Prosper: an American Peer to Peer Lending Club

Peer to peer lending is certainly becoming more popular, and Prosper is one of the leading clubs of its kind for investors and borrowers in the US to consider. It offers the potential of good returns for those who have money to invest, while people looking for loans can get reasonable rates on those too.

The website has a simple and straightforward home page that provides easy access to the different sections. This means you can find out very soon whether Prosper could be ideal for your needs.

Information for borrowers

The rates on loans vary depending on how good your credit record is. The fixed rates begin from around 6.59%, although this can vary. The rates can be higher than this however, as they are based on your own personal situation.

The application process is straightforward and relies on you supplying some basic details before you see your rates and loan opportunities. You then need to wait for investors to see your loan and invest in it before you can get the money you require.

Information for investors

For those who are looking for a good investment opportunity, Prosper could prove to be rather different from anything you have considered in the past. An investor puts their money into ‘notes’, and according to the information given on the website, everyone with at least one hundred notes has had a positive return on their money since the website first opened.

The good part about Prosper is it provides the opportunity to decide whether you want to take on a small amount of risk or a much larger amount. The safest investments will return a generous amount (currently around 5.49%) while the highest risk investments can return approximately 12.46%. This gives you more freedom to choose the most appropriate investments for your needs. Indeed you can spread your risk ratio in a way you couldn’t do with a standard investment of any kind. Thus it can suit a wide range of people.

Furthermore there is the potential to get monthly payments into your account once the people with the loans make their monthly payments. So it all works in a very logical manner.

Is Prosper for you?

Prosper certainly presents a good option to consider if you are looking for a different investment or another potential source for a loan if you have been turned down by the familiar sources. Of course since this is rather different from anything you may have come across in the past, it is worth reading through all the information on their website – in particular the ‘how it works’ section. This will provide all the information you need on how Prosper works and how it is different from other investment and loan providers.

Prosper and peer to peer lending may not be for everyone. But for those that it appeals to, it could be a refreshing and worthwhile source of loans and investments, regardless of your financial position at the moment.