Prosper.com Experiment Update II

(For more detail, see these previous posts Prosper.com Experiment, Prosper.com Experiment Update)

Well so far the experiment is moving along smoothly. I have received my first $50 in payments yesterday which I used to bid on another loan (Credit Rating: AA @ 11.25%). All loans are now current and none are late which is great news since my one late payer doubled up on her January payment and is now up to date.

Since the $50 in payments I received is made up of prinicpal and interest, I have decided upon this strategy for adding the new loan every month:

• The first two loans, over the next 2 months, will be targeted at credit grade C or Higher, with a tendancy to choose AA, A or B.
• The third loan, in three months, will get a little riskier and take someone with a HR credit rating assuming their credit stats don’t have any glaring concerns.
• I will then repeat with 2 higher credit loans and then a third with a high risk borrower.

This three month cycle of adding two safe loans and one risky loan to my portfolio should help keep my risk low while slightly improving my average interest rate. Only time will tell how this will work out in the end, especially if we are approaching a recession. Remember, most of these P2P lending sites have not been through an economic slowdown. Hopefully things will work out for the best and I will keep updating you on my progress here.