I started lending money on Prosper.com about 10 months ago. I started out with a total of $1900 in my account. I’ve been mainly targeting people with D and E credit who seem have steady jobs but got into the payday loan trap and can’t get out. My average interest rate is about 19.4% right now and I usually lend out the minimum $50.
I’ve been reinvesting all the interest payments I’ve received. So far I’ve made loans to 40 people and I’ve had 2 defaults and 1 currently late loan – two of which were from Prosper’s auto-pay, which I don’t really recommend using. One of the defaults had a B rating!
Currently my account is worth about $2106, which gives me an annualized return of about 13%. Not bad at all.
If I don’t have any more defaults, this might increase slightly. Even if I get 1 more default, I should still get an annualized rate of 9%, which is about twice what I get in a savings account.
Why should Visa and Mastercard make all the money!