A new loan funded this afternoon (#5989 — PAYING OFF CREDIT CARDS AND HOME IMPROVEMENT — $22,000 14.55%).  I participated via my standing order: High DTI — NAF.  Which is this loan was funded as high debt to income ratio and was a non auto-funding loan. 

Here is the credit of the borrower and the listing:

For the readers that believe in reading the actual description without modification:

******Description*******

HELLO IT’S ME RAMIZA AGAIN….I KNOW THIS IS MY THIRD LISTING. THE FIRST TWO WERENT THE RIGHT AMOUNTS. BUT THIS IS MY LAST LISTING AND ITS THE RIGHT AMOUNT. SORRY IM NEW TO PROSPER. MY HUSBAND HAD SAID THAT HE WOULD PAY OFF MY CREDIT CARDS FOR ME SO I REQUESTED A SMALLER AMOUNT BUT NOW HE CHANGED HIS MIND AND SAID ITS EASIER IF WE WERE TO TAKE OUT ONE EASY AMOUNT TO PAY OFF EVERYTHING AND THEN MAKE ONE BIG PAYMENT TO PROSPER EACH MONTH.MY MONTHLY INCOME NOW IS $3,200 WHICH CAN BE VERFIEDMY TOTAL DEBT IS: $15,084
CAPITAL ONE                 $6,400 MONTHLY PAYMENT: $170.00
CHASE UNITED               $6,000 “                                 $189.00
CHASE                            $2,300 “                                 $68.00
CENNTINAL                      $170 “                                   $30.00
CAPTIAL ONE                   $214 “                                   $20.00 MY TOTAL MONEY LEFT OVER FROM THE LOAN IS: $6,916$6,916 WOULD BE USED FOR HOME IMPROVEMENT BATHROOM: TOTAL COST $2200 WHICH INCLUDES EVERYTHING FLOOR, PAINT, NEW BATHTUB, TOILET, AND SINK.KITCHEN: TOTAL COST $4000 WHICH INLCUDES EVERYTHING FROM PAINT, FLOOR,NEW APPLIANCES, AND NEW CABINETS.MY BILLS:
HALF THE RENT: $400
CREDIT CARD: $500
CELL PHONE: $125
CAR: $245
PERSONAL: $300
INSURANCE: $145
ABOUT $1500LEFT OVER PROSPER LOAN SO LOAN WILL BE PAID OFF BY LESS THAN 3 YEARS  

******Description*******       

I think this is another fine example of a quality standing order borrower and interest rate.  What do you think?

I think this is another fine example of a quality standing order borrower and interest rate.  What do you think?

• Prosper.com Loan Listing Rates That WILL Get your Loan FUNDED

• Prosper Delinquencies Improving

• Auto-funding vs Non-auto-funding

• Prosper Group RateLadder Update

• One Tip Prosper.com Borrowers Ignore That They Shouldn’t

• Credit, Charge Cards Trading Cards Collectibles

• Home Security Home Improvement

• Tools Home Improvement

• Safes Home Security Home Improvement

• Generators Home-Use Tools Home Improvement

OK so first of all…  Everyone has heard of a a CD Ladder, right?  This is where you buy your CDs so that expire at intervals.  This ensures an average interest rate and continually available funds.  Typical CD Ladders are 1,2, or 5 years long.  Don’t ask me why but 3 and 4 year CD Terms are hard to find.  CDs are very safe.  and the interest rate is 2-6% depending on many factors, but generally on the current interest rate climate.

Prosper.com loans are always 3 years in term.  With a minimum lender loan portion of 50$.  That means you can have a portion of many loans with even a modest ladder amount.  (I have 44 loans with 2800 invested.)  By taking a large number of small loans you average your risk and avoid single defaults throwing off your expected return on investment (ROI). 

As loans are paid and the money is recycled into new loans, not only are you further diversifying but also extending you 3 year rate ladder.  The problem with most ladders is that you have to wait at least a month and as much as a years to create/invest in a full ladder.  With Prosper.com the process is continuous.  All loans will have payments on possibly any day, so predicting when you will have money is a little difficult in the absolute, but that is the beauty of it.  As your loan portfolio grows your monetary throw off (or reinvestment) also grows.

To illustrate my example please see see the following grid. year (1 for current), middle yearly account value, and right is monthly throw off.  This graph assume a 12% ROI.  After 10 years my 2800 will be throwing off $339 assuming I pay taxes elsewhere and that I don’t add any additional money into the pool.  That’s 12% of the current value in monthly throw off. Sweet!

• Prosper.com and Your Emergency Fund

• Capacity is Not a Problem with Prosper.com — Invest 10K in 1.5 Months on Nothing but Great Loans.

• Reduced Required Rates by 0.5% for All Standing Orders with Rates Greater Than 15%

• Have Prosper or Personal Finance Blog with Prosper Posts? Let’s do a link exchange.

• Zopa CD Drops to 4.5%

• Current Year, Next Year Calendars Paper Collectibles

• New Year Holiday, Seasonal Collectibles

• New Year Holidays Postcards Collectibles

• Heart Rate Monitors Monitors Pedometers Gym, Workout Yoga Exercise Fitness

• 1980-Last Year Calendars Paper Collectibles

Think the best long term solution is Standing Orders.  Standing Orders remove any emotion from the decisions as to which loan to invest. You can setup your standing orders and fire and forget.  If you standing orders are optimal then you should be able to get into every loan that meets your criteria.  Assuming you have enough money.  I intend to devote several posts to my standing order strategy, but for  now lets just cover the basics.

