11/19 Prosper update. I am getting 13.3% on my loans there, but one of them
is now 45+ days lates. If that one is a write-off, as seems increasingly
likely, my ROI will be about 11% over my first year there. Not too
shabby, but we shall see how it goes as this credit crunch thing
plays out. Lately I have been getting better rates, but I suspect
the risk is higher, too.
\_ that is awesome. How much was your initial stake?
and what are your parameters for which ones you invest in?
\_ I am only taking AA, A and B rated borrowers who have a debt/
income ratio under 30%. My initial stake is just a couple
thousand, as I am just sort of checking it out for now.
\_ Who verifies this debt/income ratio?
\_ Prosper does.
\_ How?
\_ How are you getting more than a credit card loan?
\_ The magic of the market? The invisible hand at work? How
do you expect me to answer this question? This is what people
with reasonably good credit are willing to pay to borrow money.
Not AA credit, but B credit, with a low Debt/Income and home
owners to boot. I could get more, but then my default risk
would go up, too.
\_ Maybe people are willing to pay more on the bet that if they
default you are less likely to send them to collections?
\_ No, all defaulted debt is automatically sent to collections.
\_ No, all defaulted debt is automatically sent to
collections.
\_ How many loans have you made over that period?
\_ Around 50.
\_ I looked at prosper when it was first mentioned on the motd. I
wouldn't risk a penny on any of those people. I'm glad you've
made some bucks but your risk looks way higher than the interest
rates these people are paying. There's a very good reason they
can't get money from more traditional sources. |
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