Freedomain Radio

Prosper is basically a P2P lending service; an Ebay of loans.  I just funded my account-- will update when I have more reactions/results/criticisms/ect.

www.prosper.com

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How Prosper Works
Prosper.com is the United States’ first person-to-person lending system. It matches individual borrowers with individual lenders, and allows lenders to receive better interest than they could in the bank, while allowing borrowers to face lower rates than loan providers. Proper.com claims to be highly secure, and provides collections services if the borrower defaults on their loans.

 

Each borrower is given a credit rating based on their Experian credit report, which lenders use to determine how much they would be willing to loan money. Lenders offer to fund part or all of a borrowers loan, and the loans with the lowest rates that meet the borrower’s target loan amount will be packaged by Prosper and transferred to the borrowers account.

Frank the Financially Savvy Atheist provides a good summary of the risks involved with lending money on Prosper, and you can also check out the lender tutorial and borrower tutorial on Prosper.com.

 

As a side note, U.K.-based Zopa will soon be launching in the U.S. and offers a similar model.

 

 

Sweet we can create a community.

Holy Crap, that is the coolest thing I've seen in quite a while.  Thanks for the link, I'm gonna have to get into that!

What's even cooler is that in about 30 seconds, after applying, you get access to your credit score and extensive financial history for yourself.  Also, you have access to that information on a dynamic basis as you bid as a lender or post loan requests-- which means you can watch your credit score in action.

I requested to add an FDR group, but the request has to be authenticated.  When it's done, you should be able to search for "freedomain" on the groups page and find it.  There's some options to limit group membership too, which is nice. 

 EDIT- I think it'll take a few days, but you can view the group and request to join by clicking on the link in my signature.  If you don't have an account, it will lead you through the process, if you're interested.  So far, I'm pretty excited about the prospects.
 

It got an error when I tried.

Ugh, the automated verification failed, it asked me an impossible to answer question as the last question, didn't make any sense. Now I have to fax them, and faxing people is a f'n pain since I don't even have a fax machine for one thing.

Ugh that sucks dude.  For me, the speed answers were all the "None of the Above" option.  You might try redoing it under a different email address.  I did that with Zecco, and apparently they don't have a program running that checks if the new account refers to an existing person-- it only checks emails.  I can't say for sure that Prosper does that, but it might be worth a shot.  It'd be a hell of a lot easier than faxing.

LINK

This caught my eye. 

hey man, thanks a lot for this site! this is exactly the kind of investment opportunity I've been looking for. I will definitely be checking this out and boosting my returns - Capital one gives me 4.75% low risk no matter how much money I have, which is pretty god damn low compared to what the market rate is for interest these days.. and I have no idea how to manage a stock portfolio!

Hey guys, I just found out that I get a cash reward (between $20 and $35) for each one of you I refer (assuming y'all become active by lending or bidding on a loan within 90 days).  I had no idea about this until just now, when I got an email about it, but what I will do is donate any and all funds I receive this way to FDR in both our names.

eliiswyatt:

Hey guys, I just found out that I get a cash reward (between $20 and $35) for each one of you I refer (assuming y'all become active by lending or bidding on a loan within 90 days).  I had no idea about this until just now, when I got an email about it, but what I will do is donate any and all funds I receive this way to FDR in both our names.

Hi, sorry to rain on your parade, but a fee structure like that is evidence of a Ponzi scheme.  Step back, detach yourself, and analyze your situation.  It won't become legitimized if you donate it to Stef.

PRice:

Hi, sorry to rain on your parade, but a fee structure like that is evidence of a Ponzi scheme.

Are you sure ? I got 50 euros worth of stocks when I brought in a new customer for a broker. They were anxious to reach some round number. Does not need to be a Ponzi scheme because a reward is offered for bringing in new customers ?

PRice:

eliiswyatt:

Hey guys, I just found out that I get a cash reward (between $20 and $35) for each one of you I refer (assuming y'all become active by lending or bidding on a loan within 90 days).  I had no idea about this until just now, when I got an email about it, but what I will do is donate any and all funds I receive this way to FDR in both our names.

Hi, sorry to rain on your parade, but a fee structure like that is evidence of a Ponzi scheme.  Step back, detach yourself, and analyze your situation.  It won't become legitimized if you donate it to Stef.

That's a good thing to watch out for, though if you analyze their fee structure (closing fees for buyers and servicing fees for lenders), it seems like they can easily get the $20 to $35 to provide the "rewards."

Is it cash-as-cash, though?  My guess is that it is reported to the IRS as interest income.  That's what ingDirect does when you open a new account ($25) or get a referral ($10). 

What other criteria would one use to determine whether this is a Ponzi scheme? 

pcrs:

PRice:

Hi, sorry to rain on your parade, but a fee structure like that is evidence of a Ponzi scheme.

Are you sure ? I got 50 euros worth of stocks when I brought in a new customer for a broker. They were anxious to reach some round number. Does not need to be a Ponzi scheme because a reward is offered for bringing in new customers ?

Cui bono?  You've become an agent for your stockbroker by letting them use your reputation.  Are you comfortable with that?  Have you researched their business to the point to where you're sure your association with them isn't going to be a stain on your reputation at some time in the future?  Is it going to cause friction in your friendship if you later find out that a stockbroker churned or otherwise abused his account?