Thursday, December 6, 2007

Sizable Prosper Upgrade, Including Prosper Blog

Prosper dropped a rather sizable upgrade last night, including the Prosper blog as I revealed was coming soon. The full list can be found on the Prosper forums (login required - grrrr), but two items caught my interest.

First, Prosper will now be providing rate guidance for borrowers. This is beneficial since it will help borrowers avoid the frustration associated with low-balling their initial interest rate. Hopefully, there'll be no more D grade borrowers trying to get 10% loans (unless they are up against the state rate limit).

We know that it is hard for borrowers to choose appropriate starting interest rates for their auctions. For example, the average rate for AA borrowers for loans between $1-5k is currently 7.81%. So a borrower might be tempted to start the bidding at 7.5 or 8.0%. The borrower who starts the bidding at 8% might get funded at 8%. But a borrower who starts the bidding at 10% or even 12% might get bid down to around 7%!

This release includes some changes that help borrowers choose a more appropriate (i.e., higher) starting interest rate, and should help them understand that setting a higher starting rate may result in a lower loan rate than they expected.

Also, Prosper is expanding the marketplace data that can be downloaded for statistical analysis. They're adding loan history information, so it's possible to construct more accurate ROI analysis than was previously possible.

There is now a new lender-only data file (you must be signed in as a lender to download it). It is a supplement to the public data file, and contains 2 additional objects: 1) the CreditProfile object which links members and listings with their credit data, including the extended credit; 2) the LoanPerformance object is a history of the ledger of a loan, including a row for every transaction that affects the loan’s balance.

These are very useful changes for lenders, and kudos to Prosper for this upgrade.

No comments: