Hey MM,

What is the deliquency rate (if any) on any of your loans so far?

Guest

I have two late payments so far but now every loan is current.

Hi,

So how does this shake out in terms of actual profit $$?

Matt

MM- I opened a lender account with Prosper after reading your posts. Thanks for the info. I've funded 10 loans so far- no payments are due until Friday next week.

Question: In a way, doesn't it benefit us just a little when someone pays late (don't we get part of the late fee?). Sure, late payments may be early warning signs, but I imagine those cash advance shops make a hefty profit off people who always pay their debts, but often are late doing so.

Jon -- yes, we will benefit marginally in a matter of cents (or a quarter). Prosper recently increased the amount of penalty though.

MM - I began funding some loans back in May after reading your post and doing some research. The $200 I have invested qualifies me at position #2623 on Eric's Credit Community. I tried to keep my loans low-risk, but I already have one late borrower. Thanks for providing such great first-hand information, as well as access to resources such as Eric's Credit Community.

Have you been looking into Zopa at all? I think they are planning to make their US debut this fall. I read that they have ~ 50,000 users in the U.K.

How do you risk-adjust the portfolio? Do you use publicly reported default rates for given credit scores?

Separately, I note that the rates you charge seem higher than rates you can get from a typical bank. Why do you think consumers use this site as opposed to a larger lending institution.

I'm curious how you're getting such good rates. I've been lending since early May and rates have been steadily dropping since mid-June. 13.6% on a AA borrower is impossible these days... Most close around 8%, depending on requested amount, and even getting C's at 13.6% is tough... Unless it's a large amount (>5K or so), most seem to close around 12% or better. I've been finding that it's tough to find loans where you're risk-adjusted return is greater than 8-9%.

Herb, just follow my loans at this tracking page:

http://www.ericscc.com/index.php?page=member_detail&sn=bestbuy

Discipline is needed when you want to maintain high rates, although i agree the competition drives rate down too.

I am retired from the finance industry. I don't understand how 100 micro loans can make money. Perhaps I'm missing something. I want to borrow $8000 and prefund the first 24 monthly payments at 22% or better! Anyone?

The economic value of user contributions to Internet sites..