Rate Ladder

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.

• Please Close Major Loophole for Deadbeat Lender/Group Leaders There has been a minor uproar on the forums over deadbeat lenders/group leaders.  That is to say, Prosper.com members that are lenders and borrowers with late payments on the loan given to them.  The consensus seems to be that Prosper should be impounding the loan payments they are receiving in......
• Prosper IRR Lender “Game” Mar 07 Update It is time for the March 2007 update of the IRR Lender “Game.”  This is going to be more about accomplishments during the last month rather than pure calculations.  So without further ado: Highest IRR Model: epetroel 8.07%  Largest IRR Model Improvement: LazyMan by going from 1.06% to 5.62% he improved 4.56%.  Lowest IRR Model: Leporello......
• Prosper.com Lender Game — Retireme99 Initial Update — 10.16% to 14.88% Retireme99 wrote his own intro: I started lending in May 2006... let the money sit for awhile to see how it worked... then got back into it more actively recently.  Looking at my results I have been happy that only two loans have gone 1+ months late.  I have another......
• Money Walks Lists RateLadder.com as an Interesting Prosper.com Blog I was looking into my Google Analytics statistics from 1/9/2007.  (I made it to the 3rd page of Reddit and stayed most of the day with my story Using Prosper.com for Your Emergency Fund - 312% improvement over CD Ladder). 90+% of my traffic came as a reddit referral.  I......
• Prosper.com Lender Game — epetroel Initial Update — 12.71% to 15.87% epetroel is the creator and operator of the highly popular Eric's Credit Community.  He was a fellow presentor at the Prosper Days Thrid Party Application Showcase.  He is an asset to the entire Prosper Community.  epetroel Date Model IRR Best IRR Avg IRR 2/16/07 12.71% 15.87% 14.29% Date Cash Flow......

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http://www.pertuitydirect.com/docs/launch_press_release.pdf

Pertuity Direct Launches Next Generation Social Finance Platform

Company Brings Together the Advantages of Capital Markets, Social Networking and Traditional Banking

Vienna, VA, January 22, 2009 – Pertuity Direct, an online consumer financial services company built on the foundation of mutually responsible banking, today announced the launch of its next generation social finance platform. Pertuity Direct’s platform enables borrowers and lenders to come together in a social lending network to obtain smarter financial solutions and better rates. Through the National Retail Fund, members have the potential to earn competitive returns via a regulated investment fund.

By eliminating the traditional bank as the middleman, consumers can now get better interest rates than they would typically experience with banks or credit card companies. “Our model is unique in that it combines the benefits of social lending with the strong underpinning of credit risk management, and privacy” stated Kim Muhota, CEO of Pertuity Direct. “For borrowers, Pertuity Direct does not require any public posting of personal credit information, and for lenders, there’s no bidding, researching or guessing involved. We make the process quick, safe and optimal for both parties.”

Investments are made through the National Retail Fund, a social lending mutual fund that combines lenders’ capital to fund a diversified group of approved and credit worthy borrowers. The money is lent to a large group of borrowers through the fund, and as such creates safety of automatic diversification of investment. Unlike with other social lending models, lender money is not tied up for long periods of time, nor is liquidity tied to individual loan repayment. The National Retail Fund provides liquidity through quarterly share repurchases. Currently, two funds are available via the National Retail Fund: National Retail Fund II and National Retail Fund III. Further details on both funds can be obtained in the prospectus.

“By investing in the National Retail Fund, a lender’s money goes to work immediately at account opening, and funds are deployed to available borrower loans without delay,” said Andrew Rogers, Chairman of the Board and Treasurer of the National Retail Fund and President, Gemini Fund Services, LLC. “With this approach, lender money does not sit idle until suitable borrowers are found and the bidding process concludes. This model makes the social lending process easy and efficient for the investor, and beneficial to the high credit quality borrower.”

As part of the social finance platform, the company offers a ‘Pertuity Bucks’ rewards program to lower or eliminate borrowers’ principal loan balances. Borrowers are given the opportunity to tell their story when they apply for a loan and update their profiles as their situation evolves. Lenders have the option to browse these stories and can award Pertuity Bucks to borrowers who they find most compelling – for example, those borrowers who return to the website and update their profiles to share successes, such as starting a small business or earning a coveted degree.

Pertuity Direct is founded by executives with extensive experience in banking and financial services, including decades of experience from leading financial services firms such as Capital One, PNC, and E*TRADE FINANCIAL. Pertuity Direct is the culmination of Kim Muhota’s vision to simplify financial services for the main street consumer.

