Introduction to Prosper
- Potential borrowers apply for loans through Prosper.
- They fill out an application with all their information such as credit history, employment, income, reason for borrowing and more.
- Prosper gives them a rating of either AA, A, B, C, D, E and HR (High Risk I think)
- Investors (Lenders) get a Prosper account and fund it with cash.
- Investors can search for borrowers based on many criteria including employment, income, credit history, Prosper rating and more.
- Investors typically select many borrowers and commit to loan them each a small amount (about $50 to $100)
- When a borrowers loan request is completely funded by Prosper investors, the loan goes through and the investors committed amount is transferred to the borrower.
- The borrowers make payments on the loan and the payments show back up in the investors account over time.
This is basically how it works.