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[Texaswatchdog]

Hi, I'm a new lender on Prosper.  I know what you are going to say. "NO NO, STOP Get out now while you still have a chance."  I'm not loaning money as a way to get rich quick or to get poor quick either. I'm doing it as a part time hobby just for fun. I only put in $1200 and am real careful who I loan money. I don't loan  to anyone less than a "C" credit rating or with any active defaults. I also have additional ways of screening out most of the bad ones.

I looked at a lot of the listings that went 4+ months late or defaulted. Some of them looked like obvious deadbeats and/or scam artist. Is there an active website anywhere that shows off the deadbeats from Prosper?  I found one site called "Wall of sham" but it was no longer up.

-Tex

[ira01]

Hi, I'm a new lender on Prosper.  I know what you are going to say. "NO NO, STOP Get out now while you still have a chance."  I'm not loaning money as a way to get rich quick or to get poor quick either. I'm doing it as a part time hobby just for fun. I only put in $1200 and am real careful who I loan money. I don't loan  to anyone less than a "C" credit rating or with any active defaults. I also have additional ways of screening out most of the bad ones.

If I had a dime for every newbie here who said that, I would be a rich man.  While sticking to C's and above, and no CDQ's is a good start, by no means is that enough to keep you safe.  As just one example (which may or may not apply to you), lots of new lenders seem to think that bidding on high-rate AA and A listings is a good idea.  It isn't.  See http://www.prospers.org/blogs/ira01/2008/08/09/loans_with_very_high_rates_for_their_cre.

I tried to look at your portfolio on Lendingstats to see what you had bid on, but it appears that Texaswatchdog isn't your user name on Prosper.  You'll get much better advice here if you properly identify yourself.

I looked at a lot of the listings that went 4+ months late or defaulted. Some of them looked like obvious deadbeats and/or scam artist.

Yep.  But many others don't become apparent until it is too late.  For example, this asshole was a 0/0/0 B Borrower with a 14% DTI, a story that made sense, and he subjected himself to a grilling here in IRC.  I put a snickers on him, but Bama put $1K on him.  He took the $24K in October 2007, and never bothered to make a single payment. 

Is there an active website anywhere that shows off the deadbeats from Prosper?[/b]  I found one site called "Wall of sham" but it was no longer up.

Not that I'm aware of.  Wall of Sham was an interesting idea.  As a lender, I loved it; as an attorney, I suggested to the operator that it was a lawsuit waiting to happen.  I don't think we ever got the full story of why he took it down, but I imagine he was on the receiving end of a legal nastygram.

[Texaswatchdog]

Thanks for your response. I know there are some risk with Prosper. I'm pretty confident I can come out with at least a 4% return. My name is Texaswatchdog on Prosper. Today was the first day I was able to bid. I won a couple of bids but I guess it is too early for them to turn into loans yet.

This site has a lot of good advice for new lenders. I'm glad I found it. I  posted a few things on Prospers official board. However, it felt strange having to have Big Brother (Prosper) screen all my post before they posted.

-Texaswatchdog

[ira01]

Thanks for your response. I know there are some risk with Prosper. I'm pretty confident I can come out with at least a 4% return.

Well, if history is any guide, you have about a 39% chance -- there are 12,854 "moderately seasoned" lenders (those with >20 loans and >6 month average loan age).  Of those, 4,969 have a projected ROI >4.00%.  The median (half do better, half do worse) ROI of moderately seasoned lenders is 2.51%.  Actually, your chances are somewhat better, because you have a number of advantages that the "old-timers" didn't -- more (but still not enough) credit information, bidding guidance (which is flawed, but certainly better than nothing), a much greater amount of data available, etc., as well as being able to learn from the experiences of those who came before you.  OTOH, the economy (and credit availability) is worse now than two years ago, which will likely have negative repurcussions here. 

However, getting a 4% return on Prosper should be seen as abject failure, considering that you can get 3.31% at E-Trade for a 100% liquid, FDIC-insured savings account.  Given the risks involved in Prosper lending, if one cannot get at least 10% (which most cannot), then Prosper is not useful.  It is, however, sometimes fun in that Vegas kind of way, so if you consider Prosper your entertainment, then you might accept lower returns.  (Over time, you'll probably find Prosper a lot less entertaining, as getting ripped off by miscreants quickly loses its charm).

This site has a lot of good advice for new lenders. I'm glad I found it.

Yes it does.  Read a lot (and then read some more). 

I  posted a few things on Prospers official board. However, it felt strange having to have Big Brother (Prosper) screen all my post before they posted.

