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Everybody Hates Prosper

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That may be too strong a statement, but from what I've been readingsome lenders are experiencing extreme frustration. The biggest issue that I see again and again is that cash in your account earns no interest. Typically that's not disasterous, however, Prosper is really slow in three ways.

  • It isn't quick about transfering money to your account for lending. Typically it seems to take 5 days for me even though it says that it typically takes 2-4 days.
  • It seems to take around 5 days for the money to transfer when someone repays the loan.
  • They don't seem to verify borrowers until the very end of the funding process, which can leave your money tied up for 10+ days. Lately a few people noticed that the borrowers aren't legit meaning that they have to start the process all over again.

Here are just a few of the many posts that back up what I'm saying. Prosper, please listen to the people, and give lenders a competitive interest rate on the funds that they are trying to invest through you.

Thanks for your patience today, my hosting service has had problems and I lost several planned posts due to user error - doh!

Last updated on October 27, 2006.

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5 Responses to “Everybody Hates Prosper”

  1. Empty Spaces says:

    when you search for borrowers, you should check the box that filters the ones with verified bank accounts.
    atleast you don’t waste time verifying them afterwards!

  2. That’s an excellent point. I had been using the advanced search, but I’ve been using a very quick search. I haven’t been really looking at all the options available.

  3. Tom says:

    From what I understand, Prosper itself doesn’t earn interest on deposited funds–Wells Fargo does. Prosper may get a discount on banking services in exchange, but they are a money-losing startup at this point. That’s why they’ve cut back on account verification for borrowers who haven’t gotten 5% funded.

    Once they have the capability, I’m sure they’ll pay interest on deposited funds. I’d also be happier if they’d let us bid our transferred funds immediately, instead of having to wait 4-6 days, at least for lenders who have a certain minimum account value.

  4. I didn’t know whether Prosper did or not, but since other financial instutitions can give interest on deposits not in use, it’s what I expect from Prosper. As you say, it’s probably due to not having the capacity, but they are pretty well funded from what I understand. I don’t think it would truly hurt them if they gave something small like 1% interest.

  5. I wrote an article debunking Prosper’s main argument against paying interest. They claim they can’t pay interest becasue it is a pooled account. Hogwash.
    http://rateladder.com/2007/02/04/prospercom-lenders-unite-where-is-our-interest/

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