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Author Topic: Prosper's "maximum loan amount"  (Read 8990 times)

Fred93

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Prosper's "maximum loan amount"
« on: April 17, 2010, 08:05:10 pm »
Can anyone explain to me Prosper's "maximum loan amount"?  It sounds like it is the maximum amount of a loan one can ask for, but it isn't.  Its something else.  

In the latest prospectus, http://www.sec.gov/Archives/edgar/data/1416265/000141626510000159/prosperposam24d14d10.htm on page 55, there's a table labeled "maximum loan amount".  It says
Quote
Maximum loan amount
An individual’s maximum loan amount is determined by the borrower’s credit bureau score and Prosper score.  The table below shows the maximum loan amount for each segment:

Ok, so I look in the table.  If a borrower has a "prosper score" of 4, this table seems to say that his maximum loan amount is either 7.5K or 15K.  That would lead me to believe that such a borrower could never borrow more than 15K.  

But then I go to the prosper.com web site, and filter on prosper score = 4, and I see listings with 25K loan amounts, such as http://www.prosper.com/invest/listing.aspx?listingID=428291

So what is the "maximum loan amount" that they describe in the prospectus?  I mean what does it actually do, if it doesn't limit the amount borrowers can borrow?
« Last Edit: April 17, 2010, 08:21:50 pm by Fred93 »
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TJGbank

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Re: Prosper's "maximum loan amount"
« Reply #1 on: April 17, 2010, 08:11:09 pm »
,
« Last Edit: March 02, 2012, 03:32:17 pm by TJGbank »
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Mark12547

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Re: Prosper's "maximum loan amount"
« Reply #2 on: April 17, 2010, 08:22:36 pm »
Quote from: TJGbank on April 17, 2010, 08:11:09 pm
You expect Prosper to make sense?
 ???

The Prospectus should be consistent with the actual operations where the Prospectus describes it.
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God-Father

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Re: Prosper's "maximum loan amount"
« Reply #3 on: April 17, 2010, 08:22:53 pm »
The note at the bottom of page 58 implies to me that they are suppose to enforcing the rule as you expected.

Quote
Note: The data above makes no adjustments for maximum loan amount, which is expected to decrease loss rates or previous Prosper loans and product term.
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pioneer11

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Re: Prosper's "maximum loan amount"
« Reply #4 on: April 17, 2010, 08:31:19 pm »
Nominate for lobby.
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God-Father

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Re: Prosper's "maximum loan amount"
« Reply #5 on: April 17, 2010, 08:33:33 pm »
Second
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Fred93

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Re: Prosper's "maximum loan amount"
« Reply #6 on: April 17, 2010, 08:34:05 pm »
Quote from: God-Father on April 17, 2010, 08:22:53 pm
The note at the bottom of page 58 implies to me that they are suppose to enforcing the rule as you expected.

Quote
Note: The data above makes no adjustments for maximum loan amount, which is expected to decrease loss rates or previous Prosper loans and product term.

Yea.  I had the same interpretation.  "is expected to decrease loss rates" because by limiting the loan size of weaker borrowers, we keep some of them out of trouble.  That would make sense only if the "maximum loan amount" was actually used to limit the loan amount.

Its kind of a weak association tho.  There aren't enough words to actually say what they do with this number, or many of the other numbers.  There are some words that one could interpret to say they mean all the numbers in several tables to be hypothetical.
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Xenon481

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Re: Prosper's "maximum loan amount"
« Reply #7 on: April 17, 2010, 09:05:44 pm »
Third for Lobbying.

Yet another example of Prosper lying to an arm of the US Federal Government. Isn't filing a false prospectus with the SEC criminal in nature?
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GLeaderAccountantsChoice

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Re: Prosper's "maximum loan amount"
« Reply #8 on: April 18, 2010, 07:44:18 am »
Quote from: Xenon481 on April 17, 2010, 09:05:44 pm
Third for Lobbying.

Yet another example of Prosper lying to an arm of the US Federal Government. Isn't filing a false prospectus with the SEC criminal in nature?

Filing a fraudulent one (scienter) can be, yes.  Investors can also sue if they relied on bad information (the rules are a little different between an original and subsequent filing under the 33, 34 Acts).

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312lender

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Re: Prosper's "maximum loan amount"
« Reply #9 on: April 18, 2010, 07:55:42 am »
Hey Fred -- When is your next blog entry coming out?
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Fred93

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Re: Prosper's "maximum loan amount"
« Reply #10 on: April 18, 2010, 06:19:53 pm »
Quote from: 312lender on April 18, 2010, 07:55:42 am
Hey Fred -- When is your next blog entry coming out?

When the spirit moves me.  I was thinking of an update to the late curves thru May 1st for sometime in early May.
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pioneer11

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Re: Prosper's "maximum loan amount"
« Reply #11 on: April 18, 2010, 07:48:18 pm »
Ummm...this seems to not be in the lobby.
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Ferrix

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Re: Prosper's "maximum loan amount"
« Reply #12 on: April 18, 2010, 08:16:18 pm »
Quote from: pioneer11 on April 18, 2010, 07:48:18 pm
Ummm...this seems to not be in the lobby.
Cushie accidentally moved it FROM lobby to introductions.  Fixed.
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Cushie

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Re: Prosper's "maximum loan amount"
« Reply #13 on: April 18, 2010, 08:37:31 pm »
Jeez - time to stop multi-tasking.  Sorry for the short burst of crazy.
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nonattender

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Re: Prosper's "maximum loan amount"
« Reply #14 on: April 19, 2010, 10:10:10 am »
Did anyone ask Prosper, yet?  I have only read to around pg 27 of the latest prospectus (though scanned
the rest of it) and I noticed some changes in there that aren't currently live, like 3 month to 7 year loans.

Perhaps it's an upcoming feature, or perhaps it's a mistake reflecting a disconnect between legal/platform.
I dunno - but I bet I could fire off an email and find out pretty quick, if I really wanted to find out which...

-t
« Last Edit: April 19, 2010, 11:24:06 am by nonattender »
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