Disappointment with Prosper.com

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Shaun gives us another update about his dealings with Prosper.com, and expresses his disappointment with the lending website.

I’ve noticed now that they have added a new feature called “Community Payment” which I’m not sure I like. The concept is simple: if a member of a group is behind on payments, other group members can chip in and make a payment on the overdue loan.

Among other things, his beef is that the new feature lends itself to fraud, and it removes fiscal responsibility from the individual. As I haven’t yet gotten active on Prosper, I can’t say how I really feel on this one. Any other thoughts?

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Joshua Dorkin

Joshua Dorkin (@jrdorkin, Google+) founded BiggerPockets.com when he saw a need for free, trustworthy information about real estate investing online. Over the past 12 years, Josh has grown the site from self-funded hobby to full-time job and passion. Today, BiggerPockets brings together over 600,000 members, housing the world’s largest library of real estate content, iTunes’ #1 real estate podcast, and an array of analysis tools, all geared toward helping users succeed.

7 Comments

  1. I’m not sure I really like that idea either. Also I like your notion that it takes away the financial responsibility of the borrower.

    If they want to keep this feature, I suggest they make it public how many times a borrow has been bailed out by someone else. That way, if “billy” is looking to borrow $500, but he has a record of having his buddy make his payment, lenders may be able to calculate the risk accordingly.

    -Grant
    TheCornerOfficeBlog.com

  2. I see your point, PF.

    Maybe they could use it more like a co-signer on a loan. If John Doe borrows $500 from you, and he has Jane Doe cosign the loan, if John can’t pay and Jane Does, it doesn’t affect John’s borrowing capability as both John and Jane are on the hook for the $.

    I just think it should affect someone’s borrowing power if they have a history of being bailed out by someone.

    -Grant
    TheCornerOfficeBlog.com

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