In the right-most column, I’ve added a new ad from Prosper.com (I really like their ads, they’re so pretty). I was contacted by Prosper about running this ad through the end of December.
I don’t want to run ads for just anybody, but I feel ok putting one up for Prosper–here’s why:
It’s a legitimate site. It gives some people with a bad score a chance to borrow money (of course, if they’re not going to pay it back, they’re still screwed). It doesn’t charge payday loan interest. And it gives lenders a chance to earn some money and help people out.
Are there risks? Yes. James and Miel at DINKSFinance.com lost some money in the subprime mess by lending to high-risk borrowers. Their loss was $300, not too bad considering that they should be making a fair amount of money on their other investments. However, it’s good to remember that even on Prosper you won’t necessarily get repaid.
Another big reason I thought it’s worthwhile to advertise the site is that lots of people from around the blogosphere are having good experiences with it. Here are some that I came up with:
- Tricia at Blogging Away Debt borrowed money with Prosper and has been aggressively paying it back! She has a whole set of posts about her experience.
- Likewise, LazyMan(andMoney) has a category for his Prosper lending, his reasons and experience.
- Frugal Zeitgeist went through some of the borrowers on Prosper and summarized the types of things that lead low-risk (some high-risk thrown in) and high-risk borrowers to…borrow (my vocabulary is a bit off today).
- Dawn at Queercents experimented as a borrower. She even got some thank-you notes for being responsible (though not in the post I’m linking to).
- American Consumer News looked at why Prosper isn’t necessarily better than a good index fund but has a better return than your average savings account (even the good ones).
(If you’re not on here, sorry, I just didn’t remember.)
Do I plan to lend or borrow on Prosper. Not right now. I don’t want more debt. And I don’t feel entirely comfortable with the idea of making money directly off another person. Other parts of my brain point out that they’re probably getting better rates and whatnot. As I said , I’m not comfortable. If you want to sign up I don’t see why you shouldn’t.
Disclaimer: If you use the link in the button, I’ll get $25. But here’s the good part–so will you. So why not use the link and we’ll both be happy. Otherwise kittens might cry. 😉 I mean what? Why am I still talking? You do what you want. 🙂
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Interesting. I have considered trying out prosper- as a lender, but at first glance it felt too risky to me. I really don’t like how easy it appears to be for borrowers to default.
That being said, I do intend to likely dabble in it with speculative investment dollars some day, though I won’t have those dollars until I have paid off a lot more debt. 🙂
One advantage of Prosper is that you can invest only a bit in the high-risk borrowers. But you’re right, there’s certainly the possibility of default.
I think SavingDiva is doing some Prosper lending with a little extra money she made online. Normally it’d go into her savings, but it’s an interesting idea.
When I have more money I’d like to invest in some socially conscious funds—that’s probably as speculative as I’ll get. 😉
I’m investing in Prosper right now. There’s a little bit of the “Damn the man” to it in bypassing the banks, but that’s purely for entertainment value. The more interesting thing is that it should be fairly independent of the stock market, making Prosper loans part of a diversified investment portfolio. That is assuming that their rates of returns are manageable, but it’ll take a few more years to have some level of confidence.
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