Spending time reading the forums, one gets a lot of insight into minds of the lenders who participate. Though I don't bid on every lender, several have impressed my enough that I increased my investment in Prosper when they applied for loans.
Several of these lenders posted listings late in 2007. I bid on these and missed out on some that I wish now I would have bid on. Some paid off early and some are making extra payments, but they're all paying! Since then, I've kept my eyes open for listings like these and have picked up several more. I've become so convinced that these are the safest loans on Prosper, I recently made my largest bid ever on this listing by moremoneymark.
I've set up a spreadsheet to track the performance of these loans, which include several well-respected group leaders on Prosper as well as Prosper's blog editor, Rateladder.
Here's the spreadsheet detailing the performance of this portfolio so far:
Click to view larger image.
Though the rates are lower than many lenders shoot for on Prosper, if these truly are as safe as I believe they are, the return on these loans will still be greater than the ROI of the average Prosper lender.
I've decided to use these loans as a hedge against my regular Prosper portfolio. When similar listings appear, I'll move substantially more than my planned monthly investment into Prosper as I did on moremoneymarK's loan this month. These (practically risk-free) loans should help create a buffer to offset the inevitable lates/defaults in my regular portfolio. As these larger loans repay, I'll take the additional principal that I hadn't planned on investing in Prosper and return it to my moneymarket account and await the next forum lender's listing.
I'll post an update on this portfolio's performance every month or so and as long as it beats average rates and I accurately judge the ability and willingness to repay of these lender/borrowers, I'll continue to implement this plan. In my opinion, this is one facet of the Prosper community that can benefit us all.
Categories:
, Advice for New Lenders, Community, Low Risk Loans, Prosper Forums, Prosper.com, ROI, lending strategy
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