Can You Really Earn 20% at Prosper?

One of the cool things about Prosper is that every lender and borrower has a unique user name. Well, that is not really the cool part. What is cool is that if you know a lenders user name then you can use one of the third party tools to lookup the details of their portfolio.

Not only that, but pulls in all lender data and allows you to run inquiries against it. Today I decided to see who is doing the best on Prosper since their relaunch. I just ran this query in Lendstats. Basically, I was looking for all lenders who have made a minimum of 100 loans with an average loan age of more than 12 months. I figured that should provide me with the top performing lenders since Prosper emerged from their quiet period in July 2009. The top of the list is a lender who goes by the name of flexible-economy2.

A 20.11% ROI on 100 Loans

Now we know next to nothing about this person, but we can find out the details of his/her loan portfolio. Here is a screenshot I took today from their profile page on Lendstats:

Prosper Lender profile on Lendstats

As you can see flexible-economy2 has an estimated ROI of 20.11%. That is excellent considering that most of their loans are nearly halfway to maturity. With an average Prosper rating of D- flexible-economy2 has taken an aggressive approach to their investing, but has been amply rewarded. They have had 12 defaults (a 12% default rate) but with an average interest rate of 32.58% they have still been able to maintain an ROI above 20%.

With the higher interest rates on Prosper it is relatively easy to get a great ROI in the short term. My own account there is only six months old and on Prosper’s last statement they said my ROI was 23.96%. I haven’t provided details of this investment yet because I consider it too young to learn anything meaningful. After a few more months I will share my detailed Prosper results here.

With Lending Club there is no way for anyone to know the details of any other investors portfolio. Prosper makes this data readily available. I think it is great that Prosper has added this level of transparency so any investor can see how the successful investors put together their portfolio. When I first discovered this I spent an hour looking at all the top lenders seeing if I could find any patterns. But that is a topic for another post.

I encourage you to check out this cool feature from Prosper for yourself. Lendstats provides all kind of analysis on these portfolios that can help you become a better investor.

  • Peter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.