Feb
Making Money with Prosper.com
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Entrepreneurs are always on the lookout for new opportunities to make money. Whether its putting advertisements on a website or selling affiliate products, we want to increase our earnings. Well, have you ever thought about making money online through a different avenue?
I’ve known about Prosper for awhile now. I read about it in magazines and news articles, but never took the time to sign up and participate in it. For those of you who don’t have a clue what I’m talking about, Prosper is “the online marketplace for people to people lending”. What that means is any individual can borrow or lend money to other people. Lenders bid on how much they will lend and at what rates they are willing to offer. For a quick look at what it means to be a Prosper lender, click here.
People on prosper are looking for money for all sorts of things. Some people need money to purchase an automobile, finance a business, start a rock band, pay back a family member, purchase a wheelchair.. you name it. Thousands of people are looking for money. If someone is looking for $2,000 to pay for college, and you only have $500 to lend, you can put in that portion of the money. You don’t have to give someone the whole amount. While browsing the loans out there, people put in $50 all over the place.
As a ‘lender’ they use actually means ‘loan purchaser’, so you don’t have to be licensed to give money. Prosper.com takes all the money from the lenders and combines it into a loan that they distribute to the person.
Lending money to someone at 20% isn’t free money. There are risks involved, such as, the borrower not paying the loan. That would suck if someone didn’t pay you back right? That’s why Prosper suggests you diversify. Instead of putting all your money into one person, spread it out over 10 people or more.
I took the first step today and signed up with Prosper. I am interested to see if you can make decent money by lending it out to people. I know a lot of research has to go into who you are investing. I think that Prosper provides you their credit information and other variables. If I actually lend someone money, I will start out with a low amount like $50-100 just to see what it’s all about.
If anyone reading this actively lends people money on Prosper, leave me a comment with your experiences. I’d love to know it you can make some extra money doing this.
You do realize that you are just making prosper.com richer? Try trading options or something. I think being a lender on prosper.com is a big waste of time…
my .02 cents
I’m a prosper lender with a portfolio of over 100+ loans. My net return right now is over 10%. I think Prosper can be a great investment vehicle. Look at some of their historical default rates though. I’d stay away from E and HR rated borrowers unless you have confidence in that person’s listing. But, AA-D rated borrowers are all pretty good. There’s a lot more credit data now. I look for people who have lots of credit lines, a long historical credit track record and no current defaults. Then if they are a validated owner of a house and in a 4-5 star group, even better. Hope that helps.
wtf - How is trading options any safer? or more profitable? There are fees involved in that, and you’re also making a broker, or Charles Schwab richer.
Steve - thanks for the comments. That’s more what I was looking for. Someone with experience doing it.
If anyone else is a lender, please share.
It looks really interesting to me. Don’t think wtf knows wtf he is talking about. Most standardized investments have brokers taking a cut at some point including derivitives like options which can expire and you can lose your entire investment.
I don’t have time for it now, but a glance at the site seems to show that they are basing rates on credit risk like any other lender. If you stay diversified, you could make a nice income.
Another great service that is only available to US residents =\
Allen.H
It seems like a very good service. However, there is always the risk of someone not paying you back and that is something that I sort of wish Prosper had someway to monitor. If you don’t pay a bank back, you lose your stuff. But this way, people can scam you out of money left and right and really there is no penalty. There should be something that Propser is allowed to do.
Jacob. Prosper has collection agencies just like banks, and they can ruin your credit too.
I have been a lender for a few months, and the thing I like about it is, that I can choose my level of risk. I think that it s safer than options/stocks.
If that’s the case, then I might have to think about going in and doing a little lending. Not much at first, but maybe set aside $100.00 as my initial investment and then just use the profit I get to build up a small little lending empire. :-p
With the click of a mouse late Thursday night March 1, 2007, the leader of the Two Millionaires Group on Prosper.com admitted the 5,509th member and created the largest group on Prosper ever! The one remaining challenge at the time was to beat PsychDoc’s record number of loans created….
Asked about how his group succeeded in growing so large so rapidly, “TwoMillionaires1″ the group leader replied that he did a lot of internet marketing in the beginning to bring new members in, and it grew from there to the point where today word of mouth from contented borrowers brings in probably hundreds of new members each week.
“It didn’t hurt either to have a private website that has attracted more than 300,000 hits and 10,000 unique visitors,” the group leader added.
As of the date of this report, more than one and a half million dollars has been loaned to members of this popular people-to-people online borrowing and lending group, almost 400 individual loans.
Details are available at:
http://www.2mils.org
I’d never heard of the site until I read your post. Opens up a whole new realm of interesting possibilities, both on the lender and borrower side. I’ve done private mortgage lending to investors for a few years now, but this could be a new area to experiment. Love the business model…