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[Cushie]

http://www.prosper.com/about/media_press_releases.aspx?t=Prosper_Unveils_1-Year_and_5-Year_Peer-to-Peer_Loans

[Cushie]

Entire press release:

San Francisco - Prosper.com, the world's largest peer-to-peer lending marketplace with over one million members and $206 million in funded loans, today announced it has expanded its product offering to include 1-year and 5-year term loans. Prosper's product offering of one, three and five year loan terms is now the broadest available in the industry. Prosper also released peer-to-peer lending market survey statistics for September 2010.

"The combination our expanded product offering and one-of-a-kind auction based Note Trading Platform, provides Prosper investors with greater diversification opportunities and the broadest selection of investing options available in the peer-to-peer lending industry," said Chris Larsen, CEO and co-founder of Prosper. "For qualified borrowers, more loan term products provide greater payment and time horizon flexibility."

Larsen continued, "For debt consolidation borrowers in particular, a 5-year loan term eases their monthly payment burden while at the same time putting them on a clear path to knock out their high interest credit card debt. Young professionals, new homeowners, and small business owners are a perfect fit for a one-year loan, serving as a way to cover security deposits, big ticket item purchases, and unexpected inventory demand requirements. And as always, there are no pre-payment penalties for those who pay off their Prosper loans early."

To register to automatically receive Prosper's monthly market surveys, click here to send an email with "SUBSCRIBE" in the subject line.



Prosper Statistics for August 2010:

Prosper
Rating
 Borrower
Rate
 Lender
Yield
 Expected
Annual
Loss Rate
 Expected
Annual
Return
 Average Loan
Amount
 Loan
Volume
 % of
Funded Loans
 
AA  8.09%  7.09%  1.47%  5.62%  $8,998 $296,945 15%
A  11.36%  10.36%  3.44%  6.92%  $7,778 $303,352 15%
B  14.81%  13.81%  5.77%  8.04%  $9,246 $453,036 23%
C  22.39%  21.39%  8.41%  12.98%  $9,563 $76,500 4%
D  26.90%  25.90%  10.44%  15.46%  $3,771  $414,774  21% 
E  33.54%  32.54%  14.20%  18.34%  $4,031  $249,902  12% 
HR  32.15%  31.15%  22.53%  8.63%  $2,846  $213,449  11% 
All Funded
Loans
 20.26%  19.26%  8.68%  10.58%  $5,340  $2,007,958  100%



Prosper Peer-to-Peer Borrower Loan Purpose

   Funded Loans 
Debt Consolidation  53% 
Home Improvement  11% 
Business Use  14% 
Auto / Vehicle  3% 
Other Use  19% 



Definitions
Borrower Rate: The interest rate borrowers pay on their Prosper personal loan.

Lender Yield: Yield percentage is the lender's effective yield net of servicing fees, based on the borrower's interest rate.

Expected Annual Loss Rate and Expected Annual Return: Expected Annual Return is the projected average annual return on funds invested in all loans with a certain Prosper Rating originated on our platform between July 15, 2009 and May 31, 2010. Expected Annual Return is calculated by subtracting the Expected Annual Loss Rate for those loans from the corresponding Lender Yield. The Expected Annual Loss Rate is based on the historical performance of Prosper loans for borrowers with similar characteristics, with adjustments for accrued interest not collected and late fees on defaulted loans. The calculation of Expected Annual Return and Expected Annual Loss Rate requires significant assumptions about the repayment of loans and lenders should make their own judgments with respect to the accuracy of these assumptions. Actual performance may differ from estimated performance.

Loan Purpose: Borrowers who post listings in the Prosper marketplace are asked how they intend to use their peer-to-peer lending personal loan. The loan purpose reflects borrowers' statements of intended use of loan proceeds and is the percentage of total dollars funded for the month. Prosper does not verify or confirm after funding how loan proceeds are used

About Prosper
Prosper Marketplace Inc. is the world's largest peer-to-peer lending marketplace with more than 1,000,000 members and over $206,000,000 in funded loans.

