Welcome. As Urbi said, please take some time to read the wealth of information available on this site and others. I have a few questions for you:
1) Do you realize that about 40% of all Prosper loans ever made are or will be delinquent? See Fred93's highly informative graphs here --
http://www.prospers.org/forum/fred93_blog_08012009_late_loan_stats_and_the_sad_legal_test_joke-t15121.0.html2) Do you know that Prosper has repeatedly breached its contract with lenders, including by unilaterally switching collection agencies (at a higher cost to lenders), unilaterally refusing to sell defaulted loans to Junk Debt Buyers, unilaterally modifying loan terms, including reducing monthly payments and principal, despite express prohibitions on this in the Lender Registration Agreement, etc.?
3) Do you know that out of the more than 40,000 lenders with an average loan age of more than 365 days, the average (mean) expected Return On Investment (ROI) is
-3.45 and the median (half do better, half do worse) is
-2.0%? http://www.ericscc.com/stats/lender-return-distribution
4) Are you aware that unlike with original Prosper, any loans issued now are NOT owned by the individual "lenders," but are actually owned by Prosper? You do not have any ownership interest in the payment stream from the borrower, nor do you have a security interest in it. Thus, you are merely an unsecured creditor of Prosper, like any of its other unsecured creditors. In the event of a Prosper bankruptcy, "lenders" will be standing in line with all of Prosper's own creditors to receive any payments. And highly relevant to this issue, is the fact that according to Prosper's own financial statements in its SEC Registration, it only has enough cash to stay in business for about another 4 months. Unless it receives another large infusion of cash, presumably from its Venture Capitalist backers (who may well be having second thoughts about Prosper, especially given its anemic level of loan originations), it will be out of money.
There are many other issues with Prosper, as you will discover by doing your due diligence, but this ought to give you some food for thought.
