Pay it forward - helping others

[Belinda Barfield]

I just found out about this wonderful website, www.prosper.com (http://www.prosper.com), and wanted to share it with those of you who aren't already familiar with it. I am not in any way affiliated with the website. I am also interested in any feedback from any one who has loaned or borrowed on the site.

Basically, as a borrower you apply for the loan and set the interest rate you are willing to pay. As a lender you "bid" the amount you are willing to contribute to fund the loan. You can bid as little as $50. By dividing the loan up into small amounts spread over many no one lender suffers a significant loss if the borrower defaults. Some of the borrowers are paying as much as 35% interest. You get to choose who you want to help and that's where the paying it forward part comes in. :) If you are in need of a loan and can't or don't want to go the traditional route, you can benefit from the site as well.

This is a legitimate site and comes with the Clark Howard stamp of approval (if that means anything to you).

[Lee Schierer]

I'm skeptical! 35% interest, seems like either a really bad credit risk or an enticement to "send me your money then try to get any of it back". That percentage rate looks like a big juicy worm on a hook from where I sit!

However, I have no experience with or previous knowledge of this site so I could be totally off base!

[Belinda Barfield]

I'm skeptical! 35% interest, seems like either a really bad credit risk or an enticement to "send me your money then try to get any of it back". That percentage rate looks like a big juicy worm on a hook from where I sit!

However, I have no experience with or previous knowledge of this site so I could be totally off base!

Thanks for the input Lee. I personally wouldn't bid on a loan where someone was willing to pay 35% interest. One of the loans at 35% was a young woman who wants to buy the apartment building where she lives. So I'm guessing she bopes to pay the loan back fairly quickly. I looked at several of the loan apps and 35% seemed to be the exception. One guy is trying to pay down credit card debt. His interest rate with the CC company was something like 25%, and he wants to borrow at 19%. I guess it all depends on how desperate (and optimistic) the borrower is as to high they are willing to go on interest.

[Mark Rios]

Thanks for the input Lee. I personally wouldn't bid on a loan where someone was willing to pay 35% interest. One of the loans at 35% was a young woman who wants to buy the apartment building where she lives. So I'm guessing she bopes to pay the loan back fairly quickly. I looked at several of the loan apps and 35% seemed to be the exception. One guy is trying to pay down credit card debt. His interest rate with the CC company was something like 25%, and he wants to borrow at 19%. I guess it all depends on how desperate (and optimistic) the borrower is as to high they are willing to go on interest.



I listen to Clark Howard as well (hey, we must be twins! :D) and have heard about this for a while now. The guy with the credit card balances? Apparently he isn't very good at managing his money, i.e. paying his bills, so I'd be leery about that one also. However, in general, as long as a loan was secured and depending on what Prosper's policies were on defaults, it is an idea to consider.

[John Schreiber]

I don't know who Clark Howard is, but I know that there have been schemes like this which have separated good-hearted people from a lot of their money. I might loan someone money which I could afford to loose, but this breaks too many rules for me.

[Jim Becker]

John, Prosper has been around for some time now...there have been many articles written about it. It's a legitimate system for matching up folks who need loans with folks willing to provide capital for a gain. And since risk is usually spread over a whole bunch of people for a given transaction, it's somewhat low. If I recall clearly, the default rate is not bad, either...although that could certainly change given the economy.

And no, I'm not participating in it...I don't have the cash to spare.

[Rod Sheridan]

Belinda, thanks for the information, it's nice to see that those of us who have more than we need, are helping those who don't.

Another organization is www.kiva.org (http://www.kiva.org) which makes micro loans to individuals or groups. These loans are typically in the $25 range, which doesn't sound like much, however to someone in Sudan, it's the difference between becoming self sufficient or not.

Regards, Rod.