Prosper Lending

Looking for a Prosper Loan? See Prosper® or our Prosper Loan section.

If you interested in Prosper Lending and are looking to lend on Prosper you should find this information useful. I start with the basics of how to get set up to lend and then finish with details about my lending strategy.

Lending on Prosper is simple, to get started, all you need to do is sign up (Do this now as you will not be able to view some of the pages mentioned below unless you have signed up) and transfer some money (you can transfer the money at any time however there is a 5 day waiting period from the time you request the transfer) from your bank account to Prosper. The minimum transfer amount is $25 however the minimum bid amount on a loan is $50, therefore you will want to transfer at least $50. I find it hard to invest more than $500 a week in quality loans that meet my Prosper lending strategy, therefore recommend you start with $500 or less. There is no cost to transfer money and you do not make any interest when the money is sitting in your Prosper account but not invested in a loan. Therefore better to transfer smaller amounts and slowly build up a quality investment portfolio then to transfer large amounts and have it sit in your Prosper account or worse yet, invest in bad loans and lose your money.

Once you have some money transferred and are ready to invest, here are a few Prosper lending tips:

Never invest a large amount in one loan. Although the averages do show certain credit ratings to be more likely to default then others, any loan can default as you have no idea what type of hardship someone could run into. I recommend investing no more than $100 in any one loan. Have patience and define an investment strategy, there are plenty of good lending opportunities every week so spread out your lending amongst many quality borrowers.

Use the search functionality to narrow your to loan listing to listings that are at least 70% funded and ready to expire in 24 hours or less. This will focus your money on loan listings that are likely to be funded and will not tie up your money for long periods of time. If you invest in loan listings that still have 7 days before they are to expire your money could be tied up for 7 days and if someone out bids you then you will still not end up with a loan.

Expect some loans to default and create an investing strategy that achieves the returns you would like while taking into account the average default rates. If you get lucky and beat the default rate or rate of return, great you will make more then you expected but most likely you will find your rate of return and default rate to be similar to the averages.

Use your investment strategy to determine what the minimum interest rate you are willing to accept for the loan and bid that amount when you bid. Prosper will automatically keep your bid down to that minimum that way you do not have to worry about bidding on the same loan twice. You either are a winner on the loan and it gets funded for your interest rate or higher or you get bid out and move on because the interest rate paid less than you were willing to take for the risk of the loan.

If you are not clear about something with the loan listing or borrow do not bid on the loan. Either move on to the next loan or ask a question. Wait until you have an answer that you feel comfortable with before bidding. There are plenty of quality borrowers out there so have patience and build up a quality portfolio rather than losing money on borrowers that end up defaulting.

What Can You Make
Interested in what you can make with Prosper Lending and how that compares to other investments such as stock, bonds or just a simple savings account. What about how the risk compares to other types of investing. See our Prosper Financial page to compare investing in Prosper with other investment options.

A Prosper Lending Strategy
Looking to invest in Prosper and trying to determine a strategy that will make you money? I am sure that there are many lending strategies used by lenders on Prosper, here is my Prosper Lending Strategy.

Return From Prosper Lending