How Baby Boomers Augment Their Monthly Income With Prosper.com
Posted May 3, 2008
Prosper.com is an online community where people come together to lend money or find a loan among the lenders registered on the site. As a lender, the process involves bidding on borrowers’ loans with lenders getting great returns by offering great rates.
Internet users already familiar with online auctions will find the process of lending and borrowing money just as intuitive as other auction sites. But, instead of listing and bidding on items, folks around the world list and bid on loans using the prosper.com online auction platform.
Lending money directly to people is a great way to earn a fair return. For each borrower, prosper.com provides a description of their credit, employment, and income data, and lets you choose exactly who you want to lend to. When you make lots of small loans rather than one or two big ones, you spread your risk and receive a more reliable return. Diversification is the key. Diversification is how the banks build a reliably performing loan portfolio.
If the borrower doesn’t pay-back the loan, prosper.com notes his credit history and assigns a collection agency to recover the funds. Making many small denomination loans to many individuals, “spreads the risk”. It’s a concept made popular in a virtual fashion by prosper.com. The process works and individuals around the world make loans and receive a return above what might be expected in traditional savings’ accounts.
New to the site is a function that allows the lender to choose a comfortable level of risk. Called the Portfolio Plan, the process allows a prospective lender to bid on a group of borrowers that, according to their credit history, should generate returns from five or six percent to over nine percent.
Do your own research before lending or borrowing money from the service. My recommendation is that you google the site using the keyword “prosper.com”. See what others are saying about the service. You might be pleasantly surprised with the additional monthly you could receive with a moderate investment in prosper.com.
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