My Prosper Group is proud to present our 3rd listing (2nd endorsed listing)… This listing is attempting to put the social in social capital.
The Penny Saved has been a known blogroll buddy of RateLadder for sometime. He asked me about this loan strategy about 2 months ago. This is a calculated decision [...]

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Continue reading → Programmer and Blogger Seeks Credit Score Improvment Loan

After much research I have joined a Prosper.com group! I selected Research Triangle Park which is located in North Carolina. Why? Well, it’s not super common knowledge yet, but we are going to be moving to North Carolina from Arizona within the next two to six months for a job transfer (if anyone is hiring [...]

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Continue reading → Joined A Group!

Any regular reader will know that last week I brought my first group listing to the marketplace. (As an aside, a group leader is no longer paid for successful listings and the haven’t been since September 13, 2007: Email To Group Leaders After Recent Changes. I think this was a good change and said [...]SHARETHIS.addEntry({ title: “Blogger Obtains Loan Using Social Capital”, url: “http://www.rateladder.com/2008/05/02/blogger-obtains-loan-using-social-capital/” });

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Continue reading → Blogger Obtains Loan Using Social Capital

Back in January we told you how Travler505 had brought it to Prosper’s attention that Prosper was not operating according to the lender and group leader agreements (Prosper Honors Agreements And Pays Interest)…
Yesterday, they finished the work and released the last of the refunds: Completion of Refunds to Lenders and Group Leaders.
The release of funds [...]SHARETHIS.addEntry({ title: “Prosper Corrects Mistake With Refunds to Lenders and Group Leaders”, url: “http://www.rateladder.com/2008/03/28/prosper-corrects-mistake-with-refunds-to-lenders-and-group-leaders/” });

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Continue reading → Prosper Corrects Mistake With Refunds to Lenders and Group Leaders

There are support programs for everything in life. They are there for a reason, and the reason is that it is much easier to accomplish something when somebody is there with you who has gone through it, understands what you are going through and wants to you to pull through it and win.
In sports, [...]

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Continue reading → The Money Marathon – Support Will Carry You Through

In my recent post about financial advice from friends and family, I discussed how those around you are the most likely sources of your financial advice. These people are also the ones who will influence your spending and savings habits.
This happens because your friends are usually your basis for defining what is “normal.” Seeing the [...]

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Continue reading → The Basis for Your Financial Habits

After my initial reaction to Prosper removing group rewards, I spent some time understanding the (near) collective wisdom that group rewards needed to go. I’ve hit acceptance. The positive group leaders could not overcome the market-distorting effects …

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Continue reading → Revisiting Group Rewards

On a thread in the forum it was revealed for the first time that I am aware of that the earliest pre launch special invite group leaders were compensated with stock (see here). 
I used ProProsper to identify these groups.  I am unsure of the exact cutoff date so I am publishing all groups started [...]

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Continue reading → Original Pre-Launch Group Leaders Compensated with Stock

zcommodore has been monitoring the number of group loans funded vs non-group loans funded in response to Prosper’s change in group rewards. A few weeks ago he noted that the ratio was swinging to non-groups:

Back in May/June when I first started check…

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Continue reading → Loans From Groups Declining

In an e-mail to group leaders (see RateLadder and Prosper Lending Review), Prosper announced their intention to discontinue all group leader rewards and move to a referral-only reward structure. The prevailing attitude on the lender side can be summed …

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Continue reading → Group Rewards And Unintended Consequences

As reported earlier yesterday afternoon, we are thrilled to announce that Norwest Venture Partners and Canaan Partners invested in the Company as part of a total $10.26MM investment round. Jeff Crowe from NVP and Dan Ciporin from Canaan Partners are joining the Company’s board of directors.
We launched the company as part of the Facebook [...]

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Continue reading → Welcome NVP and Canaan Partners

$25 Bonus For New Lenders
How to Use Prosper Listing Widget for MySpace, Blog, Website, or Other

When I wrote the post yesterday I didn’t have funds available for bidding. I rectified that using the the rapid transfer feature. I have now placed bids of $71.87 @ 23% and $50.00 @ 19.94%.

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Continue reading → Update: Everyday People — Shining Example of Prosper Group

Here is a current listing from EveryDay People. This listing has an excellent chance of funding. In addition, Everyday People’s Group Leader StaciM has also endorsed AND BID on the listing. (Personally I think an endorsement without a bid is meaningless… kudos StaciM). The reason StaciM can bid with confidence is [...]

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Continue reading → Everyday People — Shining Example of Prosper Group

Yes

(based on my last post, one can tell I am not a fan of Groups on Prosper)

How should I describe the group failure at Prosper.com ? Poorly Executed? Unequivocal? Colossal?

I view the failure of groups as they stand only on my observation. But luckily there are some much smarter and more educated than me that are in the process of researching the structure of groups.

