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|Subject: Re: The search for yield||Date: 7/23/2013 8:47 PM|
|Author: WendyBG||Number: 35044 of 35498|
Warning! I loaned a small amount via Prosper in 2005-2006 to borrowers who were supposedly vetted by Prosper and had AA-AAA ratings (or whatever their system was) based on their credit ratings.
I lost about 1/5 of my principal due to non-payment of loans.
You don't know the real name or real contact information of the borrower. You have no way of enforcing repayment. Supposedly, Prosper will report non-payers to credit agencies, damaging their credit and get someone to dun them...but that doesn't do you, the investor, any good. These are non-secured loans with not even the knowledge of who is borrowing.
I pulled all my money out of Prosper and swore: Never again!
People with good credit can borrow at reasonable rates via credit cards or HELOCs. There's a reason that non-secured loans are very expensive to individuals with poor credit.
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