On the 3rd day of each month, I will be publishing a status report of all the loans made through , a peer to peer credit website that allows you to borrow or lend money. It is important to track your Prosper investments so you can learn more about the borrowers and their ability to repay the loans. By doing so, you will gain insight for future investments.

Summary

Daily Interest Accrual : $0.44

Average Interest Rate : 23.89%

Interest Income Earned : $11.83

Credit Grade Breakdown

Loans Paid In Full

To date, only one loan has been paid back in full.

New Loans

One new loan was added in April. The borrower requested $3,000 to pay off a Cash Call loan (another type of payday loan with very high interest rates). She had an credit rating of E and a 24% Debt to Income Ratio. She explained her situation where she had to use a Cash Call loan and how she changed her situation to enable a better management of her personal finances. There were 100 bids on this loan. I bid on this loan because the borrower clearly understands the snowball effect which is the purpose behind this loan. By paying off the payday loan, she will have more money to pay down her bills with.

Old Loans

All in all, the performances of the loan has been satisfactory. One of the borrower paid extra this month. Another borrower was less than 15 days late, had a payment in transit but it did not clear. I am not too concerned about it, it happened once before. The borrower resubmitted immediately and the payment cleared.

Net Income

Net income for the month of April was $11.83, an increase of $3.49 from March. For the year to date, my lending portfolio has created a total income of $34.92.

Strategy

I miscalculated last month the total lending investment which according to my investment exposure strategy (2% of my net worth) should be $650.00. To date, I have $600 invested. As a result, I transferred $25.00 into my account which will be combined with the April interest and principal repayments which was used to bid on a 12th loan.

I will revisit this strategy on a monthly basis since my net worth has been rising faster than I anticipated this year. While I am keeping an eye on the news regarding the credit crunch in today’s market, it appears the loans I have extended have been faring well regardless of the credit rates and the borrower’s credit scores. Several of the borrowers have been paying extra on principle which is a good sign of responsible credit management.

My exit strategy is to replace my capital with the interest I earn from this lending portfolio. I am not quite sure how this is suppose to happen. All I know right now is when the total value of my Prosper loans exceeds 2% of my net worth, it is time to transfer the excess balance out so I can control my risk exposure and keep the money moving into other investment opportunities that will help grow my net worth even more. Preservation of capital and growth of investment go hand in hand but often difficult to determine where the fine line is when it comes to risky investment, especially with loans and stocks.

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