Originally Posted by ERD50
I'm amazed that 60% actually DID pay in full!
So I guess you'd need to charge 50% interest rates or something (would need to know the time frame) to make a profit (but then it would be harder to pay, and the default rates would go up....).
Gee, sounds like the credit card companies are Saints to offer credit at the rates they do!
Well we/they weren't stupid about it. Payments were automatically deducted from checking account once a month, and if you didn't have money in the checking account, you get hit with fee from both Prosper and your bank. So the only way to to stop making payments was to close your checking account.
The Experian data predicted that about 10% of my loans would default. Actually two of my good loans were at some of the highest interest rates 29% (the max allowed) and 27% which they have been paying for almost 3 years.
I went back and doubled checked my figures and misread some info. To my shock my investment in Prosper is better than the markets
Total Deposit $2,500
Current loan balance $218
Total loans 37
Active loans 11
So given past history I'll probably collect $.10 on the dollar for the late loans and if folks have been paying for 2.5 years will continue to pay. So I may end up getting all but $200 or $250 back. Beats the S&P which was right about 1300-1400 when I was making the loans.