13 users resposed " What Happened to Prosper.com? "
March 24 2009
I have a few Prosper loans currently loaned out, and was wondering what was going on, but the amounts were so low that I hadn’t looked into it yet. Kind of sad that what started as a promising proposal seems to have fizzled out.
March 24 2009
Good point. Excatly the same thing happend in Denmark. People were giving out loans, but somehow the money seemed to vanish into thin air. The service was shut down by the goverment. I actually liked the idea, but obviously there is a need for some kind of credit approval, before you lend someone your money. Without this, the entire thing seem more like gambling, with pretty bad odds.
March 24 2009
I was one of the first users on Prosper. Kind of sad to see them closed to lenders. Still hope they come back.
In the meantime, I’m having a good time investing in peer lending via Lending Club. They reopened last year after about 6 months of talking to the SEC. Their loans are doing much better, with somewhere around 4-5% defaults.
Also, there is a new company that came up with a “mutual fund” approach called Pertuity direct. Have not tried it, but it looks interesting.
If all that fails to get your attention, there is always kiva.org
March 25 2009
I like the idea of Kiva. Helping people in developing countries with loans, is a good idea. However, I do still consider this to be a risky business. You give a loan to a person, mainly based on the information from a user profile.
March 25 2009
I knew the peer-to-peer lending industry would fall apart. Yet, several of the top personal finance bloggers couldn’t talk about peer-to-peer lending enough.
The idea was as good as the sub-prime lending idea. Borrowing money to people that should borrow money.
March 25 2009
Too bad Prosper messed it up. But Peer-to-peer lending is far from falling apart. It’s definitely getting some attention from regulators, and few companies are offering a product that makes sense, like Lending Club. I got a loan and then became a lender. Loving my 8-9% returns.
March 25 2009
Curt, I don’t think the industry is falling apart. However, it needs to mature and has a long way to go before it becomes a reliable investment opportunity.
March 25 2009
@Jakob – FairRates was the company that was shut down in Denmark. Their team was subsequently acquired by IOU Central, who has stated an intention to launch a site in the US.
In my opinion, Prosper is not dead (yet) – according to their filings with the SEC, they are following Lending Club’s lead and getting registered. It took Lending Club about 6 months, and will probably take about the same amount of time for Prosper.
March 25 2009
It’ll be interesting to see when a company dose a mutual fund approach. It seems to be too much of a hassle to go out and cherry-pick loans. I’d rather see a fund-type thing that I can invest in. That way, I could see some track-record of performance and use that to better compare it to other investments.
March 29 2009
Pertuity Direct has a mutual fund-like approach. They’re very new (<3 months old), so you won’t get much in the way of track record, but you can effectively hand them their money and they’ll take care of the rest.
July 27 2009
[...] provide evidence that the loan is having the desired impact. Therefore, if you choose to seek a debt consolidation loan from a peer lending service, prepare for lenders to have a little more insight into your family’s daily life than you would [...]

During the end of 2006 and the beginning of 2007, there was a brand new crazy hitting the world of personal finance. Consumers would lend money to one-another and completely bypass the financial system. Lenders would get a great interest rate on the money they put out and borrowers who might not otherwise be able to qualify for a loan through traditional means would be able to get a loan. The service was an entirely new take on consumer credit. Unfortunately, because of low loan performance legal issues with the Securities & Exchange commission, it seems that 

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