Prosper.com: a peer to peer lending model on internet.

Prosper.com logo

Prosper.com is an uncredible website which enables people to lend and borrow money on internet.

The borrowers post a listing requesting a loan and other benefit from the privilege of lending money.

The lenders can earn a fair return with a better rate than in a traditional bank.

The better way to earn money is to make small loans rather than one big one. It’s better to spread the risk and ensure a more reliable return.

This website is trusty worthy thanks to a system of Credit grades. Credit grade is based on the borrower’s Experian’s Scorex PLUS (SM) credit score. Prosper credit grades are (the highest) AA, A, B, C, D, E, and HR (“high risk”). Lenders considering a bid on the borrower’s loan listing have access to the borrower’s credit grade, along with summary credit data from the prospective borrower’s credit history, including number of current delinquencies, amount currently delinquent, delinquencies in the past 7 years, and other data.

Both borrowers and lenders are anonymous in order to protect they privacy.

 Prosper has a transaction-based business model, in which the company collects revenue by taking a fee on its customers’ transactions. Borrowers who receive a loan on Prosper pay 1-2% (depending on their credit grade) of the principal amount at the time the loan is funded. Lenders who make a loan on Prosper pay a 0-1% (depending on the borrower’s credit grade) annual servicing fee.

 

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~ by Morgane COM on November 7, 2007.

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