The Complete Guide to Prosper Review – Will Revolutionize America?

March 6, 2008


The first chapter in a new book about lending and borrowing on Prosper is entitled “How & Why Will Revolutionize America”.  The book is called “The Complete Guide to Prosper” and is authored by Sean Bauer, a borrower, lender, and group leader on Prosper.

It’s nice to see an author enthusiastic about the topic they’re covering but I think “Revolutionize America” is a little over the top. Perhaps a more appropriate title for the first chapter might have been “How and Why Prosper Can Become Your Personal Banker”.  Bauer explains how Prosper makes this scenario possible by cutting out the middle man.  Of course, when you remove the bank from the borrowing and lending equation new risks are introduced.

Peer Lending Risks
The first chapter responsibly covers these risks right up front to help people understand the potential downside risk that peer to peer lending does face in terms of loan defaults.  Really the only risk that I saw listed for borrowers is that they might spend their time building a listing only to not have their loan funded. I suppose another possible risk for borrowers would be that they could over extend themselves and borrow more than they could afford to pay back. 

Benefits of Peer Lending
People borrow on Prosper for a wide range of reasons such as funding a new business, consolidating debt at a lower interest rate, or simply just improving their credit score.  Bauer lists the ways that Prosper benefits these borrowers:

  • Borrow for a fixed 3 year term, unlike the perpetual debt of credit cards
  • Get the amount you need, not what the bank’s willing to lend
  • Access to funding not available through traditional banks
  • Potentially lower interest rates
  • Ability to use groups for support

One benefit I don’t think he mentioned is the ability to apply for a loan from the comfort of your own home.  This could be especially beneficial to someone who has a disability that can’t easily make it into a bank or even a single mother who doesn’t have the time or patience to drag her rambunctious kids into a waiting room while she applies for a loan in person.

Bauer also covers how Prosper benefits lenders, here are the key points:

  • You can beat the interest rate offered by your bank
  • Lend as little or as much as you’d like, minimum $50 – maximum $25,000
  • The ability to lend small amounts allows you to easily diversify your investments across multiple loans

Since the book is all about Prosper it doesn’t mention that you can get involved in peer to peer lending with an even smaller initial investment, only $25, at another peer site called Lending Club.  Lending Club is actually offering a $25 bonus for new lenders so you can basically give peer lending a try at no risk.

Complete Guide to Prosper
After explaining what Prosper is and how a borrower or lender could benefit from it’s use Bauer goes on to provide a users guide to borrowing and lending on Prosper in subsequent chapters.  The chapter list is below:

  • Getting Started on Prosper: Creating an Account
  • Borrowing: Should You Borrow With Prosper?
  • Borrowing: Creating Your Borrower’s Listing
  • Borrowing: Endorsements Give You a Helping Hand
  • Borrowing: Managing Your Loan
  • Groups: Take Advantage of Their Huge Potential
  • Groups: Starting Your Own
  • Groups: Managing Your Group for Success
  • Lending: Becoming a Lender
  • Lending: Listings
  • Fees
  • Tools for Using
  • Forums & Conclusions

Book Review
Peer lending is a relatively new addition to the personal finance industry. Anytime something new and different is introduced people look for resources to help them understand the new development. After reading through the The Complete Guide to Prosper, I think it would be a good resource for anyone that’s heard about peer lending but isn’t really sure how it works or how they could benefit from it. 

Book Launch Special Offer
The book goes on sale today on and as part of the book launch the author is offering several bonus gifts to anyone that buys it within the first 24 hours.  You can see the details of the offer and how to claim it here.

If you’re interested in learning more about peer to peer lending, I have an extra copy of The Complete Guide to Prosper that I’m giving away. I’d prefer to ship the book to someone that will make good use of it, so I’ll mail it to the first person that opens a Prosper account through this link and sends me an email with their new Prosper screen name.  Hopefully the book will guide you through your first borrowing or lending experience on Prosper.


Will this article help you save or earn more money? Get others like it simply by entering your email address below. Your email is used only for delivering daily money tips and you can opt out of delivery at any time. Click here to see all your free subscription options.


Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

All posts by


3 Responses to The Complete Guide to Prosper Review – Will Revolutionize America?

  • Ben

    Stephen, great example of the value of Prosper for borrowers, nice return on your investments as well.

    It will be interesting to see how many borrowers and lenders there will be on Prosper as the Fed continues to cut interest rates.

  • Stephen Oakes

    I have been lending & borrowing through Prosper for about two years now and love it! I decided to do a little experiment on the borrowing side. Went to a major national bank and Prosper for an unsecured loan for the same amount of money (my credit score was 783).

    Landed an 8.8% interest rate with Prosper and 13% with the bank. Kudos to Prosper!

    On the lending side, I’ve established 90 loans with AA, A, and B rated borrowers and am earning 11.90% on my money. Loving the new personalized portfolio plans. Now that Prosper has a history of loans, they were able to introduce an ROI calculator based on your lending criteria.

    Passive income is quite addicting…what a great time to play the cashflow angle while the market comes crashing down 🙂


  • tracy ho

    Great to read your post ,

    All the best ,

    Tracy Ho