Debt Daddy's take on Prosper

I just got off the phone with my bank. Now, I know you can't see me, but take a guess - am I smiling?


The smart money would bet on "no". It used to be that you could call your local financial institution with a problem or issue and they would do what they could to help you. If they couldn't help you, they might offer some advice on alternative options. In any case, they appreciated you as a customer and placed some value on their relationship with you.


Yeah...and you used to get a free toaster when you opened an account too.


Those days are over. The banks have decided that they have absolutely no reason to help us, so they don't. There's just no profit in it. It seems like, at every turn, financial institutions are trying to make it harder and harder for the average person to get by. You can only get a loan if you don't need the money. The check you deposit takes a week to show up in your account, while the checks you write are withdrawn from your accont almost as soon as you're done writing them. Fees abound, interest rates bounce, and if you read the fine print, you'll find that most banks tell you right up front that they can and will change the rules whenever they feel like it.


Kinda feels like playing poker with The Sopranos, if you ask me. And I've gotta ask myself, "Why am I still sitting at this table? Surely there's gotta be a better game in town?"


Turns out, there is. If you're looking to borrow money, or if you're in a position to loan money and make a very decent return, read on.


Not too long ago, I came across Prosper.com. Prosper is a company that makes it possible for people like you and me to lend money to people like you and me. No Banks. No Credit Institutions. No Sub Prime Mortgage Companies. Just People. Lending to and borrowing from other people. Some of these folks come here because, for whatever reason, their credit scores and ratings are not quite up to snuff, and the banks won't talk to them. Others come here because, although they have excellent credit ratings, they'd rather not go to a conventional bank for their loan. Either way, Prosper has put together quite an operation. They are thorough, organized - and it seems like it's really working.


I have to admit, I was impressed with the vetting process that Prosper makes applicants go through. In that regard, they are very much like a bank - credit checks are run, debt to income ratios are reported, their credit ratings and any other pertinent information are published so that potential lenders know exactly who they're lending to and what the potential risk might be. But unlike a bank, Prosper doesn't automatically say no if you don't fit into the perfect box of what a "good borrower" should be.


Is there risk? Sure. I'm currently funding a portion of a loan to a woman with an F credit rating. Is there a chance she might default on the loan? Absolutely. Is there a chance that the stock market might hiccup and my 401k account would suddenly devalue itself by 20%? Absolutely. Every investment has risk. The good news is that I've only loaned her $50 of the $4,000 loan she was approved for. Other Prosper members loaned that same amount or better til the loan was fully funded. The loan is being repaid over three years at an interest rate of 22%. Now, this woman has a chance to turn her financial life around. She wasn't about to get that chance with a typical bank. No way in Hell.


That's the appeal for me, I guess. You get to help people that really need help, and you get to stick it to the banks at the same time. They don't get the interest - you do. The banks get nothing but a cold shoulder and a door slammed in their face for a change - and that thought makes me giddy every time I think about it.


If you have even the slightest interest or curiousity, click my link on the left hand side of this page. And how's this for instant reward - if you click through my link, join Prosper and fund a loan, you and I both get $25.00. So, for lending someone $50, you automatically get a 50% return on investment.


Helping others.

Screwing the banks.

Instant return.


Money well spent.