Back on Prosper.com June 2012

Im back lending on Prosper.com and its changed over time. The eBay like style has gone away. Once the loan is funded the bidding stops. I do miss the auction style format but with the new instant fund stlye my money can start working faster. Also they have a progress bar with each listing telling the lender (note buyer) how far along the borrower is with submitting his or her paperwork. I find this to be a useful tip in deciding to lend to someone or not. If they are puctual with their paperwork hopefully they are with payments to.

As of today Prosper.com has

1,350,000members

$348,000,000 in personal loans funded

 

Thats a long way from where it all started in 2006. The person to person lending has been a positive experience for me. I have maintained a positive return even when not reinvesting my payments for over a year.

 

The types of loans offered has also changed since I have been away. Loans are now available in 1, 3, and 5 year options. See below chart for the new loan products.

 

Prosper Rating	<=$4000	$4,001 - $7,500	$7,501 - $10,000	$10,001 - $15,000	>$15,000
•AA	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr
•A	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr
•B	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr
•C	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr
•D	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr	1yr, 3yr, 5yr
•E	1yr, 3yr, 5yr
•HR	3yr

Based on the historical data you can expect to see defaults and will be similiar to the chart below.

Prosper Rating	Estimated Avg. Annual Loss Rate**
•AA	0.00-1.99%
•A	2.00–3.99%
•B	4.00–5.99%
•C	6.00–8.99%
•D	9.00–11.99%
•E	12.00–14.99%
•HR	≥ 15.00%

So defaults are coming down and rate arent getting bid down. Theres still alot of money being loaned so I think this was a good move for Prosper.com and their model. I hope they are around for a while I really enjoy lending on the site.

Recent Site update at Prosper.com

Nationwide lending at 36% interest rate capAfter a couple years of turning away Nevadans completely and forcing Pennsylvanians to set their interest rates below 6%, prosper.com is opening up the marketplace to borrowers in almost every state of the union, with a marketplace-wide rate cap of 36%

Minimum instant transfer amount lowered to $50For lenders who install Prosper’s Facebook application, prosper lowered the minimum transfer requirement from $500 to $50. Additionally, the maximum instant transfer amount has been raised to 50% of your active loan value.What this means is that with as little as $100 in active loans, you can instant transfer $50 to Prosper for that “must have” loan that you just came across. Prosper’s Facebook application keeps your Facebook friends updated on your Prosper lending activity, and is a great way to share Prosper with your friends and family.

Second loan criteria updatedThe requirements for borrowers who wish to take a second loan on Prosper have changed. The new rules for whether a borrower is eligible for a second loan are dependent on the borrower’s credit grade, and the factors taken into consideration include time since last loan originated, consecutive months of on-time payments, and whether the borrower’s credit grade has dropped or not.See the full list of eligibility requirements.

Lender servicing fee for AA changed to 1% per annum. The lender annual servicing fee for AA borrowers has changed to 1%. Listings created on or after April 15 will be subject to this new servicing fee. Learn more about fees and charges.

Listing durations standardized at 7 daysAlong with some other changes to the listing creation process, prosper has fixed the duration of all new listings to 7 days. This change is part of a larger effort to simplify the listing creating process, and help more borrowers create fundable listings.

Your tax forms are right here. If you are a lender who owned loans in 2007 or earlier, and are eligible to receive a Consolidated Form 1099 from Prosper, your 1099 is available from the “My Account > Statements” page. Learn more about tax reporting. There are many other changes under the covers, and some not so under the covers.

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