Prosper allows people to invest in each other in a way that is financially and socially rewarding. On Prosper, people list and bid on loans using an online auction platform. Borrowers list loan requests between $1,000 and $25,000 and set the maximum rate they are willing to pay. Individual and institutional investors bid in minimum increments of $25 on loan listings they select. In addition to credit scores, ratings and histories, investors can consider borrowers' personal loan descriptions, endorsements from friends, and community affiliations. Once the auction ends, Prosper handles the funding and servicing of the loan on behalf of the matched borrowers and investors.

Prosper was co-founded by Chris Larsen, co-founder of E-LOAN. Prosper has raised $57.7 million in venture capital and is backed by financial and technology luminaries including, Jim Breyer of Accel Partners; Bob Kagle of Benchmark Capital; CompuCredit; Omidyar Network; Capital One Co-founder Nigel Morris of QED Investors; Court Coursey of TomorrowVentures; and Larry Cheng of Volition Capital.

Notes offered by Prospectus.

[ira01]

I wonder if the origination fees are going to remain the same.  If so, 1-year loans will be very expensive, since the origination fee will only be for 1 year's use of the money, rather than 3.  That will raise the APR quite a bit.

[yankeefan]

Some additional info from .com

What kinds of loans are available on Prosper?
Prosper offers fixed rate, “fully amortized”, unsecured loans from $1,000 to $25,000. Loan terms of 1, 3 and 5 years are available, depending upon Prosper Rating and loan amount. There are no penalties for paying off your loan early or for making partial prepayments.

Loan Terms

Prosper Rating <=$3,000 $3,001 -$7,500 $7,501 -$10,000 $10,001 -$15,000 >$15,000
AA                1yr and 3yr       3yr                    3yr          3yr and 5yr           3yr and 5yr
A                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
B                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
C                         3yr          3yr                     3yr           3yr  
D                        3yr            3yr      
E                         3yr           3yr      
HR                       3yr           3yr      

fee schedule doesn't have any reference to loan length.

[cubbiesnextyr]

Their loan calculator still only does 3 year loans.

[yankeefan]

.... but you can search for 1 and 5 year listings (and you won't find any today.)       

[cubbiesnextyr]

.... but you can search for 1 and 5 year listings (and you won't find any today.)      

Probably since you can't actually create a 1 or 5 year listing yet.

I just tried with my wife's account, it's a no-go.  

I take that back, I was using a to high amount (5K)

A 1 yr, 1K loan @7% = 7.94% APR

[ira01]

Some additional info from .com

What kinds of loans are available on Prosper?
Prosper offers fixed rate, “fully amortized”, unsecured loans from $1,000 to $25,000. Loan terms of 1, 3 and 5 years are available, depending upon Prosper Rating and loan amount. There are no penalties for paying off your loan early or for making partial prepayments.

Loan Terms

Prosper Rating <=$3,000 $3,001 -$7,500 $7,501 -$10,000 $10,001 -$15,000 >$15,000
AA                1yr and 3yr       3yr                    3yr          3yr and 5yr           3yr and 5yr
A                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
B                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
C                         3yr          3yr                     3yr           3yr  
D                        3yr            3yr      
E                         3yr           3yr      
HR                       3yr           3yr      

fee schedule doesn't have any reference to loan length.

So the 1 year term is only available for small (<$3K) loans.  For A and B borrowers, the minimum origination fee is $75.  So an A borrower who borrows $1,000 for 1 year is paying a 7.5% origination fee.     If their interest rate is 8%, that is an APR somewhere around 16%.     What true A borrower would pay that?  I still get a ton of credit card cash advance offers with 0% for about a year, and a 4% or 5% origination fee.  And I can simply write a check to access the money immediately -- I don't need to jump through Prosper's hoops.

