zcommodore

I got the following message today from Prosper:

Dear [zcommodore],

Happy anniversary and congratulations on your 1st year with Prosper!

Thank you for being a valued member of our community and for helping to make consumer lending more financially and socially rewarding for everyone. If Prosper has been helpful to you, please send us your story at stories@prosper.com and we'll include it on our success stories page.

We trust you've enjoyed a rewarding relationship with Prosper and look forward to helping you get the great rates you deserve for years to come.

Best regards,
Your friends at Prosper

P.S. If you have family or friends who also want to take advantage of our great rates, refer them now and earn money if they borrow or lend!

They asked for my story but I don't think they'd really be interested in it so I thought I'd publish it here.

I first found out about Prosper from reading this article by my favorite financial columnist.  I saw the interest rates being offered and was immediately interested.  (How many times have I seen that since then?)

I started with 5 loans in the month of August, 4 of them are current and the one that is late made 9 on-time payments before going AWOL.  The first of those 5 went late a few times but has been on-time since late February.

The last time all my loans were "Current" was in early January--somewhere around January 9th.  The first of my 4+ month lates first went late then and I haven't seen a payment since then and I don't expect to.  The borrower made only one payment but is a homeowner so maybe when it is sold, I will get a little more on the default sale.

I've made a total of 24 loans, one is paid and seven are in some stage of late.  Three loans haven't even had a payment due so in reality, more than one-third of my loans look like they may be going bad.  I still have hope for a few of them to come current though so all may not be lost on them yet.

I started a group a few weeks after I joined Prosper but I didn't really do much with it until late October.  The first loan in my group originated Nov. 6th and by the end of the year I had helped 5 HR borrowers get funded.  My philosophy was that I could sift and sort through the lower credit grades and find a few diamonds in the rough and that by believing in them, there would be extra incentive for them to stay current due to the peer pressure aspect that Prosper advertises so much.

What I didn't fully understand or consider was that peer pressure only works if there is money to pay and a desire to do so.  The last time all the loans in my group were "Current" was around May 8th.  Since that time my group has had between 1 and 4 loans in some stage of lateness.  My group lost it's first stars on June 5th and was reduced to a 1-star group on August 6th.

The problems the borrowers in my group are varied.  One borrower just decided he didn't want to pay his loan.  One borrower is just in way over his head with financial problems.  And two borrowers are going through divorce.

I have hope that at least a few of the lates in my group will get straightened out.  The prospects don't look great but I've been communicating with the late borrowers in my group off and on since they initially went late.  I have a desire to get back to having a 5-star group but if it ever happens, Prosper will probably have changed the ranking system a time or two by then so who knows how it would rank.

When I found Prosper, as I said earlier, I was attracted by the high interest rates.  I've learned that those rates are made of a lot of fools-gold.  I haven't given up on Prosper yet.  I keep trying to convince myself that I will do better the next time.  We'll see though.