About Pertuity Direct
Pertuity Direct is an online consumer financial services company bringing together the advantages of capital markets, social networks and traditional banking. Pertuity Direct provides a refreshing and compelling alternative to traditional financial institutions. The company has pioneered a fast, easy and efficient platform that brings together lenders and borrowers in an efficient, regulated, mutually responsible social lending network. This is the next generation of social finance that brings the model to the mass and up-market segment that is seeking efficiency, security and stability. For more information, visit www.pertuitydirect.com.

Pertuity Direct is a separate entity from the National Retail Fund. They underwrite and originate borrower loans. Those loans are an investment option for this fund.
The National Retail Funds are offered only to persons residing in the United States, and information enclosed in this document is intended only for such persons. Information should not be considered a solicitation to buy or an offer to sell shares of any National Retail Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. Investing in the National Retail Funds involves several risks including the loss of principal.

Investors should carefully consider the investment objectives, risks, charges and expenses of the National Retail Funds. This and other important information about the Funds are contained in the prospectus, which can be obtained by clicking here or by calling 877-295-6275. The prospectus should be read carefully before investing. The National Retail Funds are distributed by Northern Lights Distributors, LLC member FINRA/SIPC.

• Zopa Shuts Down US Branch Zopa, the UK based peer to peer lending company, is shutting down their US branch due as a result of toughening conditions that are currently being experienced by the US economy. Zopa provides loan services in the UK, as well as in Italy and Japan through a pure P2P style......
• New Loan Funded #6141 -- $2,950 in 47 loans A new loan funded this afternoon (Engagement Ring (Loan #6141) — $23,000 at 27%).  I participated via my standing order: Any DTI -- AF.  Which is this loan was funded as any debt to income ratio and was an auto-funding loan.  The borrow had C credit and 16% DTI. As a reminder......
• Prosper Ordered to Cease and Desist by SEC http://www.sec.gov/litigation/admin/2008/33-8984.pdf It appears to me that the ruling is that they have been selling unregistered securities without a license.  What does that mean for the lenders?   Doesn't the board and company officers have some personal liability too? There is some discussion at prospers.org: http://www.prospers.org/forum/prosper_order_to_cease_and_desist_by_sec-t10903.0.html No one seems sure just yet... SEC: UNITED......
• Track Prosper Referrals with ProProsper Followup Just a quick followup to the Prosper referral tracking with ProProsper.  Here is the email sent to me this morning detailing my active listings... Referral bepmike48     Listing: Guarenteed Money for Simple loan Amt=5000.0000(25.00) CG=A DTI=0.09 Open For Duration Lender Rate=0.0625 Referral bigdog1     Listing: deck and bills......
• New Loan Funded — Try this one more time, group leader, wantabe borrower — $19,500 at 14.34% — AA Credit — DTI 59% A new loan funded (Try this one more time, group leader, wantabe borrower  – $19,500 at 14.34%).  I participated via my standing order RL Overlooked.  The borrower had AA credit, a 59% DTI, and is a homeowner.  This was a non autofunding loan.  As a reminder my standing orders (and manual bids) only......

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Back in April of this year, the Lending Club announced that it would be going into a quiet period due to the beginning of a registration process involving the SEC, the United States Securities and Exchange Commission. Now the Lending Club is pleased to announce that the process has been completed, and now the Lending Club is available both to borrowers and to lenders as well. The Lending Club community is taking a major step forward with this SEC registration, which is also a grand step forward for social lending in general. Because of this SEC registration, the Lending Club is establishing itself as a viable investment alternative to the more traditional set of debt and credit instruments and products that only the larger financial institutions tend to offer.

What this SEC registration means for lenders and borrowers:

- It means that under the registered offer, lenders with the Lending Club will be able to invest in notes corresponding to portions of loans that are made to members who are borrowers. These notes will have stated interest rates that range from 6.69% to 18.63%, once a 1% service charge has been applied.

- It means that Lending club is going to become the first social lending network that gives lenders the option of a trading platform, because Lending Club partnered with FOLIO Investments Inc. On this trading platform, the lenders who become customers of the FOLIO Investments, Inc. Company will also be able to put up notes for sale in the event that liquidity is needed before a note’s term is completed.

- It is also believed that the SEC Registration will significantly accelerate the mainstream adoption of the social lending concept, which will allow more potential borrowers to get the funding they need more quickly.

As a result of the current financial crisis that our economy is experiencing, consumers are beginning to build a great distrust of larger financial institutions. For this reason, consumers are beginning to demand alternatives that allow them to have much more control over their investments and finances. Lending Club is leading the way to delivering this much needed alternative by crafting a network where lenders can fund loans that were posted by borrowers. The Lending Club community continues to show borrowing behavior that is exceptionally responsible, especially over the past 18 months. Since May of 2007, the default rate for these loans has remained below a mere 2 percent.

