Matt — P2P No Bank

CNN recommends P2P lending

October 9th, 2008 — from Matt @ Prosper Lending Review

I was just watching the evening news on CNN. Anderson Cooper was discussing the market with a few guests. The stock market is down nearly 40% on the year. He read a question from a viewer who asked if there was anything for someone to make money in …

Commentary on current market rates

January 29th, 2008 — interest rate from Matt @ Prosper Lending Review

There have been some remarkable changes happening recently in the economy. Most interesting for me has been to watch what is happening to interest rates in the bond market. Consider it in these terms:Let’s say that you are a lender looking for a place …

Virgin Group Announces new US Peer to Peer lending site

October 15th, 2007 — CircleLending, Richard Branson, Virgin Group, peer to peer lending from Matt @ Prosper Lending Review

In May Virgin Group purchased a majority stake in CircleLending. Today they have announced they are using that as a platform for a new US peer to peer lending site. Virgin Group is a $20 billion dollar company, and is run by well known billionaire Ri…

Prosper Announces New Upcoming Lender Features at Finovate Conference

October 5th, 2007 — FINOVATE, Lending Club, Prosper from Matt @ Prosper Lending Review

Prosper announced some new upcoming features at the Finovate conference this week. Included in the changes are a more transparent risk estimator when placing a bid. Currently Prosper shows Experian default rates to estimate the risk. Now they have e…

Prosper Announces Second Annual Prosper Days Conference

October 5th, 2007 — Prosper, Prosper Day's from Matt @ Prosper Lending Review

Prosper has announced it’s second annual Prosper Day’s conference, and is now taking reservations. Prosper Days is a one and a half day conference that brings together active lenders, group leaders, and borrowers for networking and education on how Pr…

Prosper hires new Vice President of Operations to Improve Collections

October 2nd, 2007 — Prosper, collections from Matt @ Prosper Lending Review

One of Prosper’s greatest challenges has been handling collections from loans that go late. After a loan is more than 30 days late Prosper turns the loan over to a collections agency, but lenders have a had ongoing complaints about how this collection…

Prosper T-Shirts for Referring Lenders

September 27th, 2007 — Prosper, Referral, t-shirt from Matt @ Prosper Lending Review

Several months ago Prosper introduced a referral program. Under that program Prosper members can receive $25 dollars for referring a lender, and up to $125 for referring a borrower. I referred my brother and my wife, both of whom became lenders and f…

Prosper Eliminates Group Leader Rewards

September 5th, 2007 — P2P Lending from Matt @ Prosper Lending Review

Prosper announced today a major change to their group structure. Here is the text of Prosper’s announcement: “At Prosper, we have been listening to your feedback regarding groups and group leader rewards.The original philosophy behind Prosper Groups w…

Prosper’s Product Manager seeks loan on Prosper

September 5th, 2007 — Prosper, prosper andrew from Matt @ Prosper Lending Review

Prosper’s Product Manager, known as Prosper Andrew on the Prosper forums is seeking a $10,000 loan on Prosper to replace a leaky patio. His listing is attracting a lot of interest in the Prosper forums. The loan was quickly funded, and has been bid d…

Prosper referral program extended

August 31st, 2007 — Prosper, Referral from Matt @ Prosper Lending Review

Prosper announced today that it is extending its referral program through December 31, 2007. To date 13,000 new Prosper members have signed up through the referral program. Full details on the referral program can be found at Prosper’s Referral Progra…

309 late loans sold in Prosper debt sale

August 29th, 2007 — Prosper, debt sale, default, homeowner from Matt @ Prosper Lending Review

Over the past week Prosper conducted their third debt sale. Prosper’s policy is to default loans and sell them once they are more than 3 months late. However, in order to conduct a debt sale they need to pool a significant number of loans together to…

Prosper beats the S&P 500 (on AA loans with no delinquencies)

August 23rd, 2007 — Prosper from Matt @ Prosper Lending Review

Prosper sent out an email campaign to all Prosper members with the following news:”Did you know that the average loan on Prosper is outperforming the 2-year return on the S&P 500? Smart lenders like you have already discovered that lending on Prosper i…

Credit scores on Prosper and how to get a free credit report: Part 2 of 2

August 15th, 2007 — Equifax, Experian, TransUnion, credit, credit scores, free credit report from Matt @ Prosper Lending Review

In Part 1 of this article, I discussed the distribution of credit scores, how credit scores are used on Prosper, and the distribution of borrowers on Prosper. In this article I will describe how you can obtain a free credit report, disputing a claim, a…

Credit Scores on Prosper - Part 1 of 2

August 3rd, 2007 — Equifax, Experian, FICO, Lending Club, Prosper, ScoreX, TransUnion, credit, credit scores, sub-prime from Matt @ Prosper Lending Review

Credit scores are the most important indicator in determining what rate you will pay when you borrow money. The worse your credit score is, the more you will have to pay in interest on your loan. Your credit score is made up of a number of components …

How does Prosper compare to other investments?

August 1st, 2007 — Prosper, Retirement, fees, interest rate, liquidity, taxes from Matt @ Prosper Lending Review

There are many different ways to measure an investment. We might ask questions like: What is the potential return? What is the risk? What about liquidity? What fees are involved? What are the tax consequences for the investment returns? Are there t…

Are non-homeowners a safer lending risk in a declining house market?

