This is part 6 in a series of posts on my experiences with Prosper, the peer to peer lender.
See Part 1 , See Part 2 , See Part 3 , See Part 4 , See Part 5 , See Part 7
Today I spent a little time refining my auto bidding algorithm. I also moved some more money that I had received from my Lending Club loans to Prosper, since LC is still in their "quiet period" phase.
I'm actually quite impressed with Prosper's auto bidding program. The number of criteria that can be specified is quite large, as you can see from the image to the left (click to embiggen). I decided to add a few more criteria to my bidding program, specifically credit card utilization and employment data. I figure that a person who is at greater than 75-80% card utilization is in a precarious position and at greater risk of default. Also, someone who has less than 1 yr employment status maybe a higher risk of layoff and therefore loan default. These are my gut instincts, I don't have any data to back them up.
I also decided to screen loans for debt consolidation. I'm not interested in financing someone's business startup or wedding day. I like to help people help themselves, and refinancing credit card or medical loan debt at a lower interest rate makes money for them and me.
Because of all my "refinements" Prosper is no longer able to accurately predict what my return will be based on their historical data, and so I don't have an estimated rate of return anymore. I was looking forward to beating it...or not.
I also tried my hand at bidding on a few loans manually. So far I haven't won a single manual bid, and I don't think I will either. One bid was a sympathy bid. They wanted the money to buy the same scooter I want to buy. The others look like good loans to me, but I'm either outbid or the loans are underfunded. I don't have time to deal with second guessing myself, so I'll just stick with my auto bidding plan for the most part.
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