Now till Retirement

I have been toying around with various vehicles of investment for quite some time now, many of which I would like to write about in the future. I need to get the ball rolling though to build up my motivation to write up some decent posts. So why not make this easy on myself and just start off with my latest little financial adventure in peer to peer lending… Prosper.com.

Maybe you have heard of peer to peer lending, but I am going to assume you have not. With peer to peer lending services, such as Prosper, loans are made in the same manner as a bank would make them… the difference is the funding comes from individuals like you and I bidding on little piece of the debt.

With Prosper, a borrower will sign up with an application just as at a bank. The credit ratings and other pertinent information will be gathered and added to their profile, and the request for loan funding will go out. This is where we, the lenders, come in. We get to look at the various loan requests, all the information a loan officer would, and decide whether or not we would like to loan that individual money and at what interest rate to do so.

The more riskier the loan request, the higher the interest…. but the more likely you shall not receive your investment back. The less risky, a lower return interest wise is to be expected but is a better bet for the long haul. Unlike a bank though you do not have to bid on the entire request. You can bid on part of a loan for as little as fifty dollars, while others like yourself do the same to bring the loan to the amount requested by the borrower, thus spreading the risk among multiple parties.

The ability to bid small amounts with the 25 dollar sign up referral bonus at Prosper is what drew me in to try this service. I decided to bid on a low risk loan at a small 7% rate of return with the minimum of fifty dollars with the hopes of getting the twenty five dollar bonus. I figured fifty dollar locked into a 7% rate of return for the term of the loan was not a horrible move since the likely hood of repayment is high, and the bonus more then makes it worth it with this strategy.

I successfully bid on a very low risk loan and received my bonus immediately, which was promptly removed to my online savings account as profit on my investment. The catch is, to receive the twenty-five dollar bonus, you have to sign up by being referred by someone… someone like me perhaps. If you were to click any of the links in this article to prosper or the banner I have on the left, you would be eligible for the 25 dollar bonus upon successful funding of your first loan… and I would also get another 25 dollars for referring you to the service. Once you have signed up you can also refer others for the same deal.

In my opinion this Prosper.com deal is pretty much a win win situation as long as you play it smart.