It’s been a few months since I have written about my Prosper loan income, and I wanted to give an overview of the good and the not-so-good of my passive income. The good news is I have 21 loans that are on time and current with payments, the not-so-good, I have 1 loan that is 15 days late and another that is in default. I’m surprised by my default as he had a Prosper credit rating of B and income of over $100,000. One of the red flags on his profile was the 95% bankcard utilization, but this is not unique to this individual. Many Prosper borrowers have high bankcard utilization numbers. This is why they are turning to Prosper, so they can refinance high rates. It wasn’t a total loss, I did receive $3.24 in payments, but overall lost $46.76 on this loan. I do have a chance that the Amsher collection agency can collect some of that money, but I’m not holding my breath.
Now for the good news. I have 21 loans all current and earning 19.30% interest, or a daily accrual rate of .53 cents. If these loans stay current it should take 88.22 days to break even on the bad loan of $46.76.
Will I invest more funds in Prosper? Yes, I am learning more about the lending process, and about the need for diversification. It is tempting to bid more than $50 on some loans, as they appear to be wonderful opportunities, but I have to stop myself and remember they are investments. I really enjoy the opportunity to help others refinance credit cards and escape the grips of the payday loan and cash loan companies. Many of these payday loan companies can charge in excess of 200% and keep borrowers in the grips of high fees forever. Prosper offers the opportunity to bid on loans of all types, from AA all the way to HR loans. Even bidding on the safe AA loans offer great opportunities to earn in excess of 6% interest on your money.
What is my goal for Prosper? To fund enough loans to create $100 a month in passive income. At that point, I could transfer the funds or reinvest in Prosper and fund more loans.
If you are interested in joining Proser as a lender, they are still offering a referral sign-up bonus of $25. You can send me an email to thepassivedad at gmail.com and I will send you the referral email. Remember that you should treat money invested in Prosper the same as that invested in the stock market, they are not fdic insured and can lose value.