The Prosper Community is a dynamic group of borrowers, lenders, and group leaders, all brought together for the common purpose of exchanging money.  Over the past year and a half that I have been a part of it I have seen friendships form, enemies get created, and romances take place.  Prosper touches a spot in all of our lives, and whether we love it or wonder just why we are here, very few can remain ambivalent.

Prosper itself is a lesson in life, and it’s a lesson that is difficult for some of us to handle.  Many of us came to Prosper truly believing in our fellow humans, listening to the sob stories of borrowers and hoping to make the difference that will turn their lives around.  Through the difficult trials of watching our first late payment, followed by more, and our first default, also followed by more, all accompanied by a fall in our expected ROI, some of us have learned about a side of human nature that we never knew before.  We lose some of our trust and become hardened to the stories being shared by the new borrowers that come along.

There is a huge diversity among the community, from lenders looking for a place to stick some extra money down to the borrowers that are living paycheck to paycheck, and everyone in between.  This frequently leads to misunderstandings between community members.  People handle misunderstandings differently, and some people leave the community angry, while others use it as an opportunity to learn something and improve themselves. 

One of my favorite aspects of the community is watching borrowers that are barely making it come here requesting a loan, and ending up not only getting their finances under control, but becoming an active member of the community and offering advice to others that are in the position they started out in.  Making a difference in people’s lives is what I see Prosper as really being about.

While the community has gone through its ups and downs, being a part of it is an experience I would never give up.  I have grown in many ways.

—

Shenandoah is a lender and group leader on Prosper.  Her Prosper group Rocky Mountain Community is for residents of the Rocky Mountains, specifically in the Colorado and Wyoming areas .

From the Prosper Mailroom: Lambda_Phoenix_Rising

196 people who did not know me said YES when my own credit union, where I have been a member since 1979 and major on-line lenders said NO. Prosper members even bid my interest rate down 4% saving me hundreds of dollars over the life of my loan. Signing up was fast and easy and before I knew it my loan was funded.

I have made ten payments over a time period that 5 were due. I’m very excited about being on track to having my 36-month loan paid off in 16 months and improving my credit rating. I am telling everyone I know about prosper.com, including my credit union. Now that the weather is cooler, I’m back in my lumbering gas-guzzler, but the moment it gets warmer I’ll be back on my bike. And what kind of mileage do I get on it? 48 mpg city and 57 mpg highway. (Editor’s Note: The loan was taken to pay for the bike.)

I’ve already sent all of my lenders a thank you note, but I’d just like to thank you all one more time. I could not have done it without you and prosper.com. THANK YOU PROSPER.COM.

—

Lambda_Phoenix_Rising is a borrower and lender on Prosper.

We completed a debt sale this week which will be evident as of today on the account pages of lenders who own loans that were sold.

When a loan is sold, it is marked as defaulted on the Prosper site and in the performance metrics. If one of your loans was sold you received or will receive an email notifying you of the default and indicating the sale amount. Sale proceeds will be transferred directly into your Prosper account a few days after you receive your email notification.

Here are the details of the sale:
   • Eligible loans were more than 122 days past due as of December 4th, 2007, provided the loan was not part of any bankruptcy filing.
   • 701 loans were sold.
   • Price range: 2.8% - 14.5% (as % of principal).

Pricing is determined solely by the debt buyer and can vary from sale to sale. Several factors were used to determine pricing in this sale, with homeownership, credit grade and state being primary reasons.

Pete Carill is the legendary former basketball coach of Princeton University. His style of play made famous through heartbreaking defeats such as the 1st round loss to Alonzo Morning’s Georgetown and brilliant victories like winning the 1975 NIT or Princeton’s victory over UCLA in the 1996 NCAA.

In semi-retirement he wrote a book The Smart Take from the Strong: The Basketball Philosophy of Pete Carril. Why do I bring this up on the Prosper Blog? I think his philosophy on life and basketball applies to P2P lending on Prosper.

His father used to say, “The strong take from the weak, but the smart take from the strong.” Prosper is a Web 2.0 lending community. As lender in the community I think all lenders can be categorized as weak, strong, or smart. Not in absolute terms but in philosophical terms. We are an egalitarian free market community; the only thing stopping us from being the best lender on Prosper is ourselves.

How do we define “best” lender? Well that is the beauty… “we” don’t, each individual can do so anyway they like. As long as you are being smart (in terms of your ideal) about how you go about your lending then you will be successful.

Personally, I want to make money (better than savings account), explore p2p lending, and be leader in this brave new world. Others might simply want to be social lending in an effort to help others. Rates will be set were the market sets them. Your ROI depends on your loan selection as much as the interest rate.

How will I become a better lender? Data analysis, trying new things, HIGH interest rates, and LOW default rates.

—

RateLadder is the Editor-in-Chief of the Prosper Blog.  He is a Prosper lender and has been since July, 2006.  He has a passion for p2p lending.  He owns RateLadder — My Prosper.com Journey and other P2P Lending Adventures, P2P No Bank the P2P Blog Aggregate, and ProProsper — Professional Tools for Prosper Lenders featuring SQL access to Prosper data.

This is a common question in personal finance circles. Personal finance guru David Bach made the question popular by writing about people’s daily spending habits. He calls it the “Latte Factor” because so many people spend a few dollars a day on their morning specialty coffee. It doesn’t have to be limited to coffee. I’ve known people to buy their lunches for $10 a day. Imagine the savings of making your own coffee and lunch at home. Those simple changes add up to hundreds of dollars a month. If those savings are invested, they could be worth hundreds of thousands of dollars over time.

Often times when people realize this, they change their spending habits. The question is when do you stop trying to save every penny?

I struggle with this at times. I find myself looking at every penny that I spend and scrutinizing whether it’s a necessary expense. I have to admit that it’s not a comfortable frame of mind to be in.

Like many things in life, balance and moderation is the key. However, I think how vigilant you are with small expenses depends on your income. If you are high level corporate executive, you will probably find that saving a dollar here and there is more work than it’s worth.

On the other hand, if you are living on a fixed income, you may find it worth a lot of your extra time to save a dollar or two. I try to position myself somewhere in the middle.

I look for easiest things that I can do to save money. I find that this often gives me the best value for my time. Some might know this phenomenon as the 80/20 rule or the Pareto Principle. For example, I’ll buy generic foods rather than spend time clipping coupons for brand name products.

How much effort do you put into saving money on small purchases?

—

Lazy Man has been a lender at Prosper since February 2006. His lending has been written up in the Globe and Mail, Canada’s largest national newspaper. He is the author of the personal finance blog, Lazy Man and Money. He enjoys watching Boston sports while sipping diet cola