If you used the Prosper peer-to-peer lending service in the past, you’ll be happy to know that they’ve significantly enhanced many features of the service and are now accepting new borrowers and lenders. Using Prosper is now safer and more convenient than it’s ever been, making it an even better source of alternative investment opportunities.

Improved Security

Some of the most significant improvements to the Prosper service include better security, which means lenders can feel more secure about their investments. For instance, borrowers will now be provided a range from which to choose their rate, thus lowering the odds that they are not pricing their listing properly. With this new method lenders will find prices that are commensurate with risk. Also, for borrowers seeking their first loans, they must have a credit score of at least 640. This new listings system ultimately results in better returns to lenders, since they are of generally better quality.

Specialized Auction-Like Bidding System

Prosper uses an auction-like system to match borrowers with lenders. Using such a system, lenders can exercise enhanced control over their yield. Lenders have the ability to carefully specify their bidding choices thanks to a highly active auction market and detailed credit information. The auction system now also has a solid minimum bid per listing, which keeps the possibility of a lender mispricing to a minimum.

Prosper Ratings: A Better System for Risk Rating

Prosper was instituted a new rating system called Prosper Ratings. This new and in-depth system gives them the ability to make consistent ratings of listings and provides a proportional link between the estimated loss rate and the rating. Every listing that shares a Prosper Rating will also share the same range of potential loss rates. Looking at the records shows that with a Prosper Rating between AA and B had average returns of 7.13%. These strong returns go to show that direct person-to-person lending is a feasible type of asset for investment.

Improvements to the Portfolio Plan

Browsing through the complete index of listings can be arduous work that takes up a lot of time. Fortunately, Prosper provides a way to help those who lack to time to spend hours browsing listings. Building a portfolio plan allows you to set certain conditions under which the system will automatically bid on a listing. You can construct this plan on your own, or use one of Prosper’s pre-set plans. Both types are simple to set up. Portfolio plans are powerful tools to build your portfolio and find listings that match your preferences without having to pick through them one by one.

Trading of Current Loans

There are more great new features. Thanks to the new Note Trader system, you now are able to purchase, sell or swap notes. Prosper has partnered with Folio Investing to power this new change. This gives lenders the power to liquidate their investments before the 3-year term is up. Also, notes can be bought that are linked to loans you didn’t get a chance to get in on when they were first presented. Any note that was given out after July 13, 2009 is available for trading with the Note Trader system.

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