SIGN UP TO RECEIVE THE LATEST POSTS VIA EMAIL!Prosper.com Still Sucking Me Dry
November 10, 2009
Prosper.com has unveiled a $50 bonus to get you to sign up for an account. So tons of blogs and websites are posting about it tying to get people to sign up. Well before you do, I would consider looking around at at all the negative prosper.com reviews. I know reading other peoples reviews that a lot of people have pulled out of Prosper.com due to poor performance, so I am curious if the $50 bonus will bring in many new unsuspecting members.
For instance, in my case, I am down about $575 since I started investing with them 3 years ago. So yes, a negative return over 36 months. I could have done better in a 0 interest checking account! This past year has brought a flurry of bankruptcies and people stuck in the “collections” black hole.
I have had a total of 18 charged off notes (meaning I am never going to see that money!). Here is the breakdown by credit grade:
- AA:3
- A:5
- B:5
- C:3
- D:1
- HR:1
What concerned me is that most of my charge offs were in the AA, A, B and C range. I would have expected more in the D or HR, which makes me wonder if there was any fraud involved here by people setting up fake accounts, I can’t prove it, but because of this, I am definitely not putting anymore money into prosper. And those don’t even include the 10 loans that are currently in collections over 1 month, which means there is another $275 I will probably see charged off shortly.
So I guess what I am trying to convey here is that before you get enticed by a $50 bonus to open an account, make sure you do your research since I have been unable to make investing in Prosper.com successful. Others have done it, but I just am unable to figure out the formula to avoid charge offs and people that just aren’t paying their obligations.
I am sorry to hear about this spread of bad luck. I think it’s ironic that it is those with high ratings that have backed out of repaying their loans. Why? I have a loan through Prosper with a “D” rating. It’s only for $2000, which I was grateful to receive, but I can assure you that I will be paying back this loan. It’s my second loan – the first I paid back within six months’ time. I am doing this to build up my credit score.
I’ve already made my first payment, with more monthly payments, and perhaps, snowflake payments to follow. Perhaps, but I would rather pay off my Wamu credit card first.
Good luck with any future endeavors regarding Prosper. I know that when someone decides to fund me a loan, they WILL be getting back their money in full, plus interest. Take care!
I had a similar experience. Right now I am breaking even, but only because I provided a large loan to a family member. I also had 2 loans which never made a single payment. I believe there is rampant fraud on this site. I highly recommend Lendingclub, they have a much better vetting process for borrowers. I have dozens of loans there and not a single charge-off.
Prosper is a good solution for lending to friends and acquaintances– people you vet yourself.
Sorry to hear your pain. My experience has been good so far, but I only invested in a few loans on Prosper. I did, however, sensed from the lender community a bit of uneasiness in regards to the defaults ramping up and decided to try Lending Club instead, which has a very tough credit policy. So far, so good. I’m making about 8.5% after a few defaults. The trick is diversification: I have just over 100 loans, so a couple of defaults here and there can be absorbed.
I am glad to see others out there are doing somewhat ok. I always had in the back of my mind that once the economy turned south I would see a lot of my loans go belly-up. So I should have held myself back from investing, however I am just shocked by the high number of A and B credit rated loans that defaulted.
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thank you for this article. I was close to investing, but will hold off and watch for a bit.
I invested in Prosper and after three years have losses from high credit rated deadbeats. almost a third of the loans defaulted! Who is rating these people? The same people that regulated the banks? I consider the losses to be donations to criminals to keep them from the honest people.