I have been searching for a way to make money, or more exactly, make my money make more money. Prosper.com seems to be a cool way to do that. Prosper is a peer to peer lending system. Unlike peer to peer file sharing systems that this one is legal, safe, and productive.
People with money they want to invest create an account for free on Prosper. The financial and ID information is verified through your bank and by faxing photo ID and tax information. Once everything is confirmed you can transfer money into your Prosper account. The loans people have applied for and were accepted are posted on the lending page.
Information on the borrowers is available to members (free), that includes credit score, delinquencies, credit card usages, lines of credit open, debt to income ratio, and how many times their credit score has been requested.
The borrower also posts what the loan is for and how they intend to repay it. Most borrowers post their income and how the loan will benefit that.
Prosper has all the performance data (important to me) regarding the number of defaults in each credit catagory. The numbers are suprisingly low. Click here for perforance data on all the loans.
In total, Prosper.com has a total of 460,000 members and has loaned out 92,000,000 million dollars. That seems to lend some amount of credibility to this institution.
Zorpa is a UK based p2p lending system that pioneered the concept. They are currently building a site for the US market. Zorpa has some interesting investing ideas that I am going to write about later on.
My Personal Finance Blog has some great analysis on Prosper.
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