Just a quick update on my experience with this site. So far, all of my borrowers are current on their loans. Each has made at least one payment. Of the $500 I've lent out, I've received back $20.73 in principal and $4.81 in interest. Prosper has collected 15 cents in service charges from me, giving me a net interest total of $4.67. My ROI is holding steady at 17.79%.
The errors I was seeing on their loan detail screen were resolved a week or two ago. Hmm.. I thought I wrote about that, but in checking my previous Prosper posts, it looks like I didn't. The problem was that the Remaining Principal figure shown on one of my loans was wrong. I had lent $200 but the report showed there was over $300 outstanding principal remaining. This was the loan that the borrower had made early payments on, so I figured it was a simple calculation error. I emailed Prosper tech support, sent them a screen shot, and it was fixed very quickly.
It's still taking about a week for payments to get completely credited to my account, but again, that's a function of how the ACH system works and is nothing Prosper has control over. However, they are very good about noting which payments are still in process and which have been completed.
I'm pretty happy with Prosper so far. In another month or so, when I've collected enough to reach their $50 minimum, I'll probably lend again and keep my money in play. It's possible I may deposit some more of my own money to lend, but right now, I have too many possible other investments I'm looking at and I want to keep my options open for a while.
Thursday, April 20, 2006
Prosper.com Again
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3 comments:
It's not so much I'm excited about it - I had a person request an update on my experience with it. Although I also just got a newsletter from Prosper for lenders that discusses some good changes that I'll probably do one more write up about.
I think the performance is scalable. We're talking about the Internet, after all.. As long as there is a pool of borrowers, I think you can make as many loans as you want. However, for me personally, this will remain a sideshow, at least for the time being. I'm getting a good ROI, but I'm missing out on all of the advantages of real estate - appreciation, tax deductions for depreciation, being able to raise rents, etc. So I'll probably just use Prosper for small money investing until I get a couple buy-and-hold rental properties in my portfolio.
shaun, it was me asking all of the trick questions about prosper and the 'what if'-risk.
I suppose the risk is the $500 outlay and with the ROI tracked at 17.78% on the initial investment and 28 month payback assuming no reinvestment, it's looks on the surface as an OK deal?
Now since you're getting approximately $18/mth on the initial $500 investment once you've reached that $50 cash into your prosper account you can then (as you said) do the reinvest.
I've calculated that doing this you will eventually get your risk or payback time down from 28 months to less than 24 months assuming again no early loan payouts by the borrowers.
Well done, keep us informed on your successes with this
Thanks. That was a pretty good article!
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