Prosper: online lending

By mikelove, published at 10 May 2007 - 8:12pm, last updated 12 years 18 weeks ago.

The post about Pledgebank reminded me of Prosper which I heard about through Andrew Martinez-Fonts at the first Stirr event. Prosper is an "online marketplace for people-to-people lending."

The way Prosper works is intuitive to people who have used eBay. Instead of listing and bidding on items, people list and bid on loans using Prosper's online auction platform. People who want to lend set the minimum interest rate they are willing to earn and bid in increments of $50 to $25,000 on loan listings they select. People who lend can easily diversify using "standing orders", which automatically make many small loans to different borrowers. In addition to criteria commonly used by institutional lenders, such as credit scores, people who lend can consider borrowers' group affiliations. Groups on Prosper are critical to bringing people together for the common goal of borrowing at better rates. Groups earn reputations according to their members' repayment records. Groups with successful repayment histories should attract more lenders offering lower rates.

Here is a listing from a borrower who wants to buy something nice for his wife for their anniversary.

Certainly an interesting idea, and it will be more interesting to see what happens as more people find out about it.