I was talking with my friend Mike the other day about how his loans are going with Prosper and realized I haven’t really shared information with the rest of the world. I discovered it quite a while back while researching the world of microlending. Rather than purchasing a goat for a family in Africa, I discovered a whole world of lending going on right here in the US.
I was intrigued by the seemingly incredible rates of return so I tossed a couple hundred into an account and started playing. After I found it actually worked, I told Mike about it and he went whole hog.
While my Prosper account is still under $1,000, Mike has an elaborate system whereby as loan payments are made, they fund new loans and his portfolio just keeps increasing. Neither of us has had anyone default on a loan yet (although he had a couple of late payments.) I think it is because we have both created rather strict guidelines for the types of loans we will fund.
Bottom line is that I am getting over 18% return on my money, which is a far cry better than even the best savings account – and don’t even talk to me about the stock market. Anyway, there it is… for more details you can check out their website, but I have to say I am very pleased so far with Prosper.
I also found a link on the loan that I funded tonight that will give new lenders $25 for signing up.