Private Lending with Prosper: Reducing the Corporate Middlemen
We hear it all the time: People love the peer-to-peer lending marketplace at Prosper. People lending people money within a community is an old idea made new again, but this time, with the weight of Internet technology behind it. And when you read our borrowers' stories, you realize how much of a positive impact you can have on other people's lives. Investing in your community feels good.
Big banks: Are they right for you?
Sure, you can have your money sit in an account at a big bank, but where are they putting your funds? Will it be something that reflects your values? There's no way to know, because there is a lack of transparency. The recent banking crisis was largely caused by concerns over murky investments made by the big banks. Private lending puts the decision in your hands. And with many credit card rates climbing higher as the banks struggle to return to profitability, the threat of predatory lending looms.
And what about your return when dealing with big banks? While your deposits are insured by the FDIC, your returns always reflect the middleman's cut. The corporate middlemen all take a cut for handling your money, and that can greatly reduce your return. (Just take a look at Bankrate.com.)
Peer-to-peer lending: Providing a better way
At Prosper, we like to think of ourselves as a facilitator to our financial community. We’ve come up with an exciting way of expanding upon private lending possibilities through the latest Internet technology.
As an alternative to the usual asset-based lending by big banks, we offer our borrowers unsecured loans on the direct person-to-person market. To better help you take on the risk of private lending, and because these loans are not FDIC insured like ordinary bank deposits, Prosper provides you with the right tools you need to make informed decisions. You're free to choose the direction your funds should go.
We also believe in full transparency, so we inform you that we take a small servicing fee from lenders, as explained here. There are no hidden fees.
Why not sign up with us and shift some funds away from the big bank trap?
How Does Prosper Work?
Investors create an account, set their parameters, and purchase Prosper Notes. Each Prosper Note corresponds to a listing which sets forth the relevant details about the loan, including loan amount, Note rate, yield percentage, and borrower information. Any payment from a Prosper Note is dependent on the payments Prosper receives on the corresponding loan.
The Notes that correspond to specific borrower listings are offered by prospectus. Investors should read the complete description of the Notes and risks associated with making an investment in the Notes as well as other information about the Prosper model in the prospectus.
Prosper Notes are risk bearing and speculative investments for suitable investors only. If a borrower fails to make payments on the corresponding borrower loan related to your Prosper Note, you will not receive payments on your Note. There is the potential that you will not receive any payments on a Prosper Note. You should review the prospectus before investing through Prosper. Not FDIC-insured. Notes may lose value. No Prosper or bank guarantee.