Loan Online Unsecured
Loan Online Unsecured
Prosper Loans Marketplace, Inc. is a San Francisco, California-based company in the emerging peer-to-peer lending industry. The company operates Prosper.com , an online auction website where individuals can buy loans and request to borrow money. According to reports in the Wall Street Journal, "Prosper works like an eBay-style online auction marketplace, with lenders and borrowers ultimately determining loan rates."
Prosper verifies selected borrowers' identity and personal data before funding loans and manages loan repayment. These unsecured loans are fully amortized over three years, with no pre-payment penalty. Prosper generates revenue by collecting a one-time fee on funded loans from borrowers, and assessing an annual loan servicing fee to loan buyers. The idea for the service is derived from group banking concepts, such as rotating savings and credit associations. Other motivating ideas derive from the concept of microlending.
Prosper publishes performance statistics on the website; these are available to the public at large. All transactions are in US dollars; lenders and borrowers must be US residents.
Prosper opened to the public on February 5, 2006. Prosper was founded by Chris Larsen, who also founded E-loan, and John Witchel and is backed by Accel Partners, Benchmark Capital, Fidelity Ventures, Omidyar Network, DAG Ventures and Meritech Capital Partners.
In April 2008, Prosper aligned with the Utah-charted Web Bank. Previously, Prosper operated under individual lending licenses issued by various states, and was subject to each state's maximum interest rate laws. By affiliating with Web Bank, Prosper borrowers nationwide (except in Texas and South Dakota) can offer a maximum interest rate of 36%, which lenders can then bid down.
On December 1, 2008, Prosper Loans Marketplace Inc. entered into a settlement with state securities regulators over sales of unregistered securities.
Credit grades
Prosper rates prospective borrowers for creditworthiness by assigning a "credit grade" based on the borrower's Experian Scorex PLUS credit score. Prosper credit grades are (starting with 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 Experian credit history, including number of current delinquencies, amount currently delinquent, delinquencies in the past 7 years, and other data.
Equivalent credit scores for Prosper credit grades are:
In addition to credit data, lenders also see the borrower's group membership, if any, friendships with other Prosper members, endorsement from those friends, past listings and prior Prosper loans. Both borrowers and lenders are anonymous (identified only by screen names) to protect their privacy.
Business model
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 pay an origination fee of 1-3% depending on the borrower's credit grade, and lenders pay a 1% annual servicing fee. Prosper's initial product is an unsecured 3-year loan for up to $25,000.
Liquidity of purchased loans
Lenders are a party to the loan for the full 3 year term. As the borrower repays over the life of the loan, the payments accumulate in the lender's Prosper account. This money may then be bid into new loans, or transferred to the lender's bank account at any time. However, if the account balance is below the $25 minimum, the lender must transfer the entire balance at once. There is currently no secondary market for Prosper loans, and lenders have no access to funds invested in loans until borrowers repay. However, in October 2008, Prosper announced plans to create a secondary market through an SEC filling.
Cease and desist order
On November 24, 2008, the SEC found Prosper.com to be in violation of the Securities Act of 1933. As a result of these findings, the SEC has imposed a cease and desist order on Prosper.
Litigation
On November 26, 2008, a class action lawsuit was filed against Prosper in the Superior Court of California, County of San Francisco, California. The suit was brought on behalf of all loan note purchasers in Prosper's online lending platform from January 1, 2006 through October 14, 2008 and alleges that Prosper offered and sold unqualified and unregistered securities in violation of the California and federal securities laws. The lawsuit seeks class certification, damages, the right of rescission and the award of attorneys’ fees.
Relaunch
On April 28, 2009, Prosper.com reopened their website for lending and borrowing without having obtained SEC registration. After the relaunch, bidding on loans was restricted to residents of the U.S. state of California.
On May 9, 2009, Prosper.com was closed down again by the SEC.
On July 10, 2009, Prosper's registration statement with the SEC was declared effective , and the marketplace resumed lending on July 13, 2009.
As of October 28, 2009, Prosper lenders can reside in California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Louisiana, Maine, Minnesota, Missouri, Montana, Nevada, New Hampshire, New York, Oregon, Rhode Island, South Carolina, South Dakota, Utah, Virginia, Washington, Wisconsin and Wyoming.
Prospectus Caveats
According to the Prospectus issued to investors on July 13, 2009, Prosper notes since relaunch are obligations of Prosper Marketplace and not of the original borrower. Prosper promises to pay the noteholder funds it receives from the underlying borrower. Noteholders of Prosper notes are considered unsecured creditors of Prosper Marketplace with limited recourse against it. The Prospectus states that in the event Prosper becomes insolvent or declares bankruptcy, investors in Prosper notes may lose all or part of their investment even if the underlying borrower continues to pay. Investors' recourse in the event borrower-supplied information proves incorrect for any reason is also "extremely" limited.
