Peer-to-Peer Lending as a Short Term Investment
Investing in Prosper Notes can provide bonus income and simultaneously add a new asset class to your portfolio. Peer-to-peer lending at Prosper gives you an opportunity to earn returns that may be higher than those available in other short-term investments, such as certificates of deposit or money market funds.
Sometimes success means keeping your options open
When you're looking for a short-term investment, you need to pay careful attention to how long your money will be tied up as well as potential returns. Usually, a longer commitment makes for higher interest rates, so investors need to carefully weigh the tradeoff of not being able to access their money for a period of time. The best short-term investment for one investor might not be right for another. For example, many money market funds are highly versatile, providing liquidity flexibility for investors, but have comparatively low returns.
Peer-to-peer lending is a new alternative for short-term investors.
How Does Prosper Work?
Prosper matches individual investors with borrowers seeking short-term loans. 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. Multiple Note terms are available and all Notes are fully amortizing. Prosper Notes carry a fixed interest rate for their duration. Yields on standard short-term investments—such as money market funds and CDs—have fallen, leaving investors wondering where their short-term investment options might be. In this atmosphere, many investors are looking to Prosper as a new investment medium for their money. Any payment from a Prosper Note is dependent on the payments Prosper receives on the corresponding loan. Borrowers may default on their loans, exposing lenders to the risk of credit losses. You can diversify your investment and spread your risk by investing as little as $25 per listing.
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.