In my Friday post, I encouraged everyone to think for themselves when it comes to estimated return guidance. It is after all only an estimate. Today, I would like to pimp a listing I have bid on that I feel demonstrates a great return loan, but it is a fairly risky bucket.
There are 2 things about this loan that Prosper is not counting or discounting.
The first is that this person has 0 current DQ. The bucket says 0-1. All the rest of the extended credit is VERY clean as well.
The second is that this is only a $7,500 loan; whereas the bucket extends all the way to $25K.
This is an autofund loan and therefore you will not receive anything lower than the current rate.
Here is how Prosper break it down…
19% Rate
(11.23%) estimated loss
(0.84%) adjustment
(1%) servicing fee
———–
5.93% estimated return
To be sure a 5.93% return is good, but I am not lending on Prosper to receive a 6% return. However, I still bid on this listing. I bid because I think the estimated loss for this loan is less that the average loss of the bucket into which it was placed. Therefore, the estimated ROI will be greater than 5.93%.
What do you think?
Welcome to the 5th installment of Pimp my Listing. I have placed a $50 bid at 19%.
This is a C Credit Homeowner with super clean extended credit. Requesting a loan of $7,500 at 19%.
$25 Bonus For New Lenders
How to Use Prosper Listing Widget for MySpace, Blog, Website, or Other
Purpose of loan:
This loan will pay off high interest home improvement credit cardsMy financial situation:
We are a good candidate for this loan because we are hard workers and always work very diligently at paying off our debts on or before time. We are working part time jobs as well so we can be debt free except for our house payment in 4 years. This is our goal and we will not stop until we make it. We are a good family and always very grateful and appreciative of everything that comes our way. We always do what we can to give back what has been given to us whether it is just time we have volunteered or in this case a loan to be paid back. We would like to thank you in advance for your help.Monthly net income: $
I could not find an area to add my spouses income so I will show it here as well.
My Net = 3375.00
My Spouse = 2450.00
Total = 5825.00Monthly expenses: $
Housing: $ 1550.00
Insurance: $ 143.00
Car expenses: $ 1305.00 includes car payments
Utilities: $ 335.00
Phone, cable, internet: $ 140.00
Food, entertainment: $ 400.00 Clothing, household expenses $ 300.00
Credit cards and other loans: $ 1000.00
Other expenses: $ 100.00 dance and sports for child
Related Posts -
Prosper Returns Beat S&P 500 I received an email last night from Prosper claiming that "Prosper Beat the S&P 500" Did you know that the average loan on Prosper is outperforming the 2-year return on the S&P 500? Smart lenders like you have already discovered that lending on Prosper is a great way to earn...... -
Capacity is Not a Problem with Prosper.com -- Invest 10K in 1.5 Months on Nothing but Great Loans. I have often wondered if the large lenders have any capacity problems. That is, do they ever find it hard to find loans. I asked pensioner that very question at Prosper Days and his response was, "I moved $750,000 into Prosper in a month and a half, so I would...... - Propser and the Greatest Economic Crises America has Ever Faced? Prosper just released it monthly survey and it included commentary from CEO Chris Larsen. What do you think, is this the "greatest economic crises America has ever faced"? (For my part there is no doubt it is in my lifetime, but I don't see this getting to the level of......
-
New Loan Funded #5989 -- $2850 in 45 loans 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...... - Major Prosper Update -- Just in Time for Prosper Days  Prosper's First Anniversary First of all, let's take a moment to celebrate. On Feb 5, Prosper turned one year old. In our first year, exactly 7048 loans with a value of $35,166,711 were made on the Prosper marketplace. If you're coming from the perspective of a massive bank, $35M might......
Related Websites -
A Review of My Actual Prosper Account I have mentioned in the past that I really like P2P Lending, or Person to Person Lending. I had previously talked about Prosper, when they brought back lending to New York, and most recently as an alternative source for liquid cash, but I have never given details about my...... -
A Beautifully Simple Formula for Achieving Financial Independence I do my best to avoid complicated mathematical formulas (like the one featured above). In my experience, mathematicians do a great job of taking a relatively simple process and making it overly complex by applying a series of inexplicable formulas. I guess that's why I was happy to run across...... - Can't Pay Credit Cards I caught a great post at Moolanomy last week that described the five stages of financial health. The first stage, which Pinyo labeled "The Debt Spiral," is an especially tough one to move beyond. Over the last few months of writing about personal finances I've received several emails from......
- My 25 ways to save money-the small things add up! Dawn over at FrugalForLife has a great article up on 25 ways she saves money..and other people have been adding their lists as well. I figured I would sit down and write out the ways that we try to save money, especially now that I quit my job the other......
- Prosper and high-risk loans Jonathan over at My Money Blog posted on the possibility that returns on Prosper.com will drop as defaults increase. (Prosper.com is a site that facilitates person-to-person lending, giving borrowers a competitive rate by pitting lenders against each other auction-style.)Up until a couple of months ago my loans were performing well,......
- Individual Cards Pokemon Animation Trading Cards Collectibles
- Return of the King Lord of the Rings Sci-Fi, Fantasy Trading Cards Collectibles
- VI:Return of the Jedi Star Wars Science Fiction Collectibles
- Cotton Bucket Hat Hats & Gloves Clothing, Shoes & Accessories Fishing
- Cards Christmas: Current (1991-Now) Holiday, Seasonal Collectibles
Categories:
Features, Goals, Listing Review, Prosper.com, Statistics, Strategy, Tools
Tags:
7 comments ↓
Nice listing and a great idea about catching good listings that fall into bad buckets. The only drawback that since it did fall in a bad bucket that it would not get funded.
I am also going to use this opportunity to gripe about lenders giving advice. They will just remove any chance of making a profit here.
When they tell borrowers not to close their paid of CCs because they will lower their credit scores. As a lender I do not want my borrowers tempted with a ton of credit cards.
What got me on this tangent is the lenders comment in the Q&A of this listing:
“You should consider relisting without the auto-funding feature. It will lower your risk profile and improve your likelihood of funding.”
What the hell is he thinking? Why not suggest to raise their rate to improve likelihood of funding?
I couldn’t agree you you more… How about more interest not less…
and yes I agree good loans in bad buckets will reduce the liklyhood of funding… Thi might be a strategy for one of the large active lenders.
I agree with your pick here. If I had $50 in my Prosper account right now, I would bid on it. Right now I have exactly $48.06…hehe. I take that back: I just noticed it has already ended. This is the type of listing that falls through the cracks and that is exactly why I will never use the standing order or the portfolio plans.
“You should consider relisting without the auto-funding feature. It will lower your risk profile and improve your likelihood of funding.”
Don’t get ticked at someone for trying to do the borrower a favor. If not enough people bid because of the AF, then no one wins. He can keep his same interest rate, without the AF and get funded.
Well the borrower did relist with noAF. The borrower said in a Q&A that “choose to run the full 7 days to get a better interest rate” but they closed the listing to moment it got funded. Looks like just another desperate AF borrower. Rateladder why did you not bid on the second loan?
Well… I think I did not have $50 in cash or my SO would have.
Now that he re-listed and closed early I am no longer as gung ho about this guy…
When I thought it was a 1st listing AF I liked it a lot more. You know naive borrower and all.
Ways to Get the Best Home Mortgage Refinance…
At one stage during the life span of a mortgage, the idea of a home mortgage refinance may prop up. When this situation is laid open to you, the most excellent concern should be getting the most out of the transaction….
Leave a Comment