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Author: WendyBG Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35392  
Subject: Re: The search for yield Date: 7/23/2013 8:47 PM
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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.

Wendy
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