5.5 Years Investing with Prosper

Last August, I wrote about our experience investing with Prosper. At the time, we had had money invested there for 4.5 years. Given that that is still one of my most popular posts, I thought that maybe it was time for an update. Hence, this post.

On some level, not a lot has changed since last August. We have not added any new money to the account. No notes have been paid in full since then, and none have been charged off, either.

At the time I wrote the last post, we had 3 active loans. We now have 5 active loans. All are current, though one is new enough that the first payment won’t be due for another week. The oldest note is due to be paid off in November 2013, with each of the others coming due at a rate of 1/yr after that. (These are a mix of 3 and 5 year loans.)

So, since I’m still at 28 notes paid in full and 26 notes charged off, and only 5 active loans, what can I tell you?

It’s pretty much all good news. All 5 of my loans are current, so right now, we’re not looking at any more charge offs, at least not any time soon.

We’ve earned enough in interest from the three active loans we had last year to invest in two more loans. In fact, the value of our loans and cash today is $172.50, up from $135 last year. That’s an increase of 27.75% year over year. No complaining there.

Now, we’re still down money from when we started investing in 2007. But since we made money this year, instead of being down 10.67%, we’re only down 9.5%. Still an overall negative return on our investment, but getting better.

I feel like I’m in a Monty Python movie –

The Dead Collector: ‘Ere, he says he’s not dead.

Large Man with Dead Body: Yes he is.

The Dead Body That Claims It Isn’t: I’m not.

The Dead Collector: He isn’t.

Large Man with Dead Body: Well, he will be soon, he’s very ill.

The Dead Body That Claims It Isn’t: I’m getting better.


Last year, I also made the comment that I was considering only investing inHRloans from now on. So what about the two new loans since then?

One is actually a B rating, so a pretty safe loan overall, given our payback rates. And it’s a B that comes with a 17.45% yield over 5 years. But that 17.45% yield is the second lowest of all the loans.

Only the A rated loan (the one due to be paid off in a year) has a lower projected yield at 10.15%. With only a year left to be paid off, we’re still short about $15 from what we loaned. At the same time, a D rated loan (I know, bad risk, but this was one we invested in before I ran the analysis last year) which is scheduled to be paid off in Jan 2014, is only $5 short of us making our original investment back. The final projected yield on that loan is 26.75%

The other new loan we made only last month. It is at an HR rating, with a projected yield of 30.77% over 3 years.


I’ll admit Prosper isn’t as fun as it used to be. But given that we have much less money invested (and due to the adoption process are choosing not to invest more at this time), we’re only making new loans ever 7-8 months, so the addictive feeling of searching for the perfect loan to make isn’t really missed.

I would like to up our investing in Prosper again. But right now, we have a bit too much uncertainty with the MIL’s estate still in probate (almost done) and the adoption process. Soon though, I’d like to put some more money in and see what we can do.