The prospectus that the Lending Club filed with the SEC is available in PDF format. In a time where the financial landscape is making the concept behind Lending Club even more useful both to borrowers and to lenders, the Lending Club is clearly thrilled that they are once again able to accept business from new lenders as this allows them to facilitate healthy lending relationships between responsible borrowers and responsible lenders, providing a much needed alternative form of borrowing and lending in times of economic crisis.

• Big Lending Club News -- Quiet Period Underway for Secondary Market UPDATE:  After a second reading I think my assumption about the secondary market is incorrect...  (My own hopes for such a market might have clouded my vision.)  It looks like LC is just registering for a license that they think they need to continue working with "lenders": http://www.techcrunch.com/2008/04/08/lending-club-puts-moratorium-on-lending-activity/ I am leaving......
• Lending Club Files S1 with SEC Lending Club has filed an S1 with the SEC (link to S1 filing). It looks to be similar in nature to the Prosper filed an S1 reported here on 10/30/2007. This continues the Lending Club quiet period started on 4/8/2008. Originally I had guessed 7 months to 1.5 years for......
• Lending Club Partners With Alumni Associations The Lending Club blog has posted news that the alumni associations of Michigan, Kansas State and Georgia Tech have partnered with Lending Club to use the LC platform to make or take loans.  I think this is a great idea.  I would gladly make loans to alumni of my alma matter......
• Prosper Files S1 With SEC Here is a link to the Prosper S1 SEC Filing S1 From Wikipedia (here): Form S-1 is an SEC filing used by public companies to register their securities with the U.S. Securities and Exchange Commission (SEC). The S-1 contains the basic business and financial information on an issuer with respect......
• Prosper Marketplace Auctioning Debt The Baltimore Sun is reporting the Prosper Settlement. A settlement for $1 million dollars paid to 20 different states was announced today, with Prosper Marketplace agreeing to the payout after complaints poured in claiming that the peer-to-peer lending service was selling securities that were unregistered. Prosper Marketplace is a business......

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Zopa, the UK based peer to peer lending company, is shutting down their US branch due as a result of toughening conditions that are currently being experienced by the US economy. Zopa provides loan services in the UK, as well as in Italy and Japan through a pure P2P style marketplace. Borrowers would request loans, and then the individual lenders would contribute as much or as little as they wanted to, towards the request. Then when enough funding has been collected, the loan is finally put together and granted. As the borrower pays back the loan, interest earned goes back to the lenders. This micro lending model has made the system popular in the UK and the Italy, and Zopa is soon to open a branch in Japan following the same model.

With the opening of the United States branch, Zopa found that they could not launch the same kind of lending system due to regulatory issues. In order to provide their service, they have teamed up with credit unions in order to provide these lending services. Lenders would park money in CDs with the credit unions, and this would allow their money to sit before borrowers request the money. This would enable the borrowers and the lenders to enjoy the same sort of interest rate benefits as the European users. The regulatory restrictions that were placed upon Zopa would ironically cause the same conditions leading to the closing of Zopa’s United States branch, however.

The same regulations behind the restriction of Zopa’s services are a part of the US economic crisis that has cause interest rates to skyrocket and the economy to experience a great deal of turmoil in the process. With less and less benefit being offered to lenders and borrowers, Zopa was forced to close down the United States branch. US lenders and borrowers will not be completely put out, however. Zopa is directing its current and future US customers to deal directly with the credit unions that it had partnered with.

Despite rumors, the credit unions had not reduced the amount of loans created. Rather, the credit unions has increased the number of loans made as traditional US bank and lending institutes have reduced their volume. Credit unions are not susceptible to the financial woes of Wall Street, and as such are making as many loans as before, if not more for making up the reduction that is a result of the economic crisis. For this reason, Zopa is glad to be able to provide US customers with a viable option that can provide a great service.

Existing customers will be gradually migrated to the partnered credit unions. Individual borrowers and lenders will still enjoy the same interest rates, customer service and federal insurance for CDs made. Payment schedule will also be identical, only payments will transfer over to the credit unions. This transition is made easy since in the US, loans were setup already with the credit unions.

