Prosper.com

Last night I read an article about this site, and I believe Facebook also has a similar lending site.  Supposedly, it is people loaning money over the internet to other people, and no banks are involved.  It is becoming quite popular, as you can sign up to be a lender or a borrower, depending on your situation.  I could not believe I had never heard of this place.  It seems that it may be a good option for people who are looking to consolidate credit cards but may not qualify at a lending institution.  Do you have any experiences to share about this site?

I have looked at the site several times, but have been too scared to touch it with a 10 foot pole.  It seems like a great idea as long as everything goes smoothly.  But what happens when someone doesn't repay a loan?  Does Prosper provide the collections work? 

There needs to be some means for the "lenders" to persue action, but at the same time I don't want Uncle Johnny, who lent me $500, to show up at my door with a shotgun.  Has anyone here used them before?

It's amazing the answers you can find if you just look. ;-)  This actually doesn't sound too awefully bad.  I couldn't find if your personal information is shared with the lenders.  I'm assuming not.

What happens if a borrower does not repay their loan?

Borrowers who miss payments on Prosper face the same consequences as they would if they miss a payment with any form of bank credit including the reporting of late payments to the credit bureaus. Borrowers also incur late fees, which are collected by Prosper and passed onto the people that loaned the money.

When a borrower's payment is late, Prosper communicates directly with the borrower to encourage repayment. After 15 days, Prosper notifies the borrower's friends and group leader of the late payment. After 30 days, Prosper engages a nationally-licensed collection agency, giving borrowers 90 days to bring the account to current. At more than 120 days past due, the loans are sold to a debt buyer. At that point, the borrower's credit report is negatively impacted with a default and they are banned from borrowing on Prosper ever again.

Believe it or not, imitators are sprouting up all over the world. Prosper has started something. If you do a search in google for this type of company, I bet you find at least a dozen.

when something new and profitable apears a lot of people try to copy and many of them are dangerous.Prosper is an interesting programe that worsk something like an online bank and they check their clients really deep and have drastic rules.I haven`t tried it but you never know...

This sounds a little like the community bases "micro-lending" system they began in a couple of third-world countries to help them out, like North Africa or India etc. Some guy from Australia won a Nobel Prize for setting up his original micro-lending system back then.

With the original system, basically people put in money to lend to others to give them a helping hand. The uses had to be VALID (i.e. showing that they're buying stock or crops or tools to increase income or increase food production) They pay the money back interest free when they can so the micro-bank has the funds to lend to others and keep the cycle going.

Of course after checking out prosper.com, the reasons for US people wanting the money no longer seem so logical. Everyone on the site is begging for money to repay their own silly debts.

I don't know about this. I think that people who do this, are playing with fire. I would also think that this would be illegal?! But I assume that it is not, though I'm sure it soon enough will be.

 

It is not illegal as the online lending program is based in a state where this kind of activity is legal. Plus, you are soliciting them for a loan which makes it legal in all 50 states. As long as they don't actively solicit you to take a loan, they aren't breaking any laws.

Here is an example of how that works. When I was a lender (in NV), I could not make loans in any other state with one exception. If the person called me, I could do the loan. I had several CA clients and it was all legal.

I don't know about any country other than the US. If memory serves, the info on prosper is simply informative and educational and non soliciting.

Great ! Where do I sign up and how much can I borrow ? Refi my house and consolidate my debt and I will be a new man. My chances ?

I have a loan through Prosper.com.  Last July, I was invited with short notice to speak at conferences in  Gold Coast and Sydney, Australia about how to hire a writer, to about 500 people within my target market.  If you've ever looked at plane tickets to Australia, you'll know that it's not cheap! LOL in fact, I paid $5000 in two round trip tickets from NY to Australia.  I still had to have money for a hotel for part of the stay (my client gave me their condo over looking the ocean for the other part of the stay!) and I needed cash for food and cabs, trains, etc.

The entire trip was around $8000.  I didn't quite have enough to make it work but couldn't pass up the opportunity to go (I'm glad I didn't because my business skyrocketed upon my return).  I got a $2,000 loan through Prosper to help make it happen.  As a self-employed individual, it's hard for me to get credit because I'm not yet established as an LLC or other business entity- and the banks don't accept bank deposits as proof of income.  Prosper did, as well as a very thorough check into my credit history, retirement accounts, and I was even asked a number of questions by potential lenders to help them feel good about their investment with me.

Prosper takes the money each month directly from my checking account.  If I want to make prepayments, I can without penalty.  When my loan is paid off, and my finances are in a better position, I totally plan to become a lender with the site. I think it's a great idea and since lenders get to place "small" loans with a number of different borrowers, you spread your risk out.