[cubbiesnextyr]

Some additional info from .com

What kinds of loans are available on Prosper?
Prosper offers fixed rate, “fully amortized”, unsecured loans from $1,000 to $25,000. Loan terms of 1, 3 and 5 years are available, depending upon Prosper Rating and loan amount. There are no penalties for paying off your loan early or for making partial prepayments.

Loan Terms

Prosper Rating <=$3,000 $3,001 -$7,500 $7,501 -$10,000 $10,001 -$15,000 >$15,000
AA                1yr and 3yr       3yr                    3yr          3yr and 5yr           3yr and 5yr
A                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
B                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
C                         3yr          3yr                     3yr           3yr  
D                        3yr            3yr      
E                         3yr           3yr      
HR                       3yr           3yr      

fee schedule doesn't have any reference to loan length.

So the 1 year term is only available for small (<$3K) loans.  For A and B borrowers, the minimum origination fee is $75.  So an A borrower who borrows $1,000 for 1 year is paying a 7.5% origination fee.     If their interest rate is 8%, that is an APR somewhere around 16%.     What true A borrower would pay that?  I still get a ton of credit card cash advance offers with 0% for about a year, and a 4% or 5% origination fee.  And I can simply write a check to access the money immediately -- I don't need to jump through Prosper's hoops.

I don't know about that.  See my previous post.  Perhaps they changed the fees for the 1 yr loans?

[yankeefan]

no minimum for AA loans

Closing fee
The closing fee is a percentage of the amount borrowed and varies by Prosper Rating:

Prosper Rating Closing Fee
AA: 0.50% with no minimum
A, B: 3.0% or $75, whichever is greater
C - HR: 4.5% or $75, whichever is greater

For the others, it simply means they only get to walk away with 97% of the loan amount (or loan less $75).  no big deal...   

[ira01]

Some additional info from .com

What kinds of loans are available on Prosper?
Prosper offers fixed rate, “fully amortized”, unsecured loans from $1,000 to $25,000. Loan terms of 1, 3 and 5 years are available, depending upon Prosper Rating and loan amount. There are no penalties for paying off your loan early or for making partial prepayments.

Loan Terms

Prosper Rating <=$3,000 $3,001 -$7,500 $7,501 -$10,000 $10,001 -$15,000 >$15,000
AA                1yr and 3yr       3yr                    3yr          3yr and 5yr           3yr and 5yr
A                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
B                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
C                         3yr          3yr                     3yr           3yr  
D                        3yr            3yr      
E                         3yr           3yr      
HR                       3yr           3yr      

fee schedule doesn't have any reference to loan length.

So the 1 year term is only available for small (<$3K) loans.  For A and B borrowers, the minimum origination fee is $75.  So an A borrower who borrows $1,000 for 1 year is paying a 7.5% origination fee.     If their interest rate is 8%, that is an APR somewhere around 16%.     What true A borrower would pay that?  I still get a ton of credit card cash advance offers with 0% for about a year, and a 4% or 5% origination fee.  And I can simply write a check to access the money immediately -- I don't need to jump through Prosper's hoops.

I don't know about that.  See my previous post.  Perhaps they changed the fees for the 1 yr loans?

Prosper's website shows the fees for the various credit grades, but does not mention a lower fee for 1 year loans.  Perhaps they simply failed to update their website, but I doubt it. 

Your 1-year example in your previous post -- was that for a AA?  Because there is no minimum fee for AA.  It is the A and B borrowers that get the shaft on small loans.

[Staneslav]

a

[Cushie]

Well lord knows what to expect out of the default rates on these new 1 and 5 year loans.

My predication is that they'll be higher.  As Ira noted, almost anyone with halfway decent credit can get a 1 year credit card for 0% with a limit that's ample.  Five year loans just give people more opportunity to have issues - job loss, bankruptcy, medical problems, etc. 

[Staneslav]

a

[JGuide]

Significant news.

lobby