Banks Say No? Prosper Lenders Says Yes!

So heres the scoop on Prosper.com borrowers. They have usually been refused by local and even some online banks for a number of reasons. The most common reason is bad credit in the past. Prosper.com lenders are able to look past that and into the borrowers story. I myself try not to read to much into the story but if they mention something that I prefer not to lend for I skip on to the next listing. The next most common case is a tough one its the borrowers with very little credit history. This causes them in some cases to have a low credit score and to pay much higher rates but as most banks wont lend to these people lenders on prosper may.

Now why would anyone want to lend to someone that the banks will not. Its all about the interest rate. In the loan range that I target current rates are anywhere from 7.98% to 24.67% for the best credit to the worst. There is one small problem with this rate.. its a complete gamble but its a cheap one. The minimum bid currently on prosper is $50 so its a $50 bet that could potentially work for a length of 3 years. each month collecting a little piece of that bet back plus interest.

To date *(Oct 31, 2007) $98 Million have been lent via Prosper.com with the person to person lending system that they have pioneered. From anything from a diamond ring to refinancing a mortgage.

Its called the eBay of money and there is good reason. A borrower will post a listing very similar to that of a eBay listing and tell a little about him or herself. They will post a requested rate and launch the listing for lenders to see. Each lender can bid anywhere from $50 to the entire amount of the loan. It gets very interesting torwards the end of the listing time as more bids come in teh rate for the borrower goes down and so do monthly payments for them.