Criticisms
Better Business Bureau Rating
As of February of 2010, the Better Business Bureau rates Prosper as a C- with 43 filed complaints. The score is a result of "Length of time business has been operating" and "43 complaints filed against business"
False court filings
In May 2008, Prosper made a filing with a United States bankruptcy court in which it denied ever having originated a loan to a man who was declaring bankruptcy. Prosper claimed, instead, that it merely acted as an agent of the man to obtain small loans originating from many lenders. This filing is directly contrary to Prosper's statements in its legal agreements (Lender Registration Agreement) which state that Prosper itself would originate all loans and then sell pieces of them to the system's "lenders".
Loan performance
As of August 2008, approximately 18.5% of all money loaned on Prosper from inception (February 2006) through June 2008 are in some form of delinquency. Also, more than 35% of all loans that originated in February 2007 are in some form of delinquency.
As of January 24 2010, Prosper reported that 22.45% of all money lent since inception had been charged off and an additional 2.51% was delinquent but not yet charged off. Charge-off rates by credit score category ranged from 11.57% of money lent to borrowers with a credit score of 760 or higher to 44.30% of money lent to borrowers with a credit score below 600. . Erics Credit Community reported generally consistent delinquency results, with a 24-month delinquency rate by credit grade for loans originated after January 1, 2006 ranging from 11.8% for 'AA' loans to 61.6% for 'HR' loans. The charge-off rates in many cases exceeded the interest received on the loan categories, resulting in a negative return. Erics reported that the median return to Prosper investors was negative 2.00% and the mean return negative 2.28. More than half of all Prosper investors lost money, and some lost a substantial portion of their investment.
Trademark dispute
Prosper sent a cease and desist letter to a third-party commentary website, Prosper Report, for using the word "prosper" in its domain name. On Dec. 24, 2007, Public Citizen Litigation Group responded on behalf of Prosper Report.
Delayed debt sale
On May 2, 2008, Prosper announced on its "official blog" the delay of selling some $6 million of defaulted loans to junk debt buyers, which has been put on halt indefinitely. Debt Sale Update
Deletion of official forums
Lenders have criticized Prosper for the deletion of all content on its own official forums which contained a large amount of data, analysis, and lender/borrower interaction.
See also
- Peer-to-peer lending
References
-
^
Kim, Jane J. (2008-03-12). "Where Either a Borrower Or a Lender Can Be" (in English).
WSJ.com
. Dow Jones
. http://online.wsj.com/article/SB120526439925827991.html?mod=Financing/
. Retrieved 2009-09-25
.
PERSONAL LOANS UNSECURED - Apply Today | BAD CREDIT OK!
PERSONAL LOANS UNSECURED. Apply today and for fast loan approvals ranging from $1K-$100K. BAD CREDIT OK!
Unsecured Loan - Bad Debt Unsecured Loan
Bad debt can not prohibit you now to have Unsecured loan. Apply now at Bad Debt Unsecured Loan and get easy and online approval of Unsecured personal loan.
Cheap Unsecured Loans – Unsecured Loans UK - Online Unsecured Loans ...
Looking for simple, straightforward unsecured loans at low rate? Online Unsecured Loans UK helps to provide cheap unsecured loans, unsecured small business loans and unsecured ...
Unsecured Loans - Online Unsecured Business Loan for UK Homeowner
Unsecured Loans from £500 to £25,000. Adverse, Bad Credit for Tenants and homeowner. Fast payouts, competitive interest rate.
Unsecured loans - Payday loans online - Personal loans online - UK ...
UK Loans Online offer a wide spectrum of loans - unsecured loans, payday loans online, personal loans online and cash loans which can be used for any purpose. We can also arrange ...
Online Unsecured Loan - Unsecured Loans
Online unsecured loan can provide for financial requirement. Apply now and get bad debt unsecured loan.
Apply Now - Online-Unsecured-Loans
Apply now for Unsecured Loans product at online-unsecured-loans.co.uk
Online Loans - Non Secured Loans - Online Unsecured Loans
Online Unsecured Loans UK offers unsecured loans and help to provide loans for bad credit and unemployed people to best suit you.
Cheapest Unsecured loan uk cheap loans online best quote
Cheapest Unsecured loan, personal loans, uk, cheap, secured loans, home improvement loans, used car rates, bank rate online and much more.
Unsecured Loans | Unsecured Personal Loans | Start Up Business Loans ...
Apply online for an unsecured loan, personal, start-up business, business loan or line of credit from $1,000 to $100,000 today. With the best interest rates and most affordable ...
