hesitant to lend again-even after they lift the restrictions to sign up.

  42. I transfered $3,500 from my bank account to Prosper in December 2007. I coose to have their automated system select my loans. I elected to have very conservative portfolio, and based on the history of loans with AA+++ ratings, I expected a moderate return of 7.5%.
    Will it has been 18 months, and my $3,500 investment is now worth $2,818 which equates to a annualized lost of (13%) A total of 20 lonas out of 88 have been charged off. Some are in different stages of past due which means I expect to have more charged off down the road.
    If you are thinking about investing your money in Prosper, take it from me, you would have much better luck on rolling the dice at Vegas. Run as fast as you can from this company

  43. Could someone please give me a phone number for Prosper customer service? I can’t find phone contact info anywhere on their web-site. Thanks

  44. At the end of September or in October I will need to borrow $6,000 to $7,000 for a car after I am cleared in bankruptcy. Traditional banks won’t loan for a while and I can’t wait many months to get my credit score to go over 640 to be eligible to use a site like Prosper.com. If anyone can help, please shoot me an email at robertriley2004-needloan@yahoo.com. I make over $50k/yr. with a very stable residual income that I’ve had grow for 7 years now. I found a 2008 car with under 10,000 miles that I am planning to put about 50% down. So I am not looking to finance 100%. I will have a lot to lose unlike many of the people borrowing on Prosper. I plan on paying the loan back within 4 to 6 months. This car will be my only debt since you won’t be competing with any other creditors. If I start getting hammered with spam, I will delete this email address. Serious people only.

  45. My husband and I have had great luck with Prosper.com. We have a current loan with them and are thinking of taking another. Prosper has always been professional and prompt in our dealings with them. I am so sorry for those people that have commented about people not paying their lenders. My husband and I have never been late on one of our payments to our prosper lenders and I wish other people would take their obligation to pay as seriously. Because of those that choose to not pay their loans, it makes it difficult for the people that do pay on time to get a loan. I guess the bottom line is – Prosper is great for people who want to lend money to those members that are great at paying it back. Our credit score is quite low due to our ex’s and their unwillingness to pay for what they have and Prosper is the only organization willing to take a chance with us and they have not been sorry. I wish all the Lenders and Borrowers good luck and to those that take out a loan and do not intend to pay, stop, do not hurt others because you do not care about your credit.

  46. My husband and I have very good credit 730+. We are looking for a personal loan. Because my husband owns his own construction company are taxes do not reflect what we make.
    We own our own home for 10 years. We pay our bills on time every month.
    We make a six figure income but do not report it. We are looking for a loan of $40,000. We would love to meet with you in person or talk on the phone. We are a honest, good family and we need someone to trust us. Due to the economy banks will not do stated income personal loans.
    Please email us at yaya694445@aol.com – we are very serious and will pay back our loan to you.

  47. I was looking for a high-risk loan, and somehow ended up here.
    The idea behind prosper.com sounds fantastic! However, hearing from testimonials from people all over the web, seems like the failure of prosper.com has been it’s poor administration.
    And also I agree with many of you that now these days one has to be extra careful when it comes to handing out personal information and money.
    I rather make business with somebody directly. I need $3,000 to pay off some school bills and would be paying it within 3 months. I have prove that I will have money to pay it off. I’m willing to pay $3800 at the end of the loan ($800 profit). I’m serious and responsible. I own a small business in California, so i won’t be going anywhere for such a small amount.
    Anybody interested please email me at em8tuc@gmail.com and i’ll provide more details about my situation.

  48. I am seeking a $5,000 personal loan with payments of $200 per month for 36 months ($7200 total payback). The funds will be used to pay off some crucial short-term debt. I’m currently paying approximately $280 per month in storage bills, so I can prove beyond any doubt (with receipts) I can service the $5,000 loan. After reading the comments posted on your site, I am very skeptial regarding Prosper.com. It would appear all they are after is people’s personal identity and not much more. I’m a LEGITIMATE person whose had difficult times but is now starting to get his life back in order. If there’s anyone who sees this and is willing to give me a second chance in life, who has money to lend and is looking for a good return, I am honest, trustworthy and am a REAL PERSON. I can assure you, your loan will be PAID BACK.
    AL… alfredplmbo1954@yahoo.com

