Let’s start this review of prosper.com by understanding what the website is all about. Prosper.com is a lending website that is part of the peer-to-peer lending system.

It sets a platform on which lenders meet potential borrowers, giving a chance to both parties to benefit from its services.

How prosper.com works

The website creates a way for borrowers to get unsecured loans at a much lower interest rate than most financial institutions would be ready to offer.

It applies some checks on the credit worthiness of the borrowers and grades them to ensure that fraudulent borrowers do not get a loophole. It collects information about the lowest rates on offer and presents these to borrowers who qualify.

Prosper.com legal issues

The company has once been served with a cease and desist order from the Securities and Exchange Commission. However, they resolved the issue and resumed operations in the year 2009.

The peer-to-peer lending industry, which the company is part of, is also legal.

Prosper.com opportunities and risks

If you are an interested investor in prosper.com, it is beneficial to understand what risks you would be getting into. The company has few requirements for clients to qualify for loans, which puts your investment at a risk.

During the initial stages of operations, 20% of the loans it originated were defaulted. However, since it resumed operations in 2009, only 1.1% of its loans have gone delinquent.

Summary of review of prosper.com

The company presents a legit opportunity to make profits through lending. The only downside of the opportunity is that the loans are unsecured and the company does not apply enough regulations to keep away fraudulent borrowers.

The interest rates are also very low due to the high demand of Grade-A borrowers.

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