Are there any bad experiences with Prosper?

Has anyone had any bad experiences with the online lending company Prosper Lending? I have read all the praises and accollades that they have received but I need to hear about the problems, if there are any.

Are there any bad experiences with Prosper?commericial loan

I%26#039;m looking at it too.

It%26#039;s not a bad thing to take business from a high priced lender if you are willing to accept less...but there is a valid reason those lenders were charging so much.

Pay close attention to the their portfolio plans and the information on the collection agency should an underlying borrower default--they give historical information on the fact that borrowers WILL default just like they would with a bank.

Many of the borrowers are in over their head with debt to income ratios of 50-60-70% or more! Yes, shifting 30% credit cards to 20% will help, but if they can%26#039;t pay the principal, they will stiff Prosper as well. Prosper states that if they default, it goes to collections and you will get a share of whatever money is recovered.

I haven%26#039;t figured out yet how long loans are for. If a typical loan is, say, 5 years, it will be a long time before you get all of your principal back. If you mentally treat it as 10% interest, even if 20% is showing up in your account (you have to pay taxes on the 20%) you won%26#039;t feel so bad if someone defaults (the defaulted principal is a capital loss on your tax return)...which is why Prosper recommends doing $50 loans per person to spread your risk around as much as possible. This sure beats being an owner of securitized subprime loans.

I suspect credit problems will be worse next year and defaults will be higher. People who used to refinance their homes to pull out equity and pay off their credit cards can%26#039;t do it as easily now.

And some of the stories are the kind you%26#039;ll shake your head at. %26quot;Hi, I%26#039;m a great borrower (as shown by their AA credit rating). I want to borrow money to buy a car before I go back to school.%26quot; Huh? You want to borrow a lot of money, quit your job and have no income? Riiiiight.

And some of these folks have 30 lines of credit open and most of them are maxed out. I have a whopping 2 credit cards and pay them every month.

The plus side? There%26#039;s less risk than lending to some of my relatives. My savings account only pays 2% and my very safe investments have been paying 5%. Lending $1,000 or $2,000 and averaging 10% (medium risk) would be an extra $100 for me and might make a difference on an AA/A/B/C grade borrower being able to get ahead.

Are there any bad experiences with Prosper?

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I have been a small lender with Prosper since April of 2007. I have lended about $125 to ten separate loans. I have been paid every month since May. Each payment has part of my principal and interest. I consider Prosper as an on-line marketplace dealing with money. Prosper is also known as the eBay for money. Personally, I look for borrowers who have at least a B credit grade or better, no delinquencies or bankruptcies in the past, home ownership verified and a bank account verified. I like to fund business loans and try to get the request at least at 15% interest. Some of the reasons why certain loans do not happen is because: too many expenses listed, request reasons are not sufficient, too many delinquencies. Personally, I stay away from Personal Loans, Home Improvement Loans, Real Estate Buying, and Debt Consolidation. Prosper has been in the news many times and published in several magazines such as Newsweek and Money. I get on-line statements every month from Prosper and yes I will be claiming my interest on my taxes. I am quite pleased with Prosper. I just read v b%26#039;s answer and I would like to add the following. Borrowers can request up to 25k (the max) and have three years (max) to pay it back.