  49. wow. i read all this and think im done for. i been trying every thing to get a 4.300 loan to pay off my home, and use my home as collateral.naw its not worth much but its the world to me, just a small 2 bedroom home in a small town in missouri, the house was rundown and not livebul i got it for 14.000 did enough work to make it livebul iv lived in the house for 7 years now well last year i lost my job and now im so far behind there going to take my home,i cant belive i got it paid down to only 4.300 and now im going to lose it.i have my 75 year old mother and father liveing with me. i do ebay just to make money to keep my power and water on and some small stuff going.my credit is bad now from cards so no bank will help, iv spent god only know how meany hours on the net looking for help with nothing but people trying to scam me, last year i got over 2.000 and sent it out to people telling me they could get me loans but i have to pay for this and this and this, i belived them and got money from friends and family to do this now i owe them to some tell me dont even worrie about it,but how can i not.iv looked for work but nothing going on right now so where am i to go where are my mom and dad to go.its hard to belive theres not a soul out there that has a heart any more because intodays world you cant tell who is honest and whos trying to scam you. so for people like me, i guess if i dont find some thing soon my car will be my new home and the owner will turn around and sell my house for a higher price because i put the work into it to make it livebul.so thank all you scammers for makeing it hard for us who really need the help..
    Mr. Russell brown, allen662@yahoo.com

  50. I applied for a loan and had to jump through a lot of hoops for a $5000. I just wanted it to help pay off a cash advance I had to take when my wife and I sold our home for less than it was worth: 8.5% is a heck of a lot better than 29.9%. Everything was going smoothly until the final phase when I get a call from “Evan” who politely told me that my loan would be denied because I was missing my w-2 from 2008. This even though I’m a professor of business at Marymout University in DC, had sent in my latest pay stub as well as my appointment letter for 2009-10 showing I will continue to be gainfully employed. They verified my social security number, my credit card number, my address and a lot of other personal information to confirm my identity. But they just lost business because of that missing “customer service” element. LOL! I don’t need the money THAT badly, but I do think it is important for you all to hear my story. No “win-win-win” on this one, guys. Thanks Evan!
    “Rules exist to serve people, not the other way around.” – Michael D. Kull, Ph.D.

  51. I found Prosper via an internet search. I stopped registring when my SSN was required ad thankfully found this blog. I cancelled my sign up.
    While I am here, my story in a nutshell is, I am seeking 35k loan @ 10%-12% which I’d like to pay interest only every 6 months for 2-5 years. I am employed with same company for 21 years, own 3 homes, all 30 year, no toxic mortgages. Credit rating was 700+ before I took my cards to near max with zero defaults or lates and am current now (but struggling). I incurred excessive credit card debt due to medical expenses for a family member and gladly would have sold my home to cover expenses. I am looking to trade 19%-29% interest rates for less. My plan is to sell two of my 3 homes when the market will tolerate to repay the loan in full. 1 (4) bedroom apprasised at 350k (owe 265k) and the other (3) bedroom at 300k (owe 335k). My debt to income too steep to go with traditonal bank. Everything stated here is documented and easily proven.
    If this sounds like favorable venture to anyone out there, please contact me @ Endzonecvr@comcast.net
    Thanks

  52. I am seeking $700 for bills,not sure the lowest you can borrow and am not trying to borrow out of my range,but my bills i need to pay only total $2800 and need $700 first payment.Can pay back by the first of Feb in full with interest. If willing,contact,Kennye68@aol.com

  53. Needing to borrow up to a thousand for only a month,$700 is just a little below my needs right now.Need help and have no problems with paying off loan in full with interest.Own a house and have very low overhead,just ran into a bit more in bills this month due to illness.Thanks,Kenneth

  54. So I just started working for this outreach program, They do things like find restaurants to donate food to youth. They work towards empowering youth, teaching them that they can make the changes and improve thier living conditions by maintaining a clean enviorment and they can start in thier own communities. My thing is that the donations they do recive are only for daily or program usefull, so I’m trying to figure out how to get larger donations and where to look for them. Is their anyone who can help with the info I’m looking for. Thank you.

  55. I am a single mom who works and attends school full time, I am having difficulty making ends meet, and is in need of a small loan for about 2,500. please let me know if anyone can help. I need it asap.

  56. Online Loan Application Form
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  57. All I can say is that I recently received an official letter from a lender listing my credit score as 697, I applied with Prosper and they cam back instantly telling me my credit score was only 635 and that I could try this other site called credit.com ….unfortunately for Prosper the same exact source ( Experian) is the source of both the written letter I have and Prosper claims Experian is their source as well…so to me, this looks like some kind of scam

  58. thanks for sharing this information …i have little knowledge about it so your info about Prosper.com is very useful to me.

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