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alligator · May 28, 2006, 04:31 PM

I just found this site, which was reviewed on our local newscast a while back. Go to Prosper.com. Apparently you can borrow money, or loan money on this site.

Has anyone used this before?

I'm considering loaning money out - makes me feel like a mobster. Maybe if they don't pay, I'll get to fit someone for cement shoes.

hickey · May 28, 2006, 04:42 PM

i heard about this on the news a few months ago. I would be real leery about lending large sums of money, but i would have no problem borrowing large amounts.

greenamp · May 28, 2006, 05:08 PM

Wow that's a really cool idea.

bradoesch · May 28, 2006, 06:52 PM

It sounds like a neat idea, but I wouldn't lend out large sums of money either. They suggest you diversify if you want to be safer.

From the FAQ:

If I make a loan through Prosper, what guarantees do I have that the loan will get repaid?

There are no guarantees that your loan will be repaid

Chuckit · May 28, 2006, 07:27 PM

Neither a borrower nor a lender be. Unless you're a bank. 'Cause they don't give a crap about Shakespeare.

torsoboy · May 28, 2006, 09:50 PM

The rates aren't very good that the people are lending for, so I wouldn't borrow from it. And there is no guarantee that the people will ever pay you back, so I wont be lending there. Sounds like a great idea, but poor execution. If they had a 6 or 7% cap on lending and insurance in place that you would get your money back I would think about doing it.

Spliffdaddy · May 28, 2006, 10:32 PM

There's no such thing as free money. Any investment that yields more than about 4% is subject to risk.

Some of those loans have APRs of 35% !

Geez. I'd say a person would have to expect to lose their investment if they loan money to a credit risk so bad that they require a 35% interest rate.

Eug Wanker · May 29, 2006, 12:27 PM

Does Prosper.com offer a hired-goons-to-break-non-payers'-legs service?

Peter · May 29, 2006, 12:33 PM

sounds dodgy... How would you get your money back?

Obi Wan's Ghost · May 29, 2006, 12:39 PM

Originally Posted by Eug Wanker

Does Prosper.com offer a hired-goons-to-break-non-payers'-legs service?

What an idea! Let's chip in our money together to create an an Ajax powered Web 2.0 debt collector site! Who is game?

digitalmafia.com has already been taken by a parkistani though

Parkistani is my name for domain parking terrorists.

Spliffdaddy · May 29, 2006, 01:13 PM

Originally Posted by Peter

sounds dodgy... How would you get your money back?

By not loaning money to the bad credit risks.

According to the website you are not allowed to seek payment on your own. You have to let their collection agency attempt to collect the debt. It isn't legal for mere mortals to be in the debt collection business.

Lending institutions take the very same risks with their money. Which goes a long way toward explaining why certain people can't get loans. This website is no different, really. A bad credit risk still can't get a loan from there, either.

You hafta take a big risk to get a big reward.

torsoboy · May 29, 2006, 01:57 PM

Originally Posted by Spliffdaddy

By not loaning money to the bad credit risks.

According to the website you are not allowed to seek payment on your own. You have to let their collection agency attempt to collect the debt. It isn't legal for mere mortals to be in the debt collection business.

Lending institutions take the very same risks with their money. Which goes a long way toward explaining why certain people can't get loans. This website is no different, really. A bad credit risk still can't get a loan from there, either.

You hafta take a big risk to get a big reward.

So how do mere mortals get a credit report on these people? I didn't see that on reading their info pages.

Spliffdaddy · May 29, 2006, 04:50 PM

Originally Posted by torsoboy

So how do mere mortals get a credit report on these people? I didn't see that on reading their info pages.

You have to register as a lender in order to see their credit reports. Each borrower is supposed to complete a credit application - and, shortly thereafter, their information is 'verified'. Look at the 2 icons to the right of the borrower profiles. The 'house' icon indicates the borrower is a homeowner, the other icon indicates that their credit information has been verified. The 'lightning bolt' icon means the borrower is willing to have monthly payments direct-debited from their bank account.

The borrowers are given a credit 'grade', as well. I don't know what criteria are used to establish that grade. The grades range from AA thru E with additional categories for "High-Risk" (HR) and "No Credit" (NC) - for those with no credit history.

macintologist · 05:12 PM

Kickass idea and if someone requests a large amount like $15,000, a large group of loaners can put in a small amounts so that it all adds up. So I could lend just $1k of that $15k and others put in some as well. Sweet.

macintologist · May 29, 2006, 05:08 PM

http://www.businessweek.com/technolo...213_147523.htm

Here's how Prosper works: People who want a loan of up to $25,000, for whatever purpose they state, put it up for bid at a maximum interest rate they're willing to pay. Although they can remain anonymous to everyone but Prosper and regulatory authorities, they must submit to having their credit record checked and their credit grades -- determined from their so-called FICO credit scores -- displayed on their listing. They also can provide their annual income, so a debt ratio can be determined and also displayed.

People who want to lend money bid in increments starting at $50, usually just for a portion of the loan, to reduce risk. They also can have standing orders to provide loans of a certain size to borrowers with specific credit grades, interest rate requests, and other criteria.

PAYMENT PROCESSING. Prosper provides borrowers and lenders information on standard interest rates and default rates associated with the various credit rating levels, so they can make judgments about reasonable payments and risk levels.

When the listing ends, the bids with the lowest rates are combined to produce a single loan that's repaid over three years. Prosper draws payments from the borrower's bank account and sends them monthly to the various lenders' accounts. For its cut, Prosper charges borrowers a fee equal to 1% of the funded loans, as well as a 0.5% annual loan-servicing fee to lenders.

turtle777 · May 29, 2006, 10:33 PM

Originally Posted by Obi Wan's Ghost

What an idea! Let's chip in our money together to create an an Ajax powered Web 2.0 debt collector site!

Muahahahaha !

-t

torsoboy · May 30, 2006, 12:40 AM

I have been looking at the amount that people are lending and it is CRAZY how small the amounts are! Tons of people only bid $50 (the minimum allowed) on loans. For example check out this one http://www.prosper.com/public/lend/l...istingID=15365 it is for $8k and it took 89 people to fill the loan. With the loans being that small I guess there is not really any worries about your money. Propser must have a heck of a time getting all the banking stuff working together with that many small bids.