Photo Credits: 1

• Zopa Guarantees Returns 5.1% But the yield is only 5.1%.  Essentially you are buying a 1 year CD in the credit union of Zopa.  Details can be found in the this Wall Street Journal article. FDIC insured guaranteed rate of return.  Yield capped at 5.1% Seems just like a credit union.  I will be glad to have......
• Update On The Deadbeat Lenders -- Prosper Responds Earlier in the week I wrote a post about the lenders and group leaders on Prosper that were also borrowers AND LATE on their loans: http://rateladder.com/2007/02/26/please-close-major-loophole-for-deadbeat-lendergroup-leaders/ Basically I was calling for the impounding of the lender funds to pay loan. Well, Prosper has responded via Prosper Andrew: Hi all,    We're......
• Best Reasons to Use Unsecured Loans Prosper is a p2p lending marketplace for unsecured loans. Borrowers can borrow money up to $25,000 via an unsecured 3 year fully amortized note. New lenders recieve a $25 bonus on entering your first loan. The following is a guest post anybody else interested in a guest post should email......
• Prosper Referral Program -- About Time Ok I admit it.  I have whored out my blog via the Prosper referral program today. I was not paid to do so in anyway except hopefully in referrals.  I felt that this step by Prosper is exactly what the marketplace needed to grow organically and virally.  Therefore, I decide that today was......
• New Loan Funded — Financial Freedom / Credit Card Consolidation — $25,000 at 11.44% — AA Credit — DTI 37% A new loan funded (Financial Freedom / Credit Card Consolidation – $25,000 at 11.44%).  I participated via my standing order RL Overlooked.  The borrower had AA credit, a 37% DTI.  As a reminder my standing orders (and manual bids) only find loans with 0 current delinquencies, 10 or less delinquencies in the last 7......

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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 the Great Depression…)

Here is what the CEO said:

In the midst of one of the greatest economic crises America has ever faced, and on the heels of last week’s Federal Reserve report indicating that for the first time in over a decade consumer borrowing significantly contracted, people are naturally asking what role Prosper will play and what trends we are seeing.

Although it’s a bit too soon to point to Prosper data that correlates directly with the financial meltdown that has only begun to unfold, there are some noteworthy trends that have accelerated since the credit crunch began 14 months ago that are relevant to the current environment.

The biggest trend that continues in the Prosper marketplace since the credit crunch began last summer is that the percentage of borrowers with sterling credit that are listing and getting funded on Prosper remains at record levels (See “Mix of Funded Borrowers” Table). We expect this trend to continue particularly as more lenders on Prosper have become more conservative in their bidding strategies; and as more people, even those with the very best credit, are having their credit card limits reduced and home equity lines cancelled, and are being turned down for auto loans and private education loans.

Another key trend we’re experiencing is that as consumer borrowing from traditional financing sources is shrinking, Prosper is experiencing solid growth. Year-to-date, the number of loans in terms of units is up 24% over the same time period last year, and up 37% in September 2008 compared to September 2007. At the same time, loan originations year-to-date in terms of dollars have increased 8% over the same period last year, and are up 7% in September 2008 compared to September 2007.

At a time when every sector in the economy seems to be under pressure and shrinking, the growth Prosper has experienced is very respectable. However, some may wonder why there is a disparity between unit growth and loan dollar volume growth. The answer lies in the average loan amount being funded on Prosper. Year-to-date the average loan amount is $6,047, down 13% or $925 compared to the same period last year. In September 2008 the average loan amount was $5,544, down 23% or $1,631 from September 2007. This indicates that lenders on Prosper are being more cautious by directing their bids toward listings with lower requested loan amounts.

All of these trends on Prosper are significant and interesting, but far more important in this time of economic upheaval is the opportunity for Americans to revitalize the spirit of It’s A Wonderful Life; to channel the essence of Bedford Falls and George Bailey; and to “do well by doing good.”
 

September 2008 Prosper People-to-People Lending Market Survey

Purpose of Personal Loan Listings and Fundings

Borrowers who post listings in the Prosper marketplace are asked how they intend to use their personal loan. The following reflects borrowers’ statements of intended use of loan proceeds with regard to both listings and loans. Prosper does not verify or confirm after funding how loan proceeds are used.

