Frequently Asked Questions

What types of institutions can become lenders on Prosper?
Does Prosper verify a borrower's identity?
How should our organization manage a large portfolio on Prosper?
Are notes originated on Prosper transferable?
What if Prosper were to go out of business?
Who is behind Prosper?
Are lenders' deposits insured?
Do lenders earn interest on deposits?
How can our company account for a peer-to-peer portfolio on Prosper?
How is Prosper regulated?
Where can I read more about Prosper?

What types of institutions can become lenders on Prosper?

Prosper welcomes Corporations, Limited Liability Companies, and Partnerships with a valid Employer Identification Number (EIN). For more information, click here.

Does Prosper verify a borrower's identity?

Ensuring that Prosper is private and safe is our highest priority.

We go to great length to verify a borrower's identity. To create a borrower's credit profile, we obtain Experian Scorex PLUS^SM data and allow registered lenders to view credit attributes and additional data when considering loan listings. Read about how we assign credit grades.

In addition, we offer lenders a 100% Identity Theft Guarantee. If a lender is the victim of a delinquent loan from a person who has committed identity theft, Prosper will repurchase the loan for the unpaid principal amount. Learn more.

How should our organization manage a large portfolio on Prosper?

Prosper offers two powerful technology solutions for automatic bidding: portfolio plans and our API infrastructure. These tools allow large lenders to maximize capital deployment and loan funding.

Portfolio Plans

Portfolio Plans allow a portfolio manager the resources to easily automate bidding based on your preferred credit and other criteria. An institutional lender can have as many plans as necessary to adequately capture risk preferences and return requirements.

We provide a daily data export to provide a complete snapshot of all listings, bids, and loans ever created on Prosper. These downloads enable the transfer of loan level data to a third party application for analysis.

API

In addition, developers may access a WSDL based web-service that can be called to get public information about Prosper. It allows real-time querying of market data so you can develop rich, powerful tools for bidding and portfolio analysis. Once established, bidding through Prosper's API runs automatically and does not require interaction with our web portal. Learn more.

Watch the Managing Large Portfolios presentation from Prosper Days 2008

Are notes originated on Prosper transferable?

Currently, the Notes are non-transferable except by assignment to a debt buyer upon default. Prosper is actively developing the ability to provide a secondary market for peer-to-peer loans. Prosper filed an S-1 registration statement with the Securities and Exchange Commission (SEC) in October 2007.

What if Prosper were to go out of business?

First, no new loans would be created. All lender funds not actively associated with a loan would be returned to the individual lenders immediately, and all existing loans will be serviced to completion by a third party loan servicing agent.

Borrowers are still legally obligated to make payments on their loan. Prosper's existence (or lack thereof) does not change that obligation, and failure to meet those obligations would result in the same consequences for the borrower.

Who is behind Prosper?

Prosper's CEO and co-founder, Chris Larsen, was formerly the CEO, Chairman and Founder of E-LOAN, an online consumer lender dedicated to providing consumers with a fast, transparent, and low cost way to obtain mortgage, auto and home equity loans. Under Mr. Larsen's leadership, E-LOAN originated over $27 billion in consumer loans. In June 2004, an independent study conducted by TRUSTe and The Ponemon Institute ranked E-LOAN as one of the top 20 most trusted companies for privacy in America. And in March 2005, E-LOAN received the overall highest rating in the independent Online Customer Respect Study of North America's largest financial services firms.

In 1996, Mr. Larsen founded E-LOAN based on the belief that by leveraging the Internet and building a company on a foundation of pro consumer values, the consumer lending experience could be completely revolutionized. In addition to using the Internet to make the lending process more favorable for consumers, Mr. Larsen has drawn upon pro consumer values to build E-LOAN into a trusted brand by taking radically pro consumer actions.

For example, E-LOAN became the first company to provide consumers with access to their credit scores and to advocate credit score disclosure laws. In addition, Mr. Larsen and E-LOAN co-founded and financially backed Californians for Privacy Now (CFPN), a coalition credited for the passage of the strongest consumer financial privacy protection law in the nation. More recently, Mr. Larsen has been advocating that financial institutions disclose their offshore outsourcing programs to consumers and enable them to opt-out of them.

Prosper has raised $40 million in funding. We are supported by an expert Board of Directors including Paul Hazen, former Chairman and CEO of Wells Fargo, Jim Breyer, Accel Partners, investor in Facebook and Walmart, and Bob Kagle, Benchmark Capital, investor in eBay, Jamba Juice and E-LOAN. To review our Board and Management profiles, please click here.

Are lenders' deposits insured?

When preparing to post a bid, a Lender transfers funds electronically, in an amount at least sufficient to cover the bid, into a funding account maintained by Prosper at an FDIC-insured depository institution, for the benefit of Lenders. Amounts in the funding account are insured by the Federal Deposit Insurance Corporation, or FDIC, for the benefit of individual Lenders on a pass-through basis (i.e., up to $100,000 per individual).

Do lenders earn interest on deposits?

Lenders do not currently earn interest on deposits to their Prosper account. Because of rules associated with pooled accounts (such as the ones that we use to hold your money), we are not allowed to earn interest on those accounts. However, Prosper is actively looking into ways that we can allow for interest to be earned on amounts deposited.

Prosper enables lenders to transfer money to Prosper as needed to bid on loans. How much cash you keep in your Prosper account will depend on how frequently, and in what amounts, you want to bid.

Additionally, using portfolio plans and API bidding tools can significantly improve the pace at which you acquire loans and will allow you to move more money faster. Because portfolio plans are automated, they can minimize the amount of time your money sits idle. Learn more about portfolio plans.

How can our company account for a peer-to-peer portfolio on Prosper?

Prosper provides monthly and yearly statements electronically.

We are also working with select technology providers to develop a robust third-party platform for integration.

Monthly statements
Yearly statements

How is Prosper regulated?

Lending and loan servicing activities on the Prosper marketplace are subject to state and federal regulation.

Loans originated through the Prosper marketplace are made by WebBank, a Utah-chartered Industrial Bank, which is regulated by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC).

Prosper Marketplace, Inc., a Delaware corporation, is subject to examination, supervision, and potential regulatory investigations and enforcement actions by state agencies that regulate consumer credit, trade and commerce, and federal agencies, such as the Federal Reserve Board and the Federal Trade Commission, that administer the federal consumer protection laws, trade and commerce.

Prosper and the loans originated through the Prosper marketplace must comply with applicable state and federal lending laws such as the federal Consumer Credit Protection Act, including, as applicable, the Truth-in-Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act and Electronic Fund Transfer Act, as well as the federal Electronic Signatures in Global and National Commerce Act (ESIGN) and other federal and state laws governing privacy and data security and prohibiting unfair or deceptive business practices.

Where can I read more about Prosper?

Prosper has been written about in numerous national and international publications, including The New York Times, The Wall Street Journal, American Banker, Newsweek, Kiplinger's and BusinessWeek. Read more about Prosper in the press.