I am quickly losing confidence in what I used to think was a great idea. Maybe there's a reason that these borrowers aren't going to a bank or people they know for a loan?
I made my first loan in June 2006 and wrote about it here. It's been about a year and a half, and since that first one, I've made a total of 6 loans. One defaulted, and I received about $1 from that (on a loan of $51.86). One is considered "late" with $72.51 in principal left on the loan, and one is in collections with $40.05 left that she owes me. On a more positive note, 2 paid off early (an "A" rating and an "E" rating), and one is still current. I will never make back the $186 total that I've loaned over the last year and a half. I'm so glad I was only experimenting and stuck with loaning only what I could potentially lose.
The biggest loss from this experience isn't necessarily the money, though. It really disappoints me that people won't honor their debts. I don't get it. And I won't be putting any more money into prosper.com. I have about $36 sitting at prosper in cash. I will probably transfer that over to Kiva.org and help someone really make a difference in their life. Hopefully that will raise my confidence in humanity.
Friday, January 11, 2008
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4 comments:
Posts like these really disappoint me. I'm a borrower. Prosper was so helpful to me that I find it hard to imagine other people taking it for granted.
I have lent to a couple of borrowers just to test it out. No defaults yet, fingers crossed
I've had the same experiences even though I have been way more diversified, so I hope to come out at least even. Lendingstats currently says 7.75% .. that's despite my average interest rate being 15.95% .. which suggests that 1 in 8 are breaking their agreements. Indeed, delinquent borrowers are really ruining it for everybody else.
Augh, that's so frustrating! I wondered whether Prosper would be a good option for lenders. After your experience, I won't be trying it!
Is it just human nature? It reminds me of these deadbeat tenants we had who simply STOPPED PAYING RENT. They continued to lie to buy time until we could evict them, then stole our fridge.
I guess con artists are everywhere. And unfortunately they seem to outnumber the honest folks. Or maybe I've just lived in New York City too long...
I know how you feel. For the first time, I just transferred money OUT of Prosper.
I have loaned around $1500 over the last 2 years. $500 has been paid back. I've had 2 loans default completely. 1 more is currently in bankruptcy. And 1 more is in collections.
I think I must be pretty bad at picking loans.
I really like the model, but I'm tired of losing money on the thing. I think I'll start systematically transferring $$ out of my Prosper account. I'd be much better off putting it in my IRA.
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