Prosper.com Evaluation and Experience

I originally invested about $3500 in Prosper.com approx 2 years ago (circa 2007).  Since then I’ve had half my loans go bad.  Funny thing is that I loaned money out to only A and B Quality borrowers.  The rates were lower, but default rate was still high.

I’ve recuperated about $2500 of my original principal, and hope to get the remaining $1000 soon.  My Prosper account says that my principal balance is $1200, approx $200 more than my original investment.  I doubt I’ll get the full $1200 back.

Would I continue to invest in Prosper?  No.  The returns are just not worth it.  Better to buy CD’s.  There are investors with millions in Prosper with a negative to a barely 1% return.  Pity.

Hey! Wait a minute!  Where’s my government bail out?  Aren’t I a quasi bank?

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Update: May 6, 2010.

Have received the majority of my money back.  Still waiting to collect about $150.  If I do collect the $150, I will have lost approx $50 on this entire transaction.  Too many charge offs, and dead beats on Prosper.com.  Overall, my money sat at prosper for approx 3 years, and I will prob end up losing about $50 – $200 (1.4% – 5.7% loss).  Which if you add in the opportunity cost, is really a loss of about 3% to 8.5%.

Bottom line, from my experience, Prosper.com doesn’t work.

6/24/11 – Update

Have collected everything but approx $25.  So after 4 years, I ended up losing $25 and a heck of alot of time logging in, doing research, checking for loans, etc…  With my time and effort, prob runs in the thousands (my time is expensive 😉 )  Bottom line again, Prosper didn’t work for me.

I’d like to hear from other Prosper members.  How’s it working out for you?