Hi, I am considering diversifying into peer to peer lending via prosper.com--- pays decent returns and appears safe with correct diversification--- anyone here with experience, particullarly on the institutional lending side? thanks, surf
I remember when that thing first went live, it was a stinkin' comedy goldmine. There were a couple of people who had tracked loan performance across the credit spectrum and found that there really weren't any good returns to be made since the default rate was a lot higher than what Prosper had been reporting. I'm surprised this type of thing still exists.
Bad idea. All Loans Originated November 2005 - June 2009 put together have an average annual loss of 5.5% Average effective yield for all loans during that time was 12.4%. Actually loss rate was 17.9%. Average weighted credit score for all those was 720. http://www.prosper.com/welcome/marketplace.aspx Dont be fooled by the high returns for 2010-2011. Those are newly originated loans and the people havent had time to default yet. Most people usually pay their loan on time for the first 12 to 18 months...then they stop paying and you lose money.
I haven't logged into my prosper account in several years. Thanks for reminding me of this....I should log in and get the rest of my money out of that shithole. I think it has been almost 3 years since I got in, so whatever loans that didn't default are probably paid off now. (BTW, search my post history for a fairly long write-up about prosper lending...a lot has changed since then so what I wrote a while back may no longer apply.)