Sunday, June 25, 2006

my first prosper challenge...a delinquincy

Three days ago I noticed that one of my borrowers was delinquent on a payment - I lent them $50 as part of a much larger loan.

I'm glad this problem happened, now rather than later in the game when I was much more involved (and financially committed). As part of the prosper experience I have selected a collection agency if things go that far.

Since the loan is less than 15 days overdue, I'm hoping it will be resolved and is perhaps an administrative issue.

One thing for sure, it certainly makes sense to diversify your loan portfolio.

I currently have 13 - figures the 13th would default.

I transferred more money in at mid month, but have not yet loaned it out. I'll try to do one loan every two to five days.

The $50 currently represents about 4% of what I have invested (maybe 5%) soon it will be less closer to 3%. I'll just have to accustom myself to the probability that some borrowers will default as my loan count increases and approaches the mean. Eventually it will be a piece of my monthly interest earnings. I am encouraged that all other borrowers are on time.

I'll let you know what happens.


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