Prosper used to have a highly-useful, mostly unmoderated forum.  It pulled the plug on it with no warning last Thanksgiving.  Fortunately, 112233 had archived it a couple weeks before, so the vast majority of it survived (much to Prosper's great dismay -- which included sending a baseless lawyer letter to 112233 in an effort to steal his domain).  You can access it at prosperreport.com (which also has copies of Prosper's lawyer letter and the reply by the Public Citizen attorney who agreed to defend 112233 pro bono). 

[Texaswatchdog]

However, getting a 4% return on Prosper should be seen as abject failure, considering that you can get 3.31% at E-Trade for a 100% liquid, FDIC-insured savings account.

I'm currently obtaining a 6% interest rate on my credit union checking account. However, there is a $25,000 limit at that rate. I also have a savings account with a 3% interest rate. Like I said before, I only have $1200 in my Prosper account. (I think I will send myself back $200) I'm doing this as kind of a psychology and finical experiment. It is just a game for me. I want to see if I can weed out the deadbeats and scammers.

(Over time, you'll probably find Prosper a lot less entertaining, as getting ripped off by miscreants quickly loses its charm).

LOL I guess when I get tired of being scraped over the coals and robbed I can post my horror stories on this site. Misery loves company.

[xraider]

Welcome, Texas!

FWIW, 3 of my 7 lates are C's.  One is an A.  So, more than 1/2 of my lates would fit within your parameters. 

Ira has a great post about those who are willing to pay exhorbitant amounts in interest for their credit grades.  Those present a very, very high risk.  When looking at listings, ask yourself WHY is this person looking for money at Prosper?  Why can't s/he get money much more cheaply through a balance transfer, a credit union or a HELOC? 

You may want to post a few listings you're considering, to see the comments of those who have been burned by borrowers before.  Please don't take any nastiness personally.

[bamalucky]

Finding a good loan on Prosper is luck.

[Urbi_et_Orbi]

Welcome, Texas.

Interesting thread.  I'd like to nominate for the lobby.

[ira01]

Interesting thread.  I'd like to nominate for the lobby.

Fine with me.

[Mark12547]

Since this is already a publicly-viewable forum and since this thread has more to do with Prosper loans than a personal introduction, I'm going to go ahead and move the thread to The Lobby.

[Texaswatchdog]

FWIW, 3 of my 7 lates are C's.  One is an A.  So, more than 1/2 of my lates would fit within your parameters. 

Sticking with AA-C loans is only one of my ways of screening. I, like, most of you, have many ways of trying to find the diamonds in the rough. I will start a new thread with some of my ideas and other people can comment on them and add to them.

[TJGbank]

,

[Xenon481]

I'm pretty confident I can come out with at least a 4% return.

When calculating your return, don't just rely on Ericscc or Lendingstats as these site don't have enough information to take into account the amount of idle time that your money spends by just sitting in your Prosper account not being loaned out.  You should utilize Excel's (or google spreadsheets') XIRR functionality to calculate your true returns.

[ira01]

I'm pretty confident I can come out with at least a 4% return.

When calculating your return, don't just rely on Ericscc or Lendingstats as these site don't have enough information to take into account the amount of idle time that your money spends by just sitting in your Prosper account not being loaned out.  You should utilize Excel's (or google spreadsheets') XIRR functionality to calculate your true returns.

Although XIRR is the gold standard, idle time really doesn't impact returns all that much unless you routinely leave a large cash balance in your Prosper account for lengthy periods of time.  For example, I think there is only about a 40 bp difference between my XIRR (without accounting for lates) and my weighted average rate less Prosper's servicing fee (which is attributable to the idle time).  And now, with Prosper's newly relaxed instant transfer rules, I expect idle time to be of even less importance. 

[Capital_Finance_Group]

Hi, I'm a new lender on Prosper.  I know what you are going to say. "NO NO, STOP Get out now while you still have a chance."  I'm not loaning money as a way to get rich quick or to get poor quick either. I'm doing it as a part time hobby just for fun. I only put in $1200 and am real careful who I loan money. I don't loan  to anyone less than a "C" credit rating or with any active defaults. I also have additional ways of screening out most of the bad ones.

I looked at a lot of the listings that went 4+ months late or defaulted. Some of them looked like obvious deadbeats and/or scam artist. Is there an active website anywhere that shows off the deadbeats from Prosper?  I found one site called "Wall of sham" but it was no longer up.

-Tex

NO NO, STOP Get out now while you still have a chance.