Retiring Early

Monday, February 12, 2007

Prosper.com scare

Prosper.comOk, it's no surprise that I've been dabbling with Prosper.com over the past few months. I was checking on my loans yesterday and had a bit of a scare. Normally, I see 15 loans, all "current", etc., but this time, I had the unpleasant realization that one of my loans was marked in yellow and marked as LATE! Yes, LATE!

At first, I wasn't sure what to do, or what I could do, so this was definitely a new experience for me. I poked around the site a bit and found that I could contact the borrower and also found that Prosper does give you a few other metrics about the late loan, but you really have to dig for it. Perhaps what was most surprising was that this borrower wasn't one of my "D" credit borrowers -- they're all "current" on their loan payments. This borrower has a "B" credit rating and has a positive 10% debt to income ratio -- meaning that they have more than enough income to pay their debts off. All in all, this is a solid borrower, so what gives?

Well, hate to let you down after such a setup, but it turns out that the borrower had actually paid, but 4 days late. It appeared that the payment was "in-transit" and would be applied to the loan within days -- it just wasn't clear from the information provided by Prosper.com. I guess the take away for me is: 1) don't freak out -- late payments will happen, even with worthy borrowers, 2) Prosper.com needs to figure out how to better show loans in different states of "lateness" -- currently it's hard to figure out what is going on and if you need to take action, and 3) Prosper.com needs to do a better job telling you exactly what to do when borrowers are late.

Anyway, I'm hugely thankful to see that I was only misunderstanding the problem vs. actually having a late loan.Anyone else freak out when they saw their first missed payment?

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2 Comments:

  • At 2/14/2007 8:03 AM, Anonymous finance girl said…

    Wow, that would have freaked me out. My stepsis' friend was looking at prosper.com as a way to generate income, I may send her your way to get your insight on your experience :-)

     
  • At 3/17/2007 10:03 PM, Blogger frequencydip said…

    I've ben lending on Prosper for over a year, and lates will come and go, I don't sweat it unless the late turns 15 days late then it may be a issue...

     

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