Anyone Have Any Good Lender Stories?

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It seems like everywhere I look online these days I see yet another Prosper lender lament about another late payment or default and how they can’t wait to dump the whole program all together. I mean seriously, who loves to lose money?

I took a look at Prosper, didn’t like what I saw, and never put my money in… and I’m glad I never did. That’s not to say that Prosper is bad for everyone, I just didn’t see any positives in it and I’m kind of glad I was conservative enough to hold back.

If you’re lending with Prosper and have good stories, please leave a comment! I’m sure some people are doing well with it, it just seems, from the blogging community, that there’s a lot of defaulting going on.

{ 19 comments, please add your thoughts now! }

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19 Responses to “Anyone Have Any Good Lender Stories?”

  1. I’ve had one payment that was a couple of days late, but otherwise everybody has been on time.

    I don’t have a lot of loans or a lot of money in it, but my average credit rating that I lend to is a C or D. I just let the money pile up until I can make a new loan and then look for a new one. I’m not making any interest on the money I let sit, but I just stopped being interested in looking for loans every month.

    I very well might start putting money in again, but at this point its just nice watching my estimated 17% rate of return (and 23% if nobody defaults) or whatever it comes to.

    Plus, I got to help some people out that told a good story. I tend to lead more towards the people that are planning on paying off early; I won’t make as much money, but they get a boost and I’m more likely to keep what I do lend.

  2. Drew says:

    I know you asked for positive comments, but I’m afraid my vote is in the negative. I have 51 loans of $100, spread across all different credit scores (as recommended by Prosper and others) and after constant defaults and late payments I’m barely making 6%. Given the inability to liquidate these funds at all, that’s a terrible return. No more prosper for me.

  3. bryan says:

    Ive been using prosper for about a year and have 10 loans out at a total outlay of about $2000. I only loan to AA, A, and B credit and every loan is current or paid in full. Knock on wood. I think it is a good program if you only lend to the best applicants. high risk, D, E, and even C credit ratings are likely to default. I know people that have credit scores around 700 that are late on bills and whatnot and I wouldnt want to lend money to them even though I know them personally. For me to lend, they have to have a solid story with absolutely no questionability, no deliquencies ever, etc.

  4. Josh says:

    Invested $1100 one year ago. All in $50 loans. Open new loans with the proceeds from the original ones. Have had one default(all others-now 25 total loans have paid on time every month), now up 10% overall. Use the automated system to bid on loans (so time committment is minimal- maybe 15 mins a month) but only lend to AA-C ratings and use very strict criteria since the one default (which was one of the earlier loans that I had done).

  5. mapgirl says:

    I have two $50 loans and I’m making about 13+%. I forget exactly. It’s not a lot and that’s fine with me. I was going to add more money to it, but I don’t like the idea of tying up funds for 3 years when there’s other stuff I’d rather do (like pay down credit card debt first.)

    I think I might throw in another $200 here and there, but it’s really just for fun rather than serious investing. You should ask DINKS about it. James and Miel sank a lot into it, IIRC.

  6. Tim says:

    i’m still wary of lending through prosper. anyone know if the losses are tax deductible?

  7. D says:

    Prosper – only seems to get worse too. 🙁

    Thank goodness, I only put in $200.

  8. John Wilks says:

    I have 31 loans with around $2,500 invested. Go through my blog history for all the exact details.

    I have had a few people a few days late, but nothing major. I lend to AA – D and recently decided to drop D. I’m making a ROI of over 20%. I was ranked 18th on Eric’s credit community, now I’m 25th.

    Over all, I love Prosper, but I do see how 3 year loans can be annoying. I try to see them as 3 year CDs.


  9. MoneyNing says:

    I also only put $200 in, and I think it boils down to letting the percentages work in your favor by diversifying. If you have a lot of capital in the program, you should lend it to many people instead of lending a big amount to each person because you like his reason for borrowing.

