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Addressing the removal of the Loan Description & Loan Details Fields

by Prosper on 09/20/13

Addressing the removal of the Loan Description & Loan Details Fields

Some of our lenders have expressed concern with the recent removal of the loan description and loan title fields on the Prosper borrower application. I want you all to know that we hear your concerns. This is something that we are currently testing. We have not made the decision to permanently remove these fields at this time.

I would like to take a moment to explain why we removed the fields and why we believe it will have a strong positive impact for our lenders long term.

  • Created Confusion – In recent user testing, we found that borrowers were significantly less likely to complete a Prosper loan application when they were asked to provide a Loan Description or Loan Title. Borrowers found this question to be intrusive and, in many cases, confusing to their private loan application process. These fields proved to be the biggest drop off point for potential borrowers. We removed them to gauge response for a period of time.
  • Supply and demand – We strive to have an onboarding process that is simple and easy and makes sense to users. The more simple a process can be made, the more potential borrowers we can reach. In order for Prosper to better streamline the borrower application and meet the demand that you all have expressed for new loans, we will consistently make changes to our platform that we believe will positively impact the way users interact with our product and ultimately, the way the platform performs.

Ultimately, we understand your concerns, and we are exploring the best way to meet both the lenders’ concerns and improve the borrowers’ experience at equal measure, including adding the field back in the near future. Standby for updates on this potential change and more as we begin to interpret its impact on our platform.

Aaron Vermut
President, Prosper Funding LLC

  • Corey McDonald

    I agree. I would like to see this return. I think it was something that kept away bad borrowers. Just because we have more volume now probably means we have more bad borrowers and fewer ways to filter them out. I think I’m going to reduce my lending until it goes back on.

  • bobby

    Why not leave the field optional for borrowers? Like many here, I would prefer to invest in those who describe their loans and it matches my goals. For those who would drop off in the borrower application at this point, let them skip it. That would allow lenders who want to see descriptions to continue to invest in those taking the time to describe their loan and for borrowers who can’t be bothered to fill that out, they don’t have to.

  • http://www.linkedin.com/in/derhodes Jeff deRhodes

    Hi Aaron, I fully support bringing these fields back.

  • John Curran

    I will cease using (and recommending Prosper to my investing friends) until these fields are returned; it appears to me that Prosper needs some form of Investor Advisory board to help prevent missteps such as this in the future.

  • AnnG

    I have stopped investing in Prosper until such time as this is changed. Every lender in the known universe requires a reason for borrowing, and if this is too hard to comprehend, you should hit up your family/friends for loans.
    Like everyone who is a lender, I want to help people in need, but I want to know how my money is being spent.

  • evergreen16

    Totally agree, and have stopped lending for the same reason.

  • Robert Smith

    Dear Generous Lemon,

    Apparently, Prosper found $50+ dollars willing to be lent out to borrowers without a loan title/description fields. Apparently, these lenders understood what “purpose of the loan” meant.

  • Fred Huling

    I agree wholeheartedly. I have stopped funding loans because I simply lack enough information. I have a background in retail lending which included HR clients. Scammers run when confronted with unveiling. Good people in a jam will work with a lender to everyone’s benefit. After all there is a profit to be made on lower credit ratings but one must be prudent.
    Prosper has more info, i.e. the Prosper rating (1 through 11), but we are not privy to the basis. I feel patronized when Prosper hands me a list of preferred applicants. Lets put all prequalified applicants out on equal footing with adequate data for us to digest.

  • brian burke

    What is the status of this? Has Prosper abandoned individual investors? I will start pulling money out of Prosper if the description doesn’t return. Make it optional for people. If they fill out the description in a meaningful, grammatically correct way, it adds confidence.

  • brian burke

    Yes but we have no opportunity to differentiate between a good and a bad business idea. Bring back descriptions or I will bail from Propser.

  • rberger909

    I could’t agree more with my fellow loan funders, removing this information is a horrible idea. I’ve also got to question the logic of going “all in” on the borrowers side while the loan funders get less information and absolutely ZERO support in terms of recovering loans that have defaulted. As it sits plenty of loans default with the information we already get, getting less information is bound to see these defaults increase dramatically as scammers will see this as a great opportunity and it’s going to leave us loan funders holding the bag.

  • Samir Nainanajad

    Any updates on if and when Prosper is planning to bring these fields back?

  • Dan Federman

    The details field isn’t fact-checked, so it isn’t terribly useful. Though it was a good indication of whether a user could write a sentence (which may or may not be a good indicator as to whether the loan would be paid back).

    I love the auto-invest feature, but I’d love to be able to access historical data in a machine-parsible format to better tune my auto-investing algorithm.

  • Steven

    PROSPER – please let your lenders do their due diligence. I was going to invest but until you change your mind, I’ve changed my mind.

  • Greg Littleton

    I’m a borrower and I’m not even sure if I’m supposed to be here or not, but I thought I’d throw my 2 cents in anyways. I agree with those that want the reason for loan field added back in. If I was going to loan money out to someone, I would like to have basic knowledge to where the money is going to be used. As a borrower I don’t feel like its an invasion of my privacy having to explain why I need to borrow money, money which is someone else’s. Some of us out here are trying to get rid of our debt and if telling you where the money is going makes you feel better as a lender, and will help with your decision, then the field should be there. Plus in my in case, if you look at my DTI ratio, the first thing you would say is why should I loan this individual money. But if you know that I’m requesting this loan for consolidation reasons, to get rid of the high interest rate credit cards, maybe that will help in your decision

  • Andrea

    How much longer do you need for this experiment? It appears you might be approving borrowers but won’t have any investors.

