Comment Re:OK, Sell me. (Score 1) 261
I have been lending at Prosper for a couple months. I've invested $1600 over 32 loans at $50 each. I have been choosing my loans carefully based on specific risk criteria I set up for myself. My average interest rate is 16.67%, and my default rate is estimated to be 1-2% (based on years of accumulated data from credit agencies). This means that I am very likely to have one of my loans default. At the end of 3 years, I'll walk away with $1980 after taking out the defaults and the fees.
That's equivalent to a 7.9% annual interest rate at a bank, and doesn't even take into account any additional money that would be made if I reinvested the interest into new loans. Which I do.
Plus I like the fact that my money is helping other people - it's not just sitting in an account making banks richer. That's added value you can't tag with an interest rate.
That's equivalent to a 7.9% annual interest rate at a bank, and doesn't even take into account any additional money that would be made if I reinvested the interest into new loans. Which I do.
Plus I like the fact that my money is helping other people - it's not just sitting in an account making banks richer. That's added value you can't tag with an interest rate.
