I received an email touting “Opportunity to Increase Returns: The Time is Now… with a national cap rate of 36%.” Wow, could this be possible?

I have been investing at Prosper.com very successfully for about 2 years now. My average return is 9.23% with an average rate of 14.98%. Why the 5% difference? Some people default on their loans and others get sent to collections. Defaults are what they sound like - they don’t pay back the money at all. This is usually a result of the borrower filing for bankruptcy. As for collections, payments that are not made after a month or two get turned over to an outside company to be collected. The collection agency takes a cut of what they collect, reducing the lender’s overall return.

Is a 36% return possible? In theory, yes. Practically speaking, I love to see it done. I have noticed that lending rates have been steadily climbing for the past year or so. Prosper.com has contracted with a Utah-chartered industrial bank to get around the maximum rates allowed by the states. So instead of various maximum rates, lenders now have a cap of 36% available to them. My newest loans are now averaging about 15% instead of around 10% as they did when I first started. I have even made some loans lately for around 30%!

Is now the time to lend money? I would say it has been time for a while now. Earning 9.23% on your money is no easy task - even in the stock market or the real estate market (especially in current economic conditions). Prosper.com makes it extremely easy to earn a great return. If you haven’t looked into peer-to-peer lending, now is definitely the time.