• Prime Borrowing on Prosper Hits Record Levels -- Febuary Marketplace Survey SAN FRANCISCO--(BUSINESS WIRE)--March 11, 2008--Spurred by the credit crunch, attractive rates, and lender demand for conservative assets, Prosper (www.prosper.com), America's largest people-to-people lending marketplace with over 600,000 members and $120 million in funded loans, reported that the number of prime borrowers (720+ credit scores) creating listings and obtaining loans continues......
• Prosper People-to-People Lending Market Survey San Francisco – October 9, 2007 – Prosper (www.prosper.com), America’s largest people-to-people lending marketplace, today released its September People-to-People Lending Market Survey.  Prosper’s People-to-People Lending Market Survey provides key statistics and a market commentary by Chris Larsen, Chief Executive Officer and Co-Founder of Prosper.   Prosper’s People-to-People Lending Market Survey......
• Prosper's People-to-People Lending Market Survey SAN FRANCISCO--(BUSINESS WIRE)--Prosper (www.prosper.com), America's largest people-to-people lending marketplace, today introduced its first monthly People-to-People Lending Market Survey. Prosper's People-to-People Lending Market Survey will survey the marketplace each month to provide key statistics including: membership and loan volume statistics; marketplace returns; borrower rates; mix of prime, near prime and sub-prime......
• Please Close Major Loophole for Deadbeat Lender/Group Leaders There has been a minor uproar on the forums over deadbeat lenders/group leaders.  That is to say, Prosper.com members that are lenders and borrowers with late payments on the loan given to them.  The consensus seems to be that Prosper should be impounding the loan payments they are receiving in......
• Prosper.com Lender Game -- RateLadder_com Initial Update -- 12.61% to 12.61% I am RateLadder.  I run this website.  I am compelling because you are reading this.  This blog documents my journey and is a more extensive writeup of what I am doing and why than any I could provide in a single paragraph.  I encourage you to look around.  I encourage......

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http://www.pertuitydirect.com/

Just received the following email…

Welcome To Pertuity Direct

Welcome! Thanks for signing up to receive updates about the Pertuity Direct launch.

We have been hard at work for the last two years, building a social lending business that is targeted toward busy people that would like to enjoy the high investment returns and low loan rates of peer to peer lending, but don’t want to deal with figuring out all of the ins and outs of optimizing the process.

We make social lending hassle free:
For lenders, your investment dollars are deployed and start to earn returns immediately
You get the safety of automatic diversification
If you want to withdraw your money early – not a problem, just a few click to get your money back
Our borrowers are rewarded for working hard to maintain good credit by getting approved and funded quickly with great, low rates
Welcome to social lending without the bidding, gaming or guessing. We handle all the work for you. You get all the benefit.

We are just a few short weeks away from launch and are putting finishing touches on everything so that you will enjoy your experience at Pertuity Direct. So stay tuned, we will be coming to market in September and will keep you in the loop.

The Pertuity Direct Team

• Green Note Review /caption] P2P student loans have exploded onto the scene this past year, due in a large part to a lack of availability of traditional loans. There has never been a better time for a p2p site to start offering student loan assistance, and Green Note is one of the newest......
• Pertuity Direct Launches http://www.pertuitydirect.com/docs/launch_press_release.pdf Pertuity Direct Launches Next Generation Social Finance Platform Company Brings Together the Advantages of Capital Markets, Social Networking and Traditional Banking Vienna, VA, January 22, 2009 – Pertuity Direct, an online consumer financial services company built on the foundation of mutually responsible banking, today announced the launch of its......
• New Prosper Forum Becomes Reality ChrisFS called it -- New Prosper Forum.  With the site upgrade tonight Prosper announced a new forum.  Here is the official announcment... Dear Prosper Community, Today we are announcing the start of a new discussion forum system that will replace the existing forums. The forums were established to help guide......
• Lending Club Lender Signup Process P2P lending will change the world! Banks make too much money! In an effort to better understand the entire marketplace, I have decided to signup and start a small portfolio at LendingClub. My screen name at Lending Club is RateLadder... I guess I am just not hip, because for me......
• Big Lending Club News -- Quiet Period Underway for Secondary Market UPDATE:  After a second reading I think my assumption about the secondary market is incorrect...  (My own hopes for such a market might have clouded my vision.)  It looks like LC is just registering for a license that they think they need to continue working with "lenders": http://www.techcrunch.com/2008/04/08/lending-club-puts-moratorium-on-lending-activity/ I am leaving......

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Virgin Money is another the brainchild of Richard Branson, the well known entrepreneur that is behind a multitude of businesses, record labels and projects throughout the world. His belief is that everyone should have access to the money they need when they are trying to get money for a business or even for personal reasons. This is one of the latest entries into the p2p lending sphere and we were interested to see what they had to offer.

Unlike many of the current p2p lending sites, this one does not just focus on personal loans. Real estate professionals, small business owners and regular people can all use the site to get the money that they need. They are also developing a section for students looking to fund their education and these loans will soon be made available as well.

The interesting concept behind this site is that it isn’t strictly a lending community. Rather, it is a resource for p2p lenders and borrowers to take care of formalities and hash out loan paperwork. For instance, let’s say that your Aunt Sally wants to lend you money for a new car. Typically, there may be a little confusion over what kind of interest you would pay, when payments were due, etc… Virgin Money was made to make it easier for Aunt Sally to manage the loan and for you to pay it back.