  • Doug

    They’ll have plenty of institutions investing, but they ARE cutting the individual out rather efficiently…

  • T_Will

    I won’t be investing anymore until the description field returns.

  • Galen M

    I am also going to reiterate my support for those fields. I think the power of Prosper is that the individual lenders can decide who to lend to or not lend to. I, personally, like to invest in lendee’s who are going to make good responsible decisions with the capital. The risk of default is brought on by the lender and therefore that information would aid on our decision to allocate money towards, what we may perceive, as higher risk investments or towards the types of lendee’s that we prefer, individually. I also believe that if the person didn’t take the time to fill out those fields then they probably don’t need my money. Please consider bringing these fields back.

  • eyeRollz

    John, I totally agree. Part of what I looked at when deciding to invest in a certain note was the expense/income breakouts and the person’s story. Being able to ask questions was something I liked too. This feels less like peer-to-peer lending and more like taking a chance in the stock market. I really liked the personal feel and connection that I made to a borrower. Also seeing the list of all the investors was fun too. It made you feel like part of a community. This is feeling too institutionalized.

  • Damien

    Same. I was about to invest a lot, but clearly Prosper took a wrong turn. Their only goal is to increase the number of loans, disregarding the increasing risk for the investors. There is NO WAY someone who is not able or willing to explain clearly why he needs money isn’t highly risky. Only pawn shops do not ask for a clear description of the loan, and this is because they have a collateral. We don’t. As many other lenders, I stopped investing, and I am withdrawing slowly from Prosper. I originally left Lending Club for Prosper solely because of these “loan descriptions”, despite otherwise less attractive loans and features. I am now going back to LC: if I’m not going to get a loan description, I figured I’d at least go to a place where I can see hundreds of loans a day, with a lot higher interest rates. ( if I have to play the number games, I prefer to go for 25% interest rate, plan a 50% loss and expect 10 to 13%, than go blindly in Prosper for under 10% a loan and pray that they don’t default. Not only there is no information on the loans, but there are few numbers, very few loans, and almost NO loan with higher interest.

    N.B: Over the past year, my prosper loans with a description proved to be flawless, not one late payment. I got MANY late payment from a couple loans that didn’t include the description but that I took anyways because they were rated higher (“A ” rating, while others were low ratings). Another proof that loan description works.

  • Damien

    lol. Credit data, more important? I am a lender with both Prosper and LC. I also invest in real estate (hard money lending), and total over $300,000 of cash investment that I can put on the table anytime, quite quickly. I tried to do a Prosper loan for $2,000, just to experience the other side, and was planning to pay it back within a couple of months… and my application was rejected: not good enough credit, according to Prosper, who redirected me to places I would be ashamed to name. ( by the way, I have no debt, never had a late payment, never will. Which, in Europe, would be considered very responsible and safe.)
    The credit rating in the USA is a big joke, outdated and irrelevant, that nobody controls. I don’t trust it for myself and won’t trust it for others either.
    How can you trust a credit rating that increases the more you get into debt, that goes down when you close a credit card, and that refuses to go higher if you are not making sure that you get all kind of imaginable credit, over a looong period of time… and on top of that, a credit rating that you can’t even know without paying. What a joke. This country has many jokes but the credit rating is one of the best.

  • Supermex

    Well since they refuse to bring back the field I have started pulling my money. I am leaning towards teaching them a lesson, I retire next year and will live overseas. I am past the point of needing credit as I have cash to buy what I want, once the individuals investor gets out I’ll take the max loan out with a title that says “kiss it good bye I’m not paying it back” since they auto loan based on credit and my score is around 800, I’ll get funded a buy a new jet ski and boat motor. Hum what an idea, if enough people do this they will go under…..

  • ocean-cruise

    I picked which borrowers to lend to based on the loan description. I skipped the ones that don’t have this filled out. I don’t understand why Prosper would remove the field because some borrowers didn’t like it – they don’t have to fill it out, then. Let other borrowers fill it out. As far as I’m concerned, as a lender, if you don’t want to fill out the field, you’re not going to borrow my money. If it’s too intrusive, either don’t fill it out or don’t ask for a loan. As others have pointed out, other lenders happily loan their money to those without the loan description. That’s fine. Why can’t Prosper simply provide for both needs? Make the loan description field optional. Problem fixed.

  • W. A. Floyd

    I agree with the other investors here. I would not invest my money with any borrower who could not make a clear explanation for why they needed the money and how they planned to use it and pay it back. A good description at least showed that the borrower had thought the process through. I would read every description, and so would notice those who had simply copied what others wrote; those I would avoid, since their lack of original effort made me think this laziness was likely a behavior pattern that might also indicate a lack of diligence with loan repayment. I would always avoid loans where the borrower would not fill out the description. If they do not value me enough to give me some useful information, then I do not feel convinced that they would make a serious effort to repay.

  • Remos

    The borrower who does not bother explaining the reason for money is red flag. Now, we have no idea on what money are spent

  • Stanley Ginn

    Please do restore the Loan Description and Loan Details Field. As lenders to a stranger, these information are vital and the only tools we have to go by rather to make the loan or not. More details about the borrower is always better for lenders. After all if they go to a bank for loans, look at all the paper work they have to fill out. If a borrower is that secretive about his/her background then they should not apply for these easier to get loans than anywhere else. As you are making decisions on this matter, do considered the lenders as much as the borrowers. After all it’s our money being given to a stranger and all we have to go by to give that money to them, at the present, is very scant information.

posted in Featured,Lenders 77 comments »

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