$25 Signup Bonus
I signed up awhile ago to get the free $25, but never actually funded a loan. If you haven’t heard of Prosper, it’s a person-to-person lending company. You can loan money to people who need it or borrow money from the people lending it; Prosper facilitates the process.
In addition, to getting a $25 signup bonus, you can also refer your friends and get a $25 fee when they become lenders. (If they want to be a borrower, you get $50.)
You’ll get your $25 once you fund a loan, so I need to get started as a lender. Here’s what I’ve learned during the process about the fees, how to lend, and tips for lending at Prosper!
Prosper charges a a servicing fee based on the borrower’s credit grade:
- AA: 0% annual loan servicing fee
- A – HR: 1% annual loan servicing fee
Collection agency recovery fee
Of course when you are acting as a lender, there is a chance that the borrower won’t pay. Selecting a collection agency if one of the loans defaults was interesting. If a loan is more than one month late, the collection agency will begin work to collect the past due payment. The fees varied by agency, but the fee is only collected if the funds are recovered.
How To Lend
I followed the tutorial to learn how to lend. Here’s the directions from the tutorial on how it works:
- Fund the account.
- Search listings by borrower credit grade, debt-to-income ratio, and other criteria. When you find the listing you want to bid on, review the listing, the borrower, and the borrower’s credit rating.
- Bid. Enter the amount you want to lend, along with the interest rate you’re willing to accept on this loan. You can bid as little as $50 on each loan, or you can bid for the full amount requested.
- Make the loan and get paid monthly.
Now that I’m ready to fund a loan I researched some tips and found the following Prosper tips from Moolanomy:
The portfolio plan gives you less control, but it’s a whole lot faster and easier….
Prosper doesn’t pay interest for money sitting in my account balance, so it’s good to loan it out as fast as possible.
It’s better to bid on 100% funded loans that only have a few hours left to go, because:
It doesn’t lock up the money while the bidding process is active — putting the money to work sooner.
Since loan can expire without being filled, loans that do not get completely funded can waste your time.
It’s good to set minimum bid rate to an amount lower than the current rate to avoid being outbid
Armed with these tips… I’m off to start my lending and collect my $25 signup bonus from Prosper. I’m going with the moderate portfolio to try it out.
Update: Prosper has ended their $25 signup bonus as of June 30, 2008. You can still sign up with Prosper, but you won’t receive the bonus.
Here are more helpful resources about Prosper:
- Are Person to Person Loans Guaranteed? at Cash Money Life
- New To Prosper? How To Manage Your Risk As A Peer To Peer Lender at The Digerati Life
- Prosper Taxes: Help Me… Help You at Lazy Man and Money