So, in essence, borrowers will need to do all the legwork to find someone willing to lend them money, and then send them to Virgin Money to complete the deal. This is an interesting concept, and while it may not be as popular as the sites that connect lenders and borrowers, there is still definitely a need for a service like this.

Virgin Money acts as a manager for the loans, to make sure that both parties adhere to loan agreements. This makes it easier for lenders to get payments on time and helps borrowers keep track of everything to do with the loan. Since loans between family and friends do have a tendency to get a little messy, this site should make a big difference.

Quite honestly, we see Virgin Money as being more suited to lenders than borrowers. There is a lot more protection for a friendly family loan when you’re doing it through Virgin Money and they can assist borrowers in learning the ropes. While there are some services for borrowers, the main intent does appear to be to assist lenders in managing a loan.

We did like the fact that they provide legal agreements and help everyone set terms for a loan that are acceptable. One thing that we did not see was information on collections, so this is not clear as to whether lenders are on their own, or if they will have some assistance from Virgin Money.

Bottom line, before you think about lending money out to family members or a friend, it’s probably a good idea to use a service like this to make sure that you are protected.

• Prosper Marketplace Auctioning Debt The Baltimore Sun is reporting the Prosper Settlement. A settlement for $1 million dollars paid to 20 different states was announced today, with Prosper Marketplace agreeing to the payout after complaints poured in claiming that the peer-to-peer lending service was selling securities that were unregistered. Prosper Marketplace is a business......
• Green Note Review /caption] P2P student loans have exploded onto the scene this past year, due in a large part to a lack of availability of traditional loans. There has never been a better time for a p2p site to start offering student loan assistance, and Green Note is one of the newest......
• Pertuity Direct Launches http://www.pertuitydirect.com/docs/launch_press_release.pdf Pertuity Direct Launches Next Generation Social Finance Platform Company Brings Together the Advantages of Capital Markets, Social Networking and Traditional Banking Vienna, VA, January 22, 2009 – Pertuity Direct, an online consumer financial services company built on the foundation of mutually responsible banking, today announced the launch of its......
• Big Lending Club News -- Quiet Period Underway for Secondary Market UPDATE:  After a second reading I think my assumption about the secondary market is incorrect...  (My own hopes for such a market might have clouded my vision.)  It looks like LC is just registering for a license that they think they need to continue working with "lenders": http://www.techcrunch.com/2008/04/08/lending-club-puts-moratorium-on-lending-activity/ I am leaving......
• Rateladder Referral Listing: Guarenteed Money for Simple loan Guarenteed Money for Simple loan This is the cleanest A I have ever seen. I am a little surprised that it is not a AA. Account Verified, DTI 9%, A Credit. CLEAN! Purpose of loan: Supplement stock porfolio for more diversified lending (explain what you will be using this loan......

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CommunityLend.com is still in their beta phase, and has yet to fully launch yet, but they do have some interesting features that are already obvious. Like most p2p lending sites, they are striving to create an alternative to traditional bank loans, but they are also trying to take that to the next level by developing actual online communities both for borrowers and lenders.

The premise of CommunityLend is that the more competition there is for your loan, the less interest you’ll have to pay. This should really appeal to those who are trying to save money on their loans, or have been turned away by traditional lenders. While there information is not yet complete, it does appear that the site will be catering heavily to borrowers.

Lenders however will still be taken care of. We appreciated the fact that they pointed out that only a select few are allowed to take advantage of the benefits of lending in the traditional standard. By creating this type of site, they hope to open up the billion dollar lending industry to smaller investors and groups that are looking for a solid way to make money.

While it is not yet clear if there will be any restrictions for borrowers, such as a minimum credit score, the site does appear to be trying to link up borrowers with very affordable loans. The main focus appears to be on small, unsecured loans for things like paying off a wedding or managing debt, but it could conceivably be used for cars, student loans and other financial needs.

The online community feature is quite interesting and appears to be centered around the goal of bringing charitable and local organizations together online, where they will be able to reach out to those in need. Once communities are created, they are free to get new members to join, and there will be features for discussion, learning and more.

The company has already arranged for multi-million dollar funding and their About Page reads like a veritable who’s who in banking and interest business. We found their roster to be very impressive and it looks as though the company is going to be in very good hands. Even the best concepts can falter with a lack of leadership, and it appears as though CommunityLend should be able to avoid that issue.

There are no set launch dates yet, but the company has moved quickly since receiving their financing in December of 2007. Borrowers, lenders and communities can sign up for more information and news on when the official launch will take place. Given that they have built a very strong foundation so far, they should not have any problems succeeding in this market place.