July 31st, 2007 — Prosper, homeowner, lending strategy, real estate from Matt @ Prosper Lending Review

With all the recent troubles in the housing market, some lenders are starting to ask whether homeowners are a higher risk than non-homeowners when lending on Prosper. In the housing market the biggest problem homeowners are facing is when ARM or adjus…

Borrowing money to lend on Prosper: Wise or Foolish?

July 25th, 2007 — Prosper, lending strategy from Matt @ Prosper Lending Review

Frequently you will see listings on Prosper where someone is taking out a loan for the purpose of reinvesting the money back into Prosper at a higher interest rate. The idea is that you borrow money at a low interest rate and then reinvest it at a high…

How does Prosper make money?

July 23rd, 2007 — Prosper from Matt @ Prosper Lending Review

After understanding the concept behind Prosper and peer-to-peer lending, one of the questions people often have is: how does Prosper make money? This is a very legitimate question. After all, if Prosper doesn’t make money then it is a flawed business…

Fed Chief estimates subprime fallout at $100,000,000,000

July 19th, 2007 — high risk, sub-prime from Matt @ Prosper Lending Review

In comments to congress today, Federal Reserve chief Ben Bernanke said that the subprime fallout could result in as much as $100,000,000,000.00 in losses for lenders. That is a lot of zeros. During the hearing, Ben Bernake said that the “Federal Rese…

Update on Prosper’s referral program

July 16th, 2007 — Prosper, Referral, affiliate from Matt @ Prosper Lending Review

Earlier we wrote a post about Prosper’s referral program. It has been more than a month since the launch of this program.To test this program I referred my wife to Prosper. She opened an account, transferred in $50, and funded a loan. Immediately af…

Build your own fantasy Prosper loan portfolio

July 11th, 2007 — Prosper, fantasy prosper, gavin, prosper tools from Matt @ Prosper Lending Review

So, you want to lend at Prosper, and you think you can beat the market averages, but you aren’t ready to invest real money into Prosper? Well, you are in luck. Gavin Tools has created Fantasy portfolio tools that allow you to pretend to loan money at…

Most Prosper lenders do not diversify their portfolio

July 9th, 2007 — Prosper, diversification, lending strategy from Matt @ Prosper Lending Review

Diversifying your Propser loans allows you to lower the overall impact on your portfolio if one or more of your loans go into default. With 20 loans of equal amount you would have 5% invested in each loan. That means if one of your loans defaults you…

An analysis of pre-payment risk on Prosper loans

July 5th, 2007 — Prosper, pre-payment, risk management from Matt @ Prosper Lending Review

There are many risks associated with lending money at Prosper. The primary risk is that loans will default or will have some late payments. The risk with a default is that the loan is sold off for pennies on the dollar, so most of the money invested is…

Are all Prosper loans within a credit grade created equal?

July 4th, 2007 — Prosper, interest rate, lending strategy from Matt @ Prosper Lending Review

The easiest way to categorize risk is by credit grade. At Prosper you can search and filter loans by credit grade. Many lenders, including me, pay particular attention to higher credit grades while excluding the lowest credit grades completely.Today we…

What effect would a recession have on the Prosper marketplace?

June 28th, 2007 — Prosper, default rate, real estate, recession from Matt @ Prosper Lending Review

In the financial news you can find a story almost every day about the weakness in real estate markets, rising foreclosure rates, and increases in the number of bankruptcy filings. Some economists worry about the effects spreading across the broader eco…

Do Prosper lenders discriminate?

June 26th, 2007 — Prosper, borrow, loan discrimination, military loan from Matt @ Prosper Lending Review

When you sign up as a lender you are required to agree to a Lender Registration Agreement. Among other things, you agree to not discriminate against borrowers based on race, color, religion, national origin, sex, marital status, age, sexual orientation…

A Prosper scam: The story of Jessica Wolcott

June 25th, 2007 — Prosper, prosper scam from Matt @ Prosper Lending Review

Jessica Michelle Wolcott is a girl in her early 20’s who goes by the username of JessM on Prosper. She applied for a loan 6 times on Prosper, but was never funded because she has HR credit and lives in a state where the interest rate is capped at 15.7…

Prosper: A hands-on education in risk management

June 20th, 2007 — Prosper, Statistics, diversification, risk adjusted return, risk management from Matt @ Prosper Lending Review

For some new lenders on Prosper it is a hands-on education in Risk Management. There are several different ways to learn about managing risk. Most colleges have economic courses on risk management, and there have been lots of books written about the to…

Why would a borrower use Prosper instead of a traditional bank?

June 19th, 2007 — Prosper, borrow, interest rate, loan from Matt @ Prosper Lending Review

The following question that a reader left on Tom’s OmniNerd article inspired me to write this post.What makes me curious is this: why don’t the A or AA folks just borrow from a bank? The rates seem high compared to banks’. My perspective is that of som…

Prosper lending - How to avoid bankruptcies

June 18th, 2007 — Prosper, bankruptcy, lending strategy from Matt @ Prosper Lending Review

When lending money to someone on Prosper the worst case scenario is to have someone go bankrupt. At least with other types of defaults you will see a small amount of money returned when the loan is sold to debt collectors. This post is on how to spot a…

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