I cannot wait to see the final results, but here are a couple of blog posts by a researcher, sanjeev, who has discussed his initial research. Enjoy!

Group Reputation System at Prosper.com

Group Reputation System at Prosper.com - II

sanjeev’s blog

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Continue reading → Has the Prosper.com Group System Failed Borrowers and Lenders?

What are Groups on Prosper.com ?

Prosper says:

“The foundation of Prosper is based on groups of borrowers who share a common interest. A group can be large or small, based on a a community organization or nationality or even a common interest, like muscle cars or knitting. Groups can be religious, ethnic, educational… the options are as varied as the members who form them.” (link)

But what happened to the groups on Prosper.com?

Just checking quickly before writing this, I went over to the group tab on Prosper.com, and selected the link “View All Groups” (link) Here is a list of groups on that list with 5 or more active listings, which is 17 groups (could be different whenever this is viewed, but the results should be similar).

50% - 2 MILIONAIRES here for you. Fees shared. Marcel’s Group
50% - FUTURE FINANCIAL FREEDOM
75% - SMALL BUSINESS & SELF EMPLOYED
00% - No Bull Investors - We Invest In Good Borrowers (NO FEES)
75% - Large Money Loans for AA,A,B,C & D Credits
00% - IT Professionals
25% - Lend2’s Group
50% - Pay Day Loan Terminators
25% - Government Employees
50% - Life Changing Loans
00% - DIVORCED AND GETTING OUT OF DEBT !!!
00% - Rich Uncle
25% - Rock Solid Venture Capital
75% - All In The Family
00% - High Risks that should not be
25% - King Financial Group///100% Cash Flow Solutions For YOU
00% - We the People

Four of them appear to have any common interests that unite the members of that group:

SMALL BUSINESS & SELF EMPLOYED
IT Professionals
Government Employees
DIVORCED AND GETTING OUT OF DEBT !!!

So what in the heck are the rest of these groups doing? It’s quite simple. They are making money off of either Prosper.com, you the borrower, or both.

First, Group Leaders make money from Prosper when any borrower of their group gets a loan on Prosper. They want you to get your loan so that they get paid. This is called a “Match Reward”.

Next, Group Leaders can make money by charging YOU extra interest on top of your loan, just for the privilege of being in their group.

Notice the %’s in front of each group name. This is the percentage of the MAXIMUM amount of interest they can charge you. So, if the max interest is 2%, and they charge 50% of that, then you will wind up paying them an extra 1% (2 x 50% = 1%).

Slightly different than the Match Reward, this fee is paid by you, throughout the life of the loan. As long as you get can get a loan and pay them. This is officially called a “Payment Reward”, but also at times referred to a “Group Fee”. More incentive for them to have you get your loan funded. (how groups make money on prosper)

Notice some of the groups have 00% group rewards. These groups will not charge you an extra fee on top of your loan.

Group Slutting on Prosper.com

Looking back to the top of the page at how Prosper defined groups, then at the 17 group sample for this example, 13 of the 17 top ranked groups on Prosper:

- Have no interest in forming a group of people with similar interests or personal connections

- Have a monetary interest in seeing you get a loan

- Will likely be charging you a fee, which will increase your interest rate (compared to the rate you might pay as not being a member of a group)

- Are most likely at Prosper to make money for very little effort by being a “successful” Group Leader

Here is an example of borrowers paying higher rates for having the privilege of joining a “money-grubbing” group: (link - scroll down to the “Historical Group Rates” table and compare group %’s vs. marketplace 5’s)

What should the prudent borrower do?

Stay away from groups! Make a loan listing without a group, set an honest rate based on your credit (link - table does not include “Group Fees”) , and perhaps join the Prosper Discussion Forum’s for free advice from the community (link)

If you are having a tough time getting your listing funded without a group, then it may be time to join one. Just stay away from the groups that charge you fees for no reason!

(The group system on Prosper.com is a topic of great interest to me. I am not a group leader on Prosper, and If you couldn’t tell already, am greatly saddened by the evolution of groups on Prosper, and the way borrowers are needlessly taken advantage of (i.e. Group Fees) through this system. I hope to have more posts to help borrowers navigate the site, present listings, and get funded. Stay tuned!)

For more on the failure of the Prosper.com group model, go here: (link)

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• Fraternal Groups Historical Memorabilia Collectibles

Continue reading → Think Twice Before Joining a Group on Prosper.com

Greetings everyone. Welcome to SeattleEditor’s new Prosper blog. This blog is meant as an informative resource for both borrowers and lenders on Prosper.com. Primarily this blog details my own experience as a Prosper borrower/lender and what I’ve learn…

Continue reading → Welcome!

Basic Group FactsThe 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 …

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Continue reading → Joining a Group