Archive for the ‘Credit Crunch’ Category
Prosper.com Interest Rates are Increasing
An increased hesitancy to lend to high-risk borrowers is also apparent in moving Prosper.com interest rates for E and HR credit scores:
Prosper.com Interest Rate History - E & HR
After comparing these rates to interest rate trends over the last year, it is quite clear that Prosper.com rates most closely mirror the mortgage market:
Mortgage Rates Trend from Bankrate.com
 And they don’t tend to follow the consumer lending market:
 If you’re looking to predict Prosper.com interest rates, look toward the mortgage market, not the consumer lending market. P2P/Social Lending is so new that much of the interest rate growth could simply be a result of lenders becoming more saavy about default rates, fees and other expenses of lending.
 What do you think? Can we use mortgage rates or consumer lending rates as social lending indicators?
Social Lending and the Credit Crunch
There is no doubt that the last 6 months have made it more difficult for individual and commercial borrowers to get credit. How will social lending and peer to peer communities pick up the slack? My guess is that, in times when banks are fearful and investors are turned off by the stock market, social lending communities make perfect sense for both borrower and lender. Lending on Prosper is certainly lower risk than shorting in a bear market or trying to dollar-cost-average your way through the lull on Wall Street. I’m going to try to find some figures to align growth in loans originated with a decrease in commercial credit. Stay tuned…
