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Carnival of Peer-to-Peer Lending #7 — Rate Cuts Hit Prosper

April 3, 2008 by Pinyo.

Welcome to the Carnival of Peer-to-Peer Lending #7: “Rate Cuts Hit Prosper” Edition! When I first started investing in Prosper last December, the estimated return for a Conservative Portfolio Plan was 9.20%. Last time I checked, this number was down to 8.00% and it’s even having problem winning bids at this lower rate. I guess this is bad for me, but good for borrowers and the economy.

RateLadder presents The Rule of 72 on Prosper posted at Prosper Blog: Prosper, the online marketplace for people-to-people lending.
Mike presents What Should My Target Prosper ROI Be? posted at Prosperous Land.
Tom presents Fynanz becomes the first P2P student loan marketplace posted at Prosper Lending Review.
Jim presents Top 11 Search Criteria for Finding Good Prosper Loans posted at Cash Back Ideas.
Mike presents Is Social Lending a Socially Responsible Investment? posted at Richer by the Day.
Mike presents What A Difference A Month Makes posted at Prosperous Land.
Lazy Man and Money presents Hack Your Credit Score? posted at Lazy Man and Money.
DebtKid presents p2p (peer-to-peer) lending: what is it? posted at DebtKid.
Dough Roller presents Reader Question: Should $15,000 be invested in P2P Lending or in a Better Mortgage? posted at The Dough Roller.

Other interesting peer-to-peer lending articles:

Prosper P2P Lending Update #2: Scary Graph and Stats at My Money Blog
Lending Club vs. Prosper at His Hers Money
Prosper and Selling Loans at Llama Money

If you would like to try peer-to-peer lending, please use these links to get your sign-up bonuses:

Lending Club – Earn $25 sign up bonus for becoming a Lending Club lender
Prosper – Earn $25 sign up bonus for becoming a Prosper lender

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6 Comments

Vered, 3. April 2008, 9:23

I don’t know… never heard about Prosper until today. Checked it out… I think I am going to stick with my mix of stocks, bonds and cash for now. Plus, as a holder of municipal bonds, I am lending too - though admittedly my return is much lower than the advertised Prosper return.

Keep us posted.
Christine, 3. April 2008, 10:40

I don’t think I would ever borrow through Prosper or other P2P lending sites. I don’t know… I guess I don’t fully understand how it works.
Mark @ TheLocoMono, 3. April 2008, 17:16

That’s funny. The average rates on my loans actually have gone up, even for the borrowers with good credit. I am starting to wonder about the accuracy of their portfolio alogorithm (spelling?).
Pinyo, 3. April 2008, 19:38

@Vered - It’s an interesting concept, but definitely not for everyone. Basically there are thousands of borrowers and lenders in these networks. Let’s say a borrower needs $5,000, whole bunch of lenders would each loan a small amount (as little as $25), so a $5,000 loan may be borrowed from hundreds of lenders.

Most of my money is in cash, stock, and bond too. I basically have “play” money in these networks.

@Christine - I have read one of the borrower said he borrows from LendingClub because he gets better interest rate than other unsecured loans and there is no pre-payment penalty.

@Mark - You have to look at the “adjusted” return after fee, default risk, etc. You could get a 20% loan that is expected to return only 5% after adjusted for risk.
Vered@MomGrind, 4. April 2008, 7:58

I guess I would be comfortable playing with very small amounts of money over there to begin with. I will give it some thought.
Daniel, 4. April 2008, 12:29

I did some calculations the other day comparing loan portfolios vs CD’s. The comparisons are without reinvestment of returns from loans, but it is still pretty interesting. I’m still working on a simplified model for including reinvestments while taking into account loan defaults.

http://www.step3prophet.com/20.....me-nu.html