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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.

• Prosper.com Lender Game — Pensioner Initial Update -- 7.08% to 25.23% Pensioner is what he wants to be, it is not what he is.  He has the largest dollar amount portfolio in Prosper with a current account value of well over 800K.  He is an auditor and accountant by trade.  He is local to the San Francisco Bay Area.  In addition, he participated......
• Prosper IRR Lender “Game” Apr 07 Update It is time for the April 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: LazyMan 5.07%  Largest IRR Model Improvement: leporello by going from (3.10%) to 0.18% he improved 3.28%.  Lowest IRR Model: Pensioner......
• Prosper.com Lender Game — leporello Initial Update — (10.04%) to 16.61% leporello joins the game...  Here is his intro... I am a top-100 lender (most days), and think that your analysis is super. I might add that he is a fellow Princetonian and has invested $40,000 into Prosper. leporello Date Model IRR Best IRR Avg IRR 2/19/07 (10.04%) 16.61% 3.29% Date......
• Use Prosper.com to Repair Your Credit This blog is mostly dedicated to Prosper.com lending.  However, I think about all aspects of the process at Prosper.  Lately there have been a number of postings that list repairing credit as an ancillary benefit of borrowing on Prosper.com.  Repairing damaged credit is a critical step in reducing debt since better......
• How Are Old Large Lenders Doing? Who is pnien?  I don't know as he gaurds his identity, but he sure writes some stellar forum posts.  This time he scraped LendingStats ROI for lenders with average portfolio of 3+ months and 50K invested and come up with 64 lenders.  Throwing out the one outlier he came up......

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Microlending is a popular means of borrowing money because small loans are capable of making large differences for many people. Not only is microlending popular for borrowers, but it also benefits those individuals who are willing to give out loans as well. Some microlending websites, like Microplace.com offer interest in the loans that you give out. While some other microlending websites, like Kiva.org do not offer interest, they do make it easy for you to give out gift certificates. Microplace has paid as much as 3 percent in interest in the past, but as of Tuesday, they have announced that they have a fund that is now paying out 5 percent.

If you have checked out CD and bank account rates as of late, you probably know that in comparison what other lending institutions are offering, 5 percent is nothing to sneeze at.

The money lent out through these microlending websites is offered to poor people, most who are women, who are located all over the world. The portfolio that is now paying 5 percent is going through an organization known as Micro Credit Enterprises. This organization makes loans for working poor in many countries, including Armenia, Bolivia, Azerbaijan, Cambodia, Ecuador, Indonesia, Honduras, Mozambique and numerous other countries. In countries such as those mentioned above, a little bit of money can easily go a long way.

Microlending, like many other types of uninsured investments, is subject to numerous risks. However, based on past performance, the odds are still high that you will see your money again. Historically to date, 97 percent of all low income borrowers have completely paid back their microlending loans.

According to the Microplace General Manager, who is Ashwini Narayanan, Micro Credit Enterprises has a high return rate because there is a system in place for guarantees. The organization has wealthy individuals guarantee their investment, so even if the borrower defaults on the micro loan, the investor still is repaid. There are still some other risks to consider, however.

The people who manage in micro loans in other countries are often referred to as bankers on bicycles. They work with organizations on the ground in developing countries. They actually get on bicycles and ride out to the villages to meet with the borrowers directly every week. The interest that is paid by microfinance borrowers is around 31 percent on average. Microplace is a subsidiary of eBay, and is a for profit broker. They allow you to invest through your checking account or paypal account, and no extra fees need to be paid. When you sign up, you are showed a sample borrower scenario, but when you make a loan it is actually to an organization rather than an individual, and the organization distributes the fund to a number of different borrowers as a result.

Another microlending option is Kiva.org, which is a non profit organization. One of the biggest apparent differences between these two organizations is that Kiva does not pay any interest. Kiva is more of a peer to peer microlending service in that you are lending to one specific individual rather than to an organization.

• Fynanz Review 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......
• Prosper Lending Review -- 11 perspectives on p2p lending Prosper Lending review has an excellent new article. It combines 11 responses (including both Lending Club, Prosper, and yours truly) to a reader's question.  It is well done on all front's.  Here is the question asked: Reader's Question: I am in my mid-30's. I am not rich, but I am......
• RateLadder 2008 Goals Happy New Year!  Here are my goals for 2008 with RateLadder and p2p lending. Current Expectation Goal Stretch Goal 2008 Year Ending Account Value Prosper $11,519.59 $15,500 $16,000 $17,000 Prosper Quicken ROI 10.16% 6% 8% 10% Prosper Lending Stats ROI 3.92% 4% 5% 6% Prosper Eric's CC ROI 8.42% 8%......
• November Prosper Marketplace Survey Released Prosper released the November marketplace survey and coresponding comentary from Chris Larsen... I particularly like the insight in the last paragraph... Of great interest is the anecdotal evidence of prime and near prime borrowers turning to Prosper for loans that would have historically been steered toward mortgage, auto, and home......
• Pretty Women Bad Investments? I was reading this is the forums this morning.  It made me laugh...  Pretty women are probably the least discriminated against stereotypical group... I am relatively new to prosper. Researched alot of older loans and their success rates and also studied some of the more recent loans that have been......

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