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Prosper.com Review - Too good to be true?

Is Prosper.com a Scam?

Prosper.com Review – Too good to be true? | Is Prosper.com a Scam?
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Rating 2.8 - 165 Reviews

Prosper.com is a peer-to-peer loan website operated by Prosper Loans Marketplace, Inc. Are they all they are cracked up to be, or is the website a scam?

Their business model of connecting small investors with people in need of microloans has endured challenges from the U.S. Securities and Exchange Commission and survived well past the original predictions of its demise issued in 2006, but it is worth a closer look.

Prosper.com is attractive to borrowers because it offers loans at lower fixed-rates than banks. Meanwhile, it allows lenders to receive the “risk premium” returns that come from making higher-interest-rate loans to riskier borrowers.

The loans are unsecured 3-year loans that are fully amortized, and prosper.com’s agreement with the SEC, has given its investments the legitimacy that comes from following the rules established for securities trading.

Prosper.com -The Good:

Like any other investment vehicle, you should never commit more money than you can afford to lose. However, the small dollar amounts involved in prosper.com loans make it easy for anyone to invest, regardless of how little cash they have to spare.

Making loans through prosper.com offers the intangible benefit of positively affecting someone’s life. We have all been in a tight spot where an extra couple of bucks could mean the difference between survival and disaster, and prosper.com throws a lifeline to people who have nowhere else to go. Assuming that the borrowers are telling the truth.

Prosper.com-The Bad:

Prosper.com takes reasonable safeguards to verify the identity of its loan recipients, but it is still a challenge to separate the good credit risks from the bad. In August 2008, reported delinquency problems plagued 18.5% of the loans it had made since its inception, while more than 35% of the loans that they made in February 2007 ended up in some form of delinquency.

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Prosper.com itself acknowledged this in July 2009, but they claim that they have turned the corner, with delinquency activity peaking at the end of 2008.

Prosper.com also has a B+ rating with the Better Business Bureau at the time of this writing. Here is the link to see the company’s profile for any updates: Prosper.com BBB Profile. Of the complaints received by the BBB, the majority of them were customer service issues, which is not necessarily a good thing but all of the complaints seem to have been answered and resolved relatively quickly which is a great sign for customers with issues.

Prosper.com-The Final Verdict:

Prosper.com is an attractive concept with an execution that is deeply flawed. There are plenty of deserving people out there who just need a break to get back on their feet, but more people out there are willing to game the system for quick cash.

Trying to separate the “mislabeled” credit risks (that will pay back their loan) from the genuine risks (that are more likely to walk) is too much of a challenge for the tools provided by prosper.com.

Although the SEC investigation has established that prosper.com is a legal operation, so are casinos and other gambling establishments. However, the casinos are also willing to accept small dollar transactions and are much faster at letting you know whether you will ever see your money again.

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Rating 2.8 - 165 Reviews
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Prosper.com Review - Too good to be true? | Is Prosper.com a Scam?, 2.8 out of 5 based on 165 Reviews

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  • It is like any other investment. There are risk The moor you deverse-fi the lower your risk becomes. if you invest $100.00 with one person hi risk invest $100.00 with 4 people at $25.00 each lower your risk. if you invest $1000.00 with one person hi risk. invest $1000.00 beween 10 people low risk invest $1000.00 between 40 people you have lowered your risk. I have made moor money with prosper.com then in the stock markit. and I do not hear that stock marit is scam. Beside gamebling in casinos you cannot chang the adds to your faver. microloans loan in under delovpe conurtys pull people out of poverpy. I am making a little money and helping others. it the some time helping kick start this ecmy
     
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  • Proper is a joke is not a scam. Their rating are worthless. I made 9 loans about 2.5 years ago and have 5 defaults. One default with a D rating - shame on me, but the other 4 were A and B rating and 2 of those filed bankruptcy. Horrible place to invest your money!!!!!!!!!!!!!
     
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  • I've been investing with Prosper since Oct 2006. Unfortunately, 4 of 6 loans went to collections. Prosper is not a scam--its a risk b/c your taking a chance on people being honest and paying you back.
     
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  • I have been investing with Prosper for about a year (1/1/10 to 12/31/10). I have 230 $25 loans and not a single default to date. I am averaging a 20 percent return on my investments. Time will tell, but so far Prosper has proven to be a sound investment for me.
     
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  • I have been a lender for over 6 months now and am very pleased with my results. I recommended this to others and they have reported excellent results. I have made 6 loans in the high risk category and still doing well. One even paid off early. It is necessary to read all the details and answers to questions before committing. The borrowing process is super easy.
     
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  • I have a Prosper loan and have faithfully paid it automatically each month. I have only four more payments left. I tried to get a small loan to help with housing repair from my credit union and they use EquiFax only...and Prosper doesn't even report to Equifax...only to Experian and TransUnion. Therefore my repayment on a 7600.00 loan is not even noted in one of the major credit bureaus. I pay my bill and it should go to ALL the credit bureaus. For that reason alone I won't ever go with Prosper again.
     
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  • I currentl work for a bank- I work for the department of that bank that deals with mortgages, which in this economy I know how most people look at me when I tell them that. However, just like with a home your investing into something that is going to be long term. I have,been,studying prosper.com for quite sometime, and for everyone out there this is my professional advice on how to invest. I agree with the moto above diversify yourself, and any money you do invest ask yourself am I prepared to losse this. Yes the return might not be,as high if you placed it all on one person but the posibility of getting a portion or all of your money back is there.....Just like the mortgage industry too many people bought homes that said " oh I can figure it out later" it doesnt work like that with any investment.....if u cant pay for it on half of the salary you,are making now then you really cant afford it. The same goes with investing. An individual should start off small. Dont look at this like a business look at it like going to,the 99 cents store......yes you can get alot of crap for really cheap and if it breaks no big deal cause you can afford to loose it. Microloans needs to be looked at that same way, only invest what you can stand to loose, and think to your self well its no big deal cause I would have spent on crap one way or,o another- at least this way you the have posibility to maybe make something off it....after your small investments start to pay off,then any money gained should be,the money you reinvest.....i hope and wish all and any the best in their endevours with investments for the future
     
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    (6 out of 7 people found this review helpful)
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