As I see it the only benefit to manual orders over standing orders is that with manual you can choose when to invest your money.  For example, you could choose to invest it only in loan that have less than 1 hour remaining.  With automatic funding loans this doesn’t matter quite so much as bidding stops the moment that they are funded.  All other criteria other than length of time remaining is available in standing orders.  Some future post will be dedicated to calculating the lost interest by having my money tired up in a standing order with multiple days till funding. 

I personally use 10 standing orders.  5 for auto-funding loans and 5 for non auto-funding loans.  I will dedicate a post to each int he future.

• Auto-funding vs Non-auto-funding

• How to Switch to AmSher for Prosper Collections

• Reconsidering Manual Bids

• Automatic Prosper

• New Standing Order Prosper Lending Strategy

• Standing Liberty 1916-30 Quarters Coins US Coins Paper Money

• Long Life Light Bulbs Home Lighting

• Fire Escape Ladders Home Security Home Improvement

• Long Island New York US State, Town Views Postcards Collectibles

• Fire Pits Outdoor Cooking Eating Yard, Garden Outdoor Living

I have $350 that is either pending review or a winning bid.

Standing Orders 2 at 14.75% 

Pending Review 5 at 18.79%

• P2P Lending in Miami Hearld

• Top RateLadder Referrers

• Prosper.com 1 Sigma Listings

• Lending Club and Zopa Use the Same Payment Platform

• Starting a Business w/ Proven Results — Pimp My Listing #2

• Standing Liberty 1916-30 Quarters Coins US Coins Paper Money

• Trade Dollars 1873-85 Dollars Coins US Coins Paper Money

• Early Dollars 1794-1804 Dollars Coins US Coins Paper Money

• Dollars Coins US Coins Paper Money

• So-Called Dollars Exonumia Coins Paper Money

There is a lot about Prosper.com that I like, but the one thing that drives me insane is the length of time it takes to move money around the site.  Money transferred in takes at least 4 business days in order to be user.  Money transferred from borrowers to lenders takes 4 business days.  Maybe I am spoiled by the instant gratification of the Internet Poker sites, but this seems like it is taking too long.

• New Lender Feature — Rapid Transfers

• The Complete Guide To Prosper.com

• One Tip Prosper.com Borrowers Ignore That They Shouldn’t

• RateLadder IRR/ROI 6/08 Update — 0.57% to 16.64%

• Late Loan #2 is Late Again (2nd month in a row.)

• Swamp Thing Superhero Modern Age 1980-Now Comics Collectibles

• Halcyon Days Decorative Collectible Brands Decorative Collectibles Collectibles

• Paper Money US Coins Paper Money

• Errors Paper Money US Coins Paper Money

• Paper Money World Coins Paper Money

I am in the top 17% of all lenders by amount invested.

Source Eric’s Credit Community.

• #1 by Amount Prosper.com Lender: Pensioner

• Blogging Away Debt Interviews Pensioner (The Top Prosper Lender with over 750 thousand Invested.)

• What Kinds of Prosper Loans Should a Newbie Lender Invest

• Pensioner Debt Sale Results

• Prosper.com Lender Game — leporello Initial Update — (10.04%) to 16.61%

• Credit, Charge Cards Trading Cards Collectibles

12/27/06

$2800 in Principle Loaned

Avg Interest Rate 15.76%

Realized Net Gain/Loss: $32.72

• Money Walks Lists RateLadder.com as an Interesting Prosper.com Blog

• Prosper Interest Rates On the Rise

• Prosper IRR Lender “Game”

• Should I use reddit instead of digg?

• One Tip Prosper.com Borrowers Ignore That They Shouldn’t

• Heart Rate Monitors Monitors Pedometers Gym, Workout Yoga Exercise Fitness

• Point Romance Books

• Point Romance Audio Books

• Hydroponics Seed Starting Gardening Plants Yard, Garden Outdoor Living

• Ball Point Pens Pens Writing Instruments Collectibles

Join me on my Prosper.com journey. Prosper.com is the person-to person lending marketplace. I find the idea interesting and am putting my money where my mouth is.  Along the way there will be occasional posts on anything I see fit to discuss. 

First a little about me… I am 6′10″ played ivy league basketball with an engineering degree in computer science. (So my grammar and spelling excuse is already in the open.) I enjoy reading about technology, Internet, and business in all forms and I love toys. 

I first heard about Prosper.com back in June 2006.  I immediately liked the idea; I wish I had come up with it myself; and started to devise my personal lending strategy.  I signed up in July for a lender account.  I started slowly (only $150 into 3 loans) in July. 

I am starting RateLadder.com with 2800 in principle across 44 loans.  My goal is generate the maximum return on investment (ROI) with the least amount of risk and have some fun along the way.  Join me in my journey.

• My New Site Design

• Prosper Release — All Steak No Sizzle

• Targetable AdSense Experiment

• Prosper Site Upgrade — Not Smooth

• Prosper.com Site Down

• Hard to Find Romance Books

• Putting Greens Aids Training Aids Golf

• Journey J Rock, Pop Music Memorabilia Entertainment Memorabilia

• Hard to Find Romance Audio Books

• 1-2 Person Tents Tents Canopies Camping Hiking

A WordPress directory sounds very cool!  Read about it here: Easy WordPress.

I have been thinking of getting RateLadder.com included in the Easy Wordpress Directory.  Do you think it will help?

I need to have a link to Easy Wordpress Forum

It seems like a cool idea.  Sort of like Yahoo directory or the DMOZ, but only for WordPress Blogs.

• Back From the Brink

• Kiva Loans Paid On time Again, But Don’t Die

• Top RateLadder Referrers of 3/08

• Web Design and Blogs: How Important Is a Fresh Look?

• Yet Another Wordpress Theme Overhaul