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I've been debating the idea of doing peer-to-peer lending. I saw this question and am curious:

  1. What kind of success/failures have people seen from P2P lending?

  2. Some sites require their users to have a certain level of income before joining, I think Lending Club required you make an annual salary of at least $70k and have something like $200k in liquidable assets, in order to join.

    Has anyone joined w/o meeting those conditions? Did it affect the experience at all?

Community
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BotNet
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3 Answers3

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Before you jump into Prosper, I highly recommend you to check out prospers.org (not affiliated with the site) to hear about actual experiences of lenders.

Bear in mind that many of the borrowers on these social lending sites have already been passed on by the banks, and the "credit score" Prosper assigns to them is absolutely worthless. I've done some lending on Prosper a few years ago and stuck mostly to borrowers that Prosper rated A or AA, many of whom turned out to be complete deadbeats. Some never even made a single payment, and Prosper hardly did anything to attempt to collect from them.

So beware.

Tony the Pony
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I funded about a half dozen loans. All were AA or A rated. All but one paid me. The one who stiffed me wiped out all my profit on the others. I ended up with a tiny negative return.

Eric
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Read the prospectus carefully. In the case of Prosper, you're really making a loan to Prosper, which is in turn linked to the borrower's payments.

Also, the rates are really high. If I was looking for money, I'm not sure why someone with "AA" credit would ever go with a Prosper loan.

duffbeer703
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