Posts Tagged ‘ peer-to-peer lending ’

Welcome to Prosper – the marketplace for loans —America’s only true auction- based peer-to-peer lending company. We are in a constant pursuit to ensure you can invest on the world’s most transparent and durable personal loans trading platform. Prosper delivers competitive rates of return ranging from 7.18% for AA listings to 4.59% for E Prosper Rating listings, based on return on investment for all loans as of 6/30/2009. These are healthy returns that confirm peer-to-peer lending is a viable alternative asset class in which to invest.

Individual Listings: increased layers of safety

Those of you who are returning lenders will be familiar with our bidding system on Direct Peer-to-Peer loans.

New borrowers are now required to meet the new minimum credit score requirement of 640.  They can request up to $25,000 for a three-year fixed rate loan.

Lenders can now start their bidding with $25.00 (previously $50.00) which will make it easier to create a diversified portfolio. 

Prosper has also improved its risk rating system with the introduction of a new proprietary system called Prosper Ratings ranging from AA – HR.  Each Rating represents a loss rate range. Prosper Ratings are based on historical loan performance data and are designed to better convey risk. The Prosper Rating letter grade will now be shown in the listing along with an estimated loss rate, and a narrower credit score range. Credit scores shown will be in 20 point ranges (previously 40). Click here to learn more about Prosper Ratings

You can search listings by either Prosper Rating or specific keywords. You then bid on listings of your choice—offering a great rate for both you and borrowers. Portfolio plans are also available.

Fine-Tuned Bidding for Lenders

Prosper has enhanced its auction model to include a hard bid floor for each listing. This helps our Lenders identify the absolute minimum they can bid. This is an absolute minimum: Lenders should always price for risk in order to achieve an adequate return. Remember the higher the risk, the higher your bid should be.

No matter which listings you choose to bid upon—or whether you’re a lender or borrower—you remain in control of your bid at all times. Learn more about the bid rate floor

Lenders will now be bidding on yield. The minimum bid rate is now net of the 1% servicing fee. Previously, if you bid 18% and were a winning bidder on a loan, you would receive interest at 18% and after paying a 1% servicing fee, your return on the loan would be 17%. Now, your equivalent bid would be 17%, which we call bid yield. Learn more about bidding on yield

Trade Existing Notes

With Prosper’s new Trading Platform, you can now put your Notes up for sale on our Note Trader by Folio Investing for quick and easy trades. You will be able to browse and purchase Notes there, too.

The Trading Platform will give Prosper lenders the ability to sell a Note if they need access to the funds before the full loan is paid off. It will also give Prosper lenders more investing options by giving them an opportunity to bid on loans they missed out on when the loans were first listed, or to invest in loans with durations that meet their specific investing objectives.

All loans made after July 13, 2009 are eligible to be placed on the Note Trader platform.

Prosper—Ushering in a New Financial Era

As we’ve seen, the old ways of investing and banking are broken.

Prosper offers you a different—and better—way to get competitive rates. We provide a financially and socially rewarding way to invest in our nation with unparalleled openness and transparency.

We’re firmly committed to the idea of Americans helping Americans and driving our country’s economy. Why not join us and become a financial hero today?

Finally… the moment we and so many supportive and loyal Prosper community members have been waiting for…

after nine long months of navigating the rapidly changing regulatory landscape, we are thrilled to announce that Prosper’s registration statement with the SEC has been declared effective. Continue reading Prosper is Back! (We mean it this time)

Wow, half the banks we knew and trusted last week are gone. This one bought that one, that one closed, the others merged and rest are waiting for a bailout that may never come.

“Don’t look now but there’s something funny going on over there at the bank George. I’ve really never seen one but that’s got all the earmarks of being a run.”

I think I’ve waited all my life to quote Ernie the Cab driver from It’s a Wonderful Life…I think it was worth it, don’t you?

A run on the bank…it sounds scary because well, it is. When the place we go to for money closes its doors, where does that leave us? Where do we put our money? Where do we borrow money? Recently, the headlines have been screaming it and I know it’s on all our lips…is this the next, new Great Depression? George Bailey where are you now?

I think I know but bare with me…I’ll get there.

