Sweet Prosper is Back!

Being that I am in debt elimination mode I haven’t talked about my investments that much.  But on February 15, 2007, I was intrigued by the idea of Prosper and have since built a very very small portfolio.

As the P2P Lending market grew so did the competition and Prosper and LendingClub both went into quiet period as they upgraded their services.  While LendingClub came out of their quiet period a few months ago, I just received an e-mail from Propser stating they are back up and running.  During Prosper’s quiet period I was removing most of my gains, so as far as my current risk, it is very small right now.

What Changes did Prosper.com Make?

Prosper EMail

Straight from their site:

  • Increased Layers of Security
  • Fine Tuned Bidding for Lenders
  • Trade Existing Loans

Increased Layers of Security at Prosper.Com

Prosper now boasts that,

Those of you who are returning lenders will be familiar with our bidding system on Direct Peer-to-Peer loans:

New borrowers are now required to meet the new minimum credit score requirement of 640. They can request up to $25,000 for a three-year fixed rate loan.

Lenders can now start their bidding with $25.00 (previously $50.00) which will make it easier to create a diversified portfolio.

Prosper has also improved its risk rating system with the introduction of a new proprietary system called Prosper Ratings ranging from AA – HR. Each Rating represents a loss rate range. Prosper Ratings are based on historical loan performance data and are designed to better convey risk. The Prosper Rating letter grade will now be shown in the listing along with an estimated loss rate, and a narrower credit score range. Credit scores shown will be in 20 point ranges (previously 40).

 

I like the reduced loan rate since I am all about diversity when dealing with this world, and the raising the minimum credit score makes sense…but could limit investing opportunities.

Fine Tuned Bidding for Lenders

Prosper has decided to show/allow lenders to bid on net return rather than bid and then figure out after service fee returns.  Makes sense.

Trade Existing Loans

While I am aware that these seems to be the reason that most P2P lenders went under the wing of the SEC, I am not sure I am into it.  I like Prosper.com because of the lending part, and the holding of notes, not the trading of notes.

First thing I noticed, I have to sign up for a Folio account, which requires me to do all sorts of paper work since I am a FINRA registered agent.  So I am not sure I will even take advantage of this addition!

7 Responses to Sweet Prosper is Back!

  1. Hi,
    I was reading your blog and I was wondering why my application was declined right away. I have a 1 year loan woth Prosper and I have been paying properly, I have been doing all my other payments properly too. Not even one is delayed. The problem is I have lived in the US since 2005 only and most of my accounts seem to be maxed, due to the lender or credit card agency not properly displaying my credit limit or suddenly lowering it to the level of the balance. But I have been a good lender all through those 3,5 years. Now prosper is telling me my scose is lower than 640 and has gone more than 40 points since last year, but is unable to explain me how they got to that number. My experian score is much higher than that and my score never went down more than 40 points anyway. Also, my loan was rated a C last time and this time it is rated an HR and prosper cannot explain me the criteria used in this as well. since last year, I closed a lease account and opened only one more account. What is the big deal if I am paying properly and do not have any collections or anything like that? Please explain if you know it.

    • Evita,

      Prosper’s website makes it clear that they do not allow borrowers who have credit scores below 640. Whether they are using FICO scores or one of the Credit Companies, it is irrelevant because they have rejected you.

      How would I handle it? I’d take a look at my situation and figure out why I am in the 640 range and how I could get it up, even if its on the short term.

  2. I have been told that our credit score has nothing to do with our income or employment history. Peer-to-peer-lending companies are no different than banks. They trust your credit score more than you debt-to-rational income. My advice is, if you can’t afford it, than you don’t need it. either do without or put whatever you want on the backburner when you saved up enough cash.

  3. i love Peer to Peer networks. i download from emule and bittorent all the time and you can get lots of stuff from them.

  4. Detoxtechy,

    I am pretty sure you are referring to illegal file sharing P2P networks and that is not at all what I am talking about lol

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