  10. I think I’m doing better now that I’ve stopped my lending to credit grade E borrowers. I’ve raised my standards for D grades as well. In credit grades AA-B, I have one late loan out of 39.

  11. Shaun says:

    Tim – Yes, the losses are tax deductible. When a loan defaults, you can claim it as a bad loan on your tax return and write off the amount of the loss. I did this last year. As always, consult your financial adviser for your specific situation…

  12. Rob Lowe says:

    I invested close to 12k in prosper… I have had quite a few defaults but most were because I made loans before I truly understood all the tools available to me. I was loaning based on emotional response to the descriptions and loan requests.

    I now have the program set up to reinvest all payments received via the auto bid function… all my loans are 75 dollars, considering that right now my interst payments earn 4.26 a day, I could have one default a month and still make some money. It is has been just over a year since I started and the account is now worth 13.2 K. So I would say that is a success story. I no longer make as many of the bad investments and expect this year to be much better once all my potential defaults drop off…. -rob

  13. Laura says:

    Has anyone entered into a loan agreement with a people to people lender without going through prosper? I contacted an individual that had a post advertising lending on aother website. This individual contacted me back with the details. I am just not sure how to check the individual out (Shannon Douglass Loan Organization). If anyone knows anything about this organization or another reputable lender, please post.

  14. Denna says:


    I would like to know some information about Shannon Douglass Loan Organzation. Where I will get a loan from her or not. If anybody can give me a referance on her company I would appreciate it. Thank you

  15. Denna says:


    Have you heard anything. Please post something and let me know. Thank you,


  16. Steve says:

    loan amt $5000 100 loans $50 each about 1yr + 10 months ago.
    so far
    Principal charge-offs:-$1,029.43
    Payments in excess of principal: $549.51
    Gain/loss to date: -$479.92

    still hv 1yr + 2 months to go to get some of the money back. The bad things about it is that you can not write your loss off because they are in Charge-off-In collections status.

    My recommendation, stay away, keep your money in the mattress is safer.

  17. Paul says:

    I lent money to a number of different people as an experiment to see what the results would be. Obviously, I didn’t want to spend a lot of money, but I wanted to get some statistics. I just let it sit here for 2 years. After two years, I can report that I could have done far better anywhere else.

    I lent money to people with AA, A, B, C, and D credit ratings. The percentage of defaults are broken down as follows:

    AA – 0% defaulted
    A – 43% defaulted
    B – 20% defaulted
    C – 44% defaulted
    D – 0% defaulted

    (Note: I lent money to only two people in class “D”, which is fewer than what I lent to other classes. Nonetheless, it’s very interesting to see that they were more responsible than the “A” class.)

    Overall, 31% of loans were in default after two years. Bad economy? Possibly, but I do not think so. The unemployment rate didn’t go to 31%. I get the impression that there is a higher percentage of people who go to Prosper thinking that defaulting on a loan is not a big deal and/or for other reasons are not able to get a loan from a traditional lender.

    Bottom line is that I do not think it is very safe to use Prosper.

    • coolcreditor says:

      I only loan to AA or A.
      I don’t loan to people claiming debt consolidation as the need for the loan.
      If the write up is weak, I don’t loan.
      If you have bad grammar or spelling, I don’t do the loan.
      If you claim ridiculously low expenses (like 50 for monthly food budget) I don’t do the loan

      I invest $100-$200 a month. This is a ‘hedge’ for me as it doesn’t track the stock market or commodity markets.

      So far all current.

      Risk and Reward. I go less risky, but I’m content with my reward.

  18. Jason says:

    I’ve put in 12.5k and currently worth 12.8k after 3 months earning 21.45% with 0 late payments and 0 defaults… it’s still very early in the game but I have 221 loans out and even if I have defaults this early in the game I will still be even so I’m not too worried… I think people realize now that if you default even through prosper it’s going to hurt your credit really bad and good luck getting a nother loan ever again…

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