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?
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?