These charts show statistics for the performance of all prosper.com loans. Each curve represents the set of loans that were created in one calendar month. The vertical axis is the fraction of those loans that have "gone bad", in other words are 1 month late or worse (up to and including default). The horizontal axis is the observation date. All data comes from Prosper.com's performance web page.
Click on the chart to see a larger clearer version.
Here's a chart of the same data in which each curve has been slid to the left to a common origin. The horizontal axis is now days since loan origination month.
Explanation of methodology can be found in my prior postings in this blog, and in forum discussions on the old prosper forum, now archived at www.prosperreport.com
Many of the earlier posts in this blog are still on point, and provide background on prosper, from a lender's perspective. If you're new to this, please read old posts before sending questions. Thanks.
On June 1st, Prosper.com made their fifth try at submitting an acceptable registration statement to the SEC that will enable Prosper to reopen. Good luck Prosper. This is a huge document, and I've just about given up on following the changes. With each version it appears that they're becoming more like Lendingclub. Other opinions welcome.
Great discussions among P2P and Prosper.com lenders are found on prospers.org.
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If you read the Lending Club's SEC filings, you find that they want to be selective to keep demand for lenders. If you read between the lines, you see very little monetary motivation for them to pursue bad lenders. On a $20K loan where the lenders lose everything, Lending Club might lose a few percent from their fees, in the hundreds of dollars, not tens of thousands. Consequently, they don't put a big effort into vetting borrowers (i.e. verifying only a subset, and finding out that less than half of them have been honest on their app). This may be better than Prosper, because they actually put their money into some of these loans (I wonder how much they reviewed those apps)!
ReplyDeleteI like the concept and the site, but I feel that they are too lax on these key issues of lending.
Thanks for doing this analysis. This is something that I always find interesting.
ReplyDeleteIt would be nice to do an investigation of why these loans went bad - did the economic downturn just catch that many people by surprise, was it symptomatic of the general over burden with debt, or what?