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>> Prosper personal lending update <<
Many of you enjoyed Frykitty’s post on investing with Prosper, the person-to-person microloan service. Here’s an article at PF Blog that describes the author’s experience underwriting 163 loans for a total of $14,880 over the past year. Based on the average interest rate (17.6%), I’m guessing that most of these were relatively high-risk loans, which might explain why the author hasn’t had much success.
>> Free summer movies for kids <<
Nickel at Raising Four Boys has thrown together a list of free and cheap movie theater promotions for kids.
>> How to live on a tight budget <<
Lifehack.org suggests you re-prioritize entertainment expenses, save on gas, get creative with gifts, and save on groceries.
This article is about Spare Change Tuesday, 29th May 2007 (by J.D. Roth)
May 29th, 2007 at 8:20 am
I thought the 17.6% was a little high, as well. I’ve read other articles where the mean percentage hovered around 11% or 12% and the authors had returns of around the same amount. I think perhaps it takes some instinct or savvy to do it right. It almost seems like the author of the above blog set out to fail, although he did still have a 4.4% return…
I haven’t tried Prosper yet, but I intend to. Only I don’t plan getting greedy with the high interest rates…
May 29th, 2007 at 3:06 pm
My Prosper average was around 25% at one point, though across only a handful of loans. I have decided to only reinvest in lower risk loans. I got 17% from AA credit on my last one.
I only invested a small amount of money, most of it was with someone I know. Then whenever my balance totals $50 I reinvest in a new loan. I pretty much consider my Propser mmoney gambling.
May 29th, 2007 at 3:11 pm
Wanted to add: About getting “greedy” with high interest- that’s the only way you can lend to people without great credit, and certainly many people lend for the Social aspect ( helping someone out, helping people rebuild, investing in your favorite social causes,etc). Otherwise you will be lending only to people with perfect listings who could probably get a bank loan or 0% card offer. The rates correspond somewhat to the risk and sadly to really make money off the people with troubled credit you need to make your rates HIGHER ( How is that for greedy). Caps make it impossible to really make it attractive to lend unless you really are lending to help and dont care if you are repaid.
May 30th, 2007 at 1:25 pm
Actually, it looks like the average credit grade for the borrowers wasn’t incredibly low.
http://www.lendingstats.com/memberProfile?lenderId=bestbuy