Prosper’s Portfolio Plans: How to Get the Best Returns

One of the biggest issues any new lender will face is how to gauge what his or her true return on investment is. It is somewhat misleading to bid on a loan with a high interest rate attached because there are so many additional factors that come into play later on that will reduce your overall return.

For example, how many of these loans have historically defaulted? Generally, the higher the credit grade, the higher the return. However, when creating a portfolio plan in Prosper, you can easily score a higher return with a lower credit grade by adjusting constraints…

Prosper: My Interview with Chris Larsen (CEO)

Chris Larsen, CEO of Prosper, recently called me to discuss his company and some of the exciting new developments in the works.

Following the conversation, I thought a bit about my first impression of Chris. I can tell you first hand, the guy is a straight shooter who knows the lending business inside and out. What separates his company from the typical establishment is his love for the individual and community.

“Peer-to-peer borrowing/lending is the purest form of capitalism,” said Larsen.

That’s why after founding E-Loan in 1996, he chose to focus on an entirely new approach to lending. After taking E-Loan…

Prosper Options

I recently wrote in to Prosper’s customer support asking if there was any way I could do a standing order search that removed any potential borrower with a delinquency history.

Well, the response just came in and I was shocked to discover that they do in fact have these options built in. the problem was that all of their search windows were already expanded. However, the more options section was not automatically expanded. So, I figured that was all I had to work with.

In the chart below you will notice the section I overlooked time and time again.

Here’s…

Prosper Lending Update

Common sense would tell you that if there were subprime lending woes in the market – Prosper would be no exception. Apparently, there is currently a flight away from the D, E, and HR. Lenders are now allocating resources in their portfolio towards less risky investments in the AA, A, B, and C rated loans.

It wasn’t too long ago that I hinted my concern for these lower credit borrowers. In response I have begun lending to only AA, A, and B borrowers. In the graph below you’ll notice that of my 66 loans, only 57 are current.

In the…

Retire on Prosper?

Okay, it’s been a while since I have updated you on my Prosper journey. Things are still going very, VERY well for me. So far, I have four loans waiting for verification and 45 active loans in place earning 20.51% interest rate (after service fee).

Recently, I did have a slight scare as one of my loans went late (