Prosper is Back
blog.prosper.com
blog.prosper.com
Before investing a sizeable amount, consult external sites and/or observe a smallish portfolio for 6 months or so.
if you invest in a more targetted, calculated way, you'll be more likely to come out with a good return. there are plenty of accounts with 10%+ estimated ROI on that list. take a look at how they invest, there are some trends.
disclaimer: i've not invested any money in prosper, but i was considering trying it out right before they shut their doors. i've done some homework on it.
If you only look at lenders with a sufficiently large (20 loans) and aged (365 days) portfolio to make an evaluation plausible, only 167 lenders of more than 19000 lenders in that category had an estimated ROI of >10%.
Of the 1161 lenders with more than $10K invested and a portfolio older than 365 days, exactly 3 had an estimated ROI of >10%.
The http://prospers.org discussion boards are full of guys who've done their homework. The test is how their loans fared, and generally they haven't fared well.
disclaimer, which I should have stated above: I've invested $1K a few years ago, and am more or less breaking even at the moment.
You'd think they had a very positive track record wrt to ROI, but I only find evidence to the contrary.
It's almost as if lenders are lining up and they have a hard time finding people to borrow to, in 'the real world' you'd expect it the other way around.
Unfortunately, I have no good historical stats on interest rate paid by borrowers, which would probably be the best metric for lender/borrower interest.
The original risks were that borrowers wouldn't pay and that Prosper wouldn't live up to their agreement (the effects of both of which are reflected in the graphs at http://fred93blog.blogspot.com/2009/08/prospercom-080109-lat...). Now a lender contends with a third risk, which is Prosper's own insolvency, a highly likely outcome, considering the lawsuits they face.