Prosper Lending 101

I just attended Prosper's lending webinar, "Learn how to earn great returns on Prosper loans!" which was announced last week. It was an informative session taught by Prosper's Brain Mass geared toward the brand new lender. This was the agenda:

• Transfer money
• Basic search
• Anatomy of a Listing
• Watch Lists
• Bidding
• Advance search
• Marketplace performance data
• Standing orders
• Example strategies
• Q&A
• Survey

To explain most of the features covered in the agenda, Brian navigated his account on a shared view. He searched for, found and explained each part of this listing and then actually bid on it. He showed us how to use advanced search and save a search.

This was my first online seminar using this webinar program. When you register you login to a site that gives you a shared view of the presenters screen. In addition, you dial in via your phone for the audio. Unfortunately, everyone had the ability to talk which created a noisy line. I joined the conference call four minutes prior to the start and I was the 12th person to join. I don't know how many total people participated but there was one person on the line that continued to press buttons on his phone and make noise disturbing the call for everyone else. Brian kept reminding users to hit *6 to mute their line but not everyone complied. That is really my only complaint about the seminar. I recommend Prosper get or use the technology to mute all callers to prevent further webinars from being interrupted.

The webinar took a total of 45 minutes which left 15 minutes for questions. Brian was not able to get to all the questions, but here are some of the questions that were asked. These are the lender's questions and Brian's answers, in my own words, based on what I heard.

• Why are some loans featured?

It's random. Borrowers cannot pay to be featured.

• Why bid small amounts instead of large amounts?

Diversify and reduce risk.

• What is the difference between current and open credit lines?

Current are in use within the last six months. Open lines may have been open for years but are not being used and the credit card is not making reports to the credit reporting agency.

• Are groups made up of borrowers or lenders?

Borrowers. There is no advantage for a lender to join a group and right now there are no groups for lenders.

• How do group leaders check out borrowers?

Varies.

• Can anyone become a group leader?

Yes. You just need a social security number.

• When is the service fee deducted?

Throughout the life of the loan.

• If you are outbid does the money return to your account immediately?

Yes.

• What happens if the loan is not 100% funded?

Funds are returned immediately.

• How is the interest income reported for taxes?

Form 1099 is sent if you earned over $600 in interest income.

• Are borrowers more likely to get funded if they are in a group?

Historical trends do not show that borrowers are more likely to get funded if they are in a group.

• How do you find the loan repayment schedule?

Go to Borrow > Loan Calculator

• Is there any way to cash out of your account?

Not now. Prosper is working on a secondary market for loans. No time line yet but we hope to offer it at the end of the year or early next year.

• If two lenders have the same interest rate, does the person who bid the most money win?

No, it is the person who bid first. (I'll just add - if you are looking for information about bidding I recommend our Prosper bidding tutorial.)

I'm glad that Prosper is offering the online seminar and I think it will be useful for new lenders. Brian said they plan to continue to offer it twice a week. His comments about the secondary market for loans was most interesting.