I am NOT a spammer!
I recently read this post on Kevin Donahue's blog about ING Direct. Online savings account, easy to transfer in and out, and a great interest rate. I've been using them for years. He offered to refer people in, getting a referral bonus for himself as well as a bonus for the person referred in.
When I read the post, I added a comment mentioning Prosper.com. I discovered it via some weblog a few months ago. I can't remember which one - I wish I could. I tried to make it clear in my post that I wasn't spamming because I knew it'd appear that way. Well, the comment got deleted. Then I contacted him via the contact form on his website, trying to explain the situation. I got no response. This was several days ago.
So to follow the advice I've read on blogs that don't allow comments, I've posted this entry here - responding via my own blog.
So do yourselves a favor. If you need short term savings, easy access, need stuff to be somewhat liquid - a 3 day delay or so when you need to tap your savings - then go with ING Direct. I have nothing but good things to say about it. But if you have a little money you can put away for 3 years (as little as 50.00) check out Prosper.com. I guess you could sort of describe it as an Ebay for loans. Borrowers and lenders get matched up. Prosper manages the process. The loans can be funded by multiple lenders - for example, someone wants to borrow 5000. Multiple lenders can fund the loan with amounts as low as 50.00. The interest paid back goes to the lenders. All loans are for 3 years, so you need to use money you don't have to have back completely for 3 years. You get your piece of the payment paid monthly, but you won't get the full amount plus interest for 3 years.
Oh, I could refer you to ING if your interested, get my referral fee and you get your deposit bonus, but that's not what this is about. It's just about getting out info that may help people. If you want to get a deposit bonus, Kevin Donahue will be happy to refer you. Give him your business.
When I read the post, I added a comment mentioning Prosper.com. I discovered it via some weblog a few months ago. I can't remember which one - I wish I could. I tried to make it clear in my post that I wasn't spamming because I knew it'd appear that way. Well, the comment got deleted. Then I contacted him via the contact form on his website, trying to explain the situation. I got no response. This was several days ago.
So to follow the advice I've read on blogs that don't allow comments, I've posted this entry here - responding via my own blog.
So do yourselves a favor. If you need short term savings, easy access, need stuff to be somewhat liquid - a 3 day delay or so when you need to tap your savings - then go with ING Direct. I have nothing but good things to say about it. But if you have a little money you can put away for 3 years (as little as 50.00) check out Prosper.com. I guess you could sort of describe it as an Ebay for loans. Borrowers and lenders get matched up. Prosper manages the process. The loans can be funded by multiple lenders - for example, someone wants to borrow 5000. Multiple lenders can fund the loan with amounts as low as 50.00. The interest paid back goes to the lenders. All loans are for 3 years, so you need to use money you don't have to have back completely for 3 years. You get your piece of the payment paid monthly, but you won't get the full amount plus interest for 3 years.
Oh, I could refer you to ING if your interested, get my referral fee and you get your deposit bonus, but that's not what this is about. It's just about getting out info that may help people. If you want to get a deposit bonus, Kevin Donahue will be happy to refer you. Give him your business.
posted by learningtowrite | 7:21 PM
2 Comments:
As for the Prosper site:
As with any type of investment, there are risks involved. The documentation on the Prosper site talks about this. There is bigger risk involved based on how much you invest in one loan. The Prosper documentation even encourages diversification. The minimum required to lend is $50.00. Even a small $200 or $300 investment at Prosper will let you diversify to 4 or 6 loans if you do the minimum.
Is there some risk with people defaulting? Yes, obviously - it is a loan after all. The interest rate is one way to compensate for the risk. Also, if you've looked at the loans at the Prosper site (which you can do without being a member), you will see that they show both the borrower's credit score (reflected as a letter grade) and their debt to income ratio as a percent. That is information you can use to help determine which loan(s) to bid on. Also, diversification is a way to lessen that risk.
Is there risk that someone will pay it back early and you lose some of the interest? Yes. Again, diversification is a hedge against that risk.
Will the rate of return be less than a CD at an FDIC institution? I guess that depends on what loans you pick and how you pick them. Current CD rates at ING Direct are around 5.25%. I think that even with the risk of default and early payback I can probably beat that rate at Prosper.
I, for one, plan on investing in loans that pay over 10% interest and I plan on diversifying to hedge against default and early payback. There is some risk there, yes, but it isn't my emergency fund or 401(k) I'm investing here, either.
If you have further questions about their business, please see Prosper's website for more information.
I spent lots of time looking through all their stuff, checking out loans, reading details (fine print) in agreements and things, and I'm comfortable with investing some money there. Mine will be little bits at a time (in the neighborhood of $50.00 a month) but over time will grow. I'll update here ans things progress.
But, again, I don't work for Prosper, I'm not getting any kind of commission for referring people to Prosper, I'm just trying to share info with people I thought would be interested in it. I felt like I was trying to help someone who's blog I read regularly and got treated like a spammer for doing so. It offended me, and so I responded here.
very interesting info. I've never heard of prosper.com. I'll check it out.
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