I'm getting the feeling I'm not welcome here. It seems this is not an active lending forum as I had thought.
You are welcome here. It's always interesting to see someone give it a shot. Not many people are lending because it is not as profitable as Prosper's marketing team would have you think.
My "theory" is based on "times have changed" and the time is right for P2P lending.
Yes. Many people have bitten on the "times have changed" thought before. Although Prosper has improved their credit based selection criteria (which lenders could have done themselves at any time), I still think that Prosper's verification process is weaker than other credit providers and they are still attracting a poor class of borrowers.
I'll try to not rehash all of the other good advice & comments already made.
If there is one single bit of information that I think it is critical for you to know, it's that this what the shape of your XIRR will look like over time if you were to stop lending now. It will take about 15 months to find out how you are really doing.
Source:
http://www.prospers.org/forum/will_researchpro_leave_or_admit_he_was_wrong-t11350.0.html;msg347866#msg347866If you continue to lend, you will still have that shape, just flatter & more stretched out. ResearchPro also went with the high interest rate loan approach as you are doing. I don't think it works out that well as ira01 has already spelled out. ResearchPro has done far better than many other lenders due to his efforts in analyzing the data. But 4% ROI is what he was shooting for.
Blaming it all on lenders choosing poor credit risk borrowers is not the full story. Here is an older chart produced by Rate Ladder when he was still interested in lending. Please note, the credit grades are based on the older Experian Plus credit grades (not the newer Prosper rating system). Still lates are far higher than they should have been.
Source:
http://www.rateladder.com/2008/10/20/prosper-1-month-late-or-worse-curves-by-credit-grade/Another current concern is that I *think* Prosper's current estimated default rate is too optimistic since they include a number of loans that are too young to default. I haven't bothered to confirm that as it's been true in the past, and I have such low expectations that they are correct now.
What would be great is if you also posted your monthly XIRR here. It's always interesting to see how things pan out & chart the change like we did with ResearchPro. Unfortunately the numbers on Eric's CC are just estimates.
Also, know that the Identity theft guarantee is bogus. They stopped paying out once they eliminated our ability to identify cases of identity theft.
In any case, welcome to the boards. Feel free to ask questions about the prospectus, throw up some loans you are curious about in the "Check out my List" subform to get other people's input.
http://www.prospers.org/forum/check_out_my_listing-b10.0/ There is a lot of knowledge here in these forums, you just have to ask. (It's too much to dump on you all at once).