We liked the ideals behind CommunityLend and wish them well on their journey to becoming a p2p lending destination. We’ll be watching with interest to see how they develop and carve out their niche in this competitive industry. It will definitely be interesting to see how they progress.

• Lending Club Loan Volume Misquoted in National Newspaper I encourage all reporters to check facts. In the p2p lending space, both major US p2p lending companies provide data and this data can usually corroborate or debunk basic marketplace claims.  I was reading a recent Pittsburgh Post-Gazette article on p2p lending: The credit crunch: How did it happen and where......
• Renaud Laplanche, Lending Club CEO in the News Renaud Laplanche, founder and CEO of Lending Club in California recently spoke with Jackie Hyland from ABC News Money Matters about Lending Club, where borrowers with good credit can obtain personal loans from complete strangers. It was touted as providing a unique and creative way to get a loan that......
• Get Your Lending Club Loan Documentation Early For a Few Days of Free Money I was reading about LendingClub loans (I forget where, sorry) and I came across the following statement from Lending Club made to a lender on LC. Our loans expire two weeks after posting. This expiration date is the borrowers actual payment date, however some loans will fund early. Here is......
• Lending Club Files S1 with SEC Lending Club has filed an S1 with the SEC (link to S1 filing). It looks to be similar in nature to the Prosper filed an S1 reported here on 10/30/2007. This continues the Lending Club quiet period started on 4/8/2008. Originally I had guessed 7 months to 1.5 years for......
• Top RateLadder Referrers of My 1st Year Thank you readers. Thank you p2p lending. Thank you referrers. 12/26/2007 is my 1 year anniversary.  As the start of the celebration I am thanking the top 10 (in terms of traffic for the entire year) blog referrers (some sites are more than just a blog).  These stats are with my......

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This year, it has never been more difficult to get a student loan, thanks to new federal regulations. Hundreds of lenders announced that they would no longer be taking part in federal loan programs and schools are struggling to try to offer loans directly to students. This opened up a huge marketplace in the p2p sector for student loans, and business is definitely booming.

Fynanz.com is probably one of the best known p2p student lending marketplaces in the business and they have built up an impressive track record. The process is actually quite interesting and so far, they have been very successful with placing student loans with those that need the help. In brief, a student will need to join the Fynanz.com community, and then set up what amounts to an online auction.

This auction details the student’s loan request, and further information about why they need the money. Once the auction starts, lenders in the community bid on the loans. In order to place an auction, Fynanz.com first has to verify the identity of borrowers and lenders, and will underwrite the loan request. After the auction is complete, the lender supplies the money, which is then disbursed by Fynanz.com to the student and the school of their choice.

The process goes quite quickly and it’s very easy to get everything set up. Fynanz.com uses something called FACS to assist them in underwriting loans. What this means is that students are ranked according to risk, and assigned rates. Academic scores count heavily on this, as well as the student’s background. For those under the age of 21, a cosigner may be required to complete the loan.

We found it interesting that Fynanz.com decided to calculate risk on an academic model rather than the traditional credit scoring model. Rankings range from 500 to 820, much like FICO scores, and if a student’s FACS ranking is below 640 they will not be able to arrange for a loan through the service. Apparently, the company has found that grades are a very good indication on whether or not the loan will be paid, and they have had a lot of luck using this scoring method.

At the end of the day, this is a very fair way to determine whether or not a student should have a loan. This removes any economic barriers between students and focuses on their actual academic performance. It will be interesting to see if this model expands beyond p2p lending and into traditional banking.

The higher the FACS score, the lower the interest rate, which is also quite fair. For students that rank in the top tier, the margin range is 2.5% to 3.7%. This changes to 7.2% to 7.9% for scores that are in the 640 range. If there was ever a reason for students to focus on their grades, this is a pretty good one.

Fynanz also provides either partial or full guarantees on the original loan amount. The guarantee percentage is dependent on the FACS Grade of a loan listing.

While in enrolled in school at least half-time, a borrower may choose between different repayment options:

• Deferred Repayment Option or academic deferment – while in academic deferment the borrower is required to make monthly $25 Good Faith Payments. The Good Faith payments made while in academic deferment help the borrower establish a good relationship with lenders and demonstrate financial discipline. A six month grace period is given after separating from school.
• Interest Paid Option – full monthly interest payments are due on the loan while enrolled in school. Choosing the Interest Paid Repayment option can save thousands of dollars in interest expense over the life of the loan, because the $25 monthly Good Faith payments will likely not be enough to cover the interest accrued on the loan.

