Basic Group Facts
The first thing that Prosper.com generally recommends is finding a Group to join. Groups are collections of people with common interests, backgrounds or purpose that band together in an effort to acquire better interest rates on loans or better returns on lending. Each Group has a Group Leader (GL) that approves membership to the Group based on their own criteria, help out new members, give advice to borrowers and lenders, etc.
Groups have something called "group rewards" which detail how much lenders can collect from the interest on loans placed under that group. The information on group rewards is complicated - for a full breakdown, I'd recommend visiting Prosper's Group Rewards page.
The most important aspect to think of in terms of group rewards, however, is this: A 100% shared rewards Group, for example, mean that lenders get ALL the interest on a loan they bid on - minus Prosper.com fees (which are decently low). A 50% "shared rewards" group, on the other hand, means that part of the interest on a loan goes directly to the GL. So in order for lenders to get the benefit of the same interest rate - someone in a non-100% shared rewards Group will have to list their loan request at a higher interest rate than they would if they were in a 100% shared group.
So why would you join a Group that doesn't have 100% shared rewards if it means that you can't get the lowest interest rate possible and still have a chance of getting your loan funded by lenders looking for a good investment return? The only reason I can determine is that if you join a Group with a GL who is truly dedicated to helping its members - it may be worth it. A GL who works hard to bring in lenders to the group, carefully selects lower risk borrowers to join the group, and gives advice on how to borrow & lend may very well "earn" their percentage of the rewards. A Group Leader that does none of these things, however, is just a warm body who is eating money that you are paying as a borrower - and lenders are losing out on.
Choosing a Group
When I went to select a Group, I naturally looked first for Groups that shared a common interest with my own. Based on this, I chose to apply to join the Group Our Values.
I contacted the GL through the Group page requesting membership - and specified that I was interested in becoming a lender and perhaps future borrower as well.
The same day I sent the message to the GL, I was approved to join the group, and thus I became SeattleEditor on Prosper.com.
Group in hand, I set out to find out more about becoming a lender...
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