Prosper Review: Earn 7% – 13% APY on your investments!
Posted on December 2nd, 2009
Prosper is the largest peer-to-peer lending marketplace in the United States. It has over 870,000 members and roughly $181,000,000 invested. They have been providing an astounding 7% – 13% returns to their investors since their inception in 2006. The 7% to 13% range is dependent on your investing style, you can expect to receive around 7% if you invest conservatively (ie loan money to those with excellent credit only) or up to 13% if you invest more aggressively (ie loan money to those with a lower credit score).
Start investing with only $25!
What’s particularly enticing about this lending platform is that you can spread your investment out over a large number of loans, which reduces your overall risk through diversification. Even if you only get started with, say, $100 you can still spread this out to 100 different notes, essentially loaning $1 to 100 different individuals with varying credit scores.
Peer to Peer lending has seen exponential growth throughout the last few years because of it’s innovative approach to lending and borrowing. Prosper essentially functions as a bank in that it collects deposits (from lenders) and loans that money to credit-worthy borrowers. Their online interface functions as the banking staff, so they can drastically cut down on expenses which many brick-and-mortar financial institutions must deal with.
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What are the benefits of investing with Prosper?
A) Besides, their track record of phenomenal returns on your investment (7-13% APY!) they also allow investors to get started with as little as $25, so their isn’t much risk involved for newbie’s to “get their feet wet” with the program.
B) You can filter your investments on a three tier system – conservative, moderate, or aggressive.
C) Prosper is backed by Accel Partners, Benchmark Capital, DAG Ventures, Fidelity Ventures, Meritech Capital Partners, and Omidyar Network.
What are the risks of investing with Prosper?
A) Prosper is not an FDIC insured institution.
B) Unlike bank CDs (certificates of deposit) their is a possibility of losing part of your principle investment.
C) Your money is not accessible while it’s invested, unlike a bank – where you can retrieve your money at any time.
Get Started!
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