I work in marketing and a few years back I was involved in the re-branding of this insurance company. We hired an outside firm to “re-think” what the brand meant to us and to our customers. We sat in a room for hours, listening to a ponytail-clad executive telling us how to “re-feel” the customer experience. But one thing stuck. After striking his best Abercrombie & Fitch pose, ponytail–boy asked, “If your company was a person, who would that person be?” And that’s how I know where George Bailey is today. Told you I’d get there.

Here it is. George Bailey is us…people and Prosper. If you don’t know what I’m talking about you can check it out at Prosper.com. It’s people helping people. Those who have – help make loans. Those who need - borrow. Pretty simple stuff; pretty amazing stuff.

Prosper harkens back to a time when helping individuals was part of what a community was all about. The old Savings & Loan concept is alive and well. People looking for loans from $1,000 to $25,000 can go to Prosper and appeal to the George Bailey in all of us as people bid on the amount and interest rate of the loan. Just people helping people…and all without a bank. As our “real life” run on the banks continues, Prosper and its members may be among the last, safe places to get a loan.

So, as banks fold and our faith in financial institutions fade, it’s nice to know there’s still a little bit of Bedford Falls out there. Like their slogan says, “Let’s bank on each other.” And, don’t worry. Like in the movies, things seem to work out in the end.

—

Steve McDonald is a freelance writer and Prosper member since October 2007.

As you may have read, Citigroup recently agreed to purchase Wachovia’s banking operations for about $2.1 billion in a deal brokered by federal regulators. Wachovia’s troubles are similar to those of Washington Mutual, whose assets were seized by the Federal Deposit Insurance Corporation last week and sold to JPMorgan Chase. Wachovia sold thousands of adjustable rate mortgages that offered low introductory and deferred interest payments. The delinquencies and defaults on these types of mortgages have been increasing, resulting in huge losses for banks.

Wachovia is the latest casualty in the banking industry. The Citigroup acquisition will now reduce the number of major national banks, leaving only Citicorp, Bank of America, JPMorgan Chase, and Wells Fargo.

Financial institutions have tightened credit guidelines and restricted credit to the regular guy so severely that it’s all but impossible to get a personal loan in many states. What are regular people like you and me to do? It’s frightening. Most of us are fortunate enough to still have a job and a home, and are able to go to a restaurant or sporting event once in a while. But you may know of someone who has recently fallen on harder times, even though they have a good credit history. Where can they go for relief?

They can come to Prosper. Why not tell someone you know about Prosper – help your neighbor out. Perhaps they have not heard of person-to person lending. What’s more, if someone you refer gets a loan successfully through Prosper and makes their first payment, you can even get a $50 reward.

And why not tell your friends about helping others out through Prosper – suggest they become a lender.  It can be a rewarding experience.

Saving as much you can is important, but it is equally important to reach out to help others in need.

Our global financial system is in the grips of a full blown crash – clearly now the worst since the Great Depression. Just when we think things are stabilizing, a new shock dwarfs all that came before. It’s safe now to say that the old normal will likely never return. This wasn’t caused by just greed; this was a fundamentally flawed system that turned out to be incredibly fragile.

Where will it end and what will emerge when the crisis finally lifts? I believe we will have a much simpler system that will necessarily be a much smaller part of what society thinks about. Banking will take back its role from Wall Street allowing it to focus on its core mission once again. Borrowers and lenders will become much closer. Lending will be thought of as lending not investing. And the middlemen who made credit decisions but took no credit risk will be gone. Without competition from Wall Street, banks will get much stronger.

So what role will Prosper and P2P lending play? Plenty. With Wall Street’s moral hazard lending out of the equation, both banks and ordinary people will reap more rewarding opportunities to lend.

Banks will become much more cautious – as the lessons of the 2008 crash will cause them and their regulators to put a premium on classic conservative underwriting. There will be more pressure on banks to do well, less on “doing good”. Bank lending will be restrictive and uninteresting. Deposit rates will also drop as banks find less competition from aggressive newcomers.

People will use P2P lending to bridge many of the gaps in the new lending and deposit landscape and to provide competitive pressure to newly powerful banks. People’s sense of “doing well by doing good” will become more important than ever to ensure that tomorrow’s entrepreneurs, students, and homeowners aren’t paying the price for today’s market calamity.