In either option mentioned above, monthly principal and interest payments will be due once loan repayment begins. We realize that some students may not yet have found employment even after six months; therefore, borrowers may request to pay just the interest expense on the loan for the first two years of repayment, “Initial Interest Only” option.

We liked Fynanz.com’s methods and have placed 2 bids on listings as of this morning… One is a platinum plus and the other a gold honors…

They also have a very attractive lending bonus as well. $25 bonus once you successfully lend to a borrower (you must sign up with a referral link to receive the bonus and in doing so the referrer would also receive $25). A 3% bonus when you lend $3,000 (that is a minimum bonus of $90 on $3000 lent.) If you lend $3K and refer 5 people the bonus is retroactively increased to 5% in addition to the $25 per referral. This is a very attractive bonus offer and one that I encourage all RateLadder readers to consider.

• Lending Club Loan Volume Misquoted in National Newspaper I encourage all reporters to check facts. In the p2p lending space, both major US p2p lending companies provide data and this data can usually corroborate or debunk basic marketplace claims.  I was reading a recent Pittsburgh Post-Gazette article on p2p lending: The credit crunch: How did it happen and where......
• Virgin Money Review Virgin Money is another the brainchild of Richard Branson, the well known entrepreneur that is behind a multitude of businesses, record labels and projects throughout the world. His belief is that everyone should have access to the money they need when they are trying to get money for a business......
• Prosper 50 Best Websites 2007 By Time Time names Prosper one of 50 Best Websites 2007. Prosper is a community of lenders and borrowers—or social lending network—operates outside of any bank, so the rates are better. Post a request for a loan, including desired amount and the maximum interest rate you'd be willing to pay; potential lenders......
• Rateladder Referral Listing: Debt Consolidation Update: This listing has been withdrawn and relisted as an autofund  at 24.25% and is still missing a picture...  I think the 1st listing was better, but this one is still worth a bid. Active Listing: Debt Consolidation Original Listing: Debt Consolidation I have bid (only bid if you want......
• State Rate Caps Force Borrower (Blogger) To Take Action A C credit (super clean) borrower from Virgina (rate capped at 11%) has been trying to get a loan unsuccessfully on Prosper.  Here is the description: Purpose of loan: Replace an air conditioning unit that went out during a 100 degree day in the Washington DC area. I have made......

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Welcome to the 9th addition of the Carnival of Peer to Peer Lending…

Editor’s Picks:
P2P-Loans.com presents P2P Lending Grows in Popularity as Banks Slow Lending (Are Individual Lenders Suckers or Savvy?) posted at P2P-Loans.com.

Pinyo presents Why Borrowers With Bad Credit Pay A Higher Interest Rates posted at Moolanomy.

LazyMan presents I Borrowed Money On Zopa. Here’s Why… posted at Lazy Man and Money.

Good Information:
Doug Fuller presents Prosper Debt Sale Update posted at Official Prosper Blog.

Wiseclerk presents MyC4 with new look – currency risk now to be covered by lender posted at P2P-Banking.com.

Rate Ladder presents How Lending Club Deals With 121+ Days Late posted at P2P Lending.

• Barron's on P2P Lending Barron's has just published an online article on p2p lending.  You need to be a subscriber to read it here: At Last, a Bank of Your Own Here is a brief preview... SO YOU NEED A FEW BUCKS -- NOT DONALD TRUMP money, mind you, but a little mezzanine financing......
• Add P2P Lending News To Your Website Apparently this has ability has been built into wordpress for quite some time but a friend of mine recently pointed up that it can be done (pfblogs popular posts added to sidebar.)  Here is the wordpress codex for this feature: http://codex.wordpress.org/Function_Reference/fetch_rss. To add the p2p lending news to my sidebar......
• Update of IRR/ROI Values July 2008 Another month another update...  The picture is rather muddled right now between the accrued interest showing up in my account balance even on loans that are technically "charged off"and lending stats changing their algorithm... All I can do is continue to track and hope fore some clarity...  On a positive......
• Another Listing Cancelled by Prosper.com Pre-Funding. Thank you!!! Another listing on which I was a winning bidder was cancelled during the pre-funding verification.  While, I am trying to get money into play, I always appreciate Prosper's due diligence in this area. Consequently, I now have $100 available to bid on loans.  My standing orders fired as soon as the......
• Pimp My Listing #1 -- Blessed with Triplets I am starting a new semi-regular feature. Pimp my listing. I don't yet know at what frequency I will post this feature. These listings will be the best of best extended credit AA-C credit grades and good rates. Most will be larger loans and most will have caught my attention.......

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