San Diego, CA (PRWEB) November 15, 2012
Prosper is a peer-to-peer lending opportunity that connects those who need money with those who have money and are willing to lend it out. The methods used by the company allow for investors to make higher earnings off their investments, while at the same time allowing borrowers to benefit from better rates. This is possible because the company cuts out the “middle man” so loans are directly between the investor and the borrower.
Those who are seeking a micro-loan simply need to fill out a quick form, showing the purpose of the loan and the amount they wish to borrow. Investors can look through the listings of all the potential borrowers and choose one that meets their criteria. Once the loan is approved, borrowers will automatically be billed a monthly payment and investors will receive that payment in their Prosper account.
This peer-to-peer lending method has many benefits, both for the borrowers and the investors. Investors can benefit from better returns on their investments, while borrowers will of course benefit from micro-loans which are more easily and quickly approved than they are in most lending and finance institutions. For those who have money to invest, this method of direct lending can also be a form of charitable work, as many micro-loans are requested from those in impoverished countries who really do just need that little extra cash to completely change their way of life and their future opportunities.
However, there are a few drawbacks, as well. As quite a few Prosper.com reviews will point out, the investment is not always guaranteed. Although the company is approved by the SEC, it still cannot guarantee that all borrowers will diligently pay back their loans. It is incredibly hard for the company to separate those who are legitimately in need of extra cash and who genuinely intend to pay back their loans from those who are just trying to take advantage of the system.
Many long time investors with the company recommend that individuals who are seeking to invest in this opportunity diversify their loans to lower the risk of the borrower defaulting on the payments. Overall, the company provides a unique alternative to traditional loans; however caution is needed, especially when investing any large amount. A full Prosper review gives more information about the company and its policies.