Here is the raw data for the counts of each type of loan broken down by credit grade and DTI buckets:

Although there cannot be any real concrete conclusions drawn from this analysis, due to the low number of loans thus far, I think it is safe to say that there is a general increase in default rates as one’s DTI increases. This increase in default rate is even more visible as credit grades get lower and lower. It is also interesting to note that rarely does the default rates of one credit grade overlap with that of another (based on the graph above with the maximum DTI being 59.55%). This means that more attention or weight should be given to credit instead of the borrower’s DTI.

You may also be interested in reading the following posts:

• Taking into account the Prosper fees and net default rates, which credit grade will have the highest return of investment (ROI)?
• What interest rate should I use when bidding on a loan?
• How much money should I bid on Prosper loans?

Glossary for status of loans:

• Defaulted – The loan defaulted
• Paid In Full – The load was paid in full
• Repurchased – The loan was repurchased by Prosper

If you have any comments or suggestions to add to this list, please feel free to comment below.

To see the counts, just hover over the word with your mouse and the counts will be displayed for both types of listings in that rank. They were hidden to avoid clutter but I know some of you may be curious anyway. The non-funded word counts will always be higher (roughly 4X) so that is why I chose to order them by rank so we can make a comparison.

To display the top 1000 word rankings, 2 tables were created side-by-side for easy comparison. The table on the right contains the word rankings for the funded listings with the right column being the ranking of that particular word in the non-funded listings. The table on the left contains the word rankings for the non-funded listings with the right column being the ranking of that particular word in the funded listings.

To assist in spotting any significant differences in rankings, the words have been color-coded:

• Blue – The Rankings of these words are >1.5X to 2.0X that of the same word in the complementary table. For example, the word payments ranks 14th in the Funded listings but 28th in the Non-Funded listings.
• Green – The Rankings of these words are >2.0X to 2.5X that of the same word in the complementary table.
• Orange – The Rankings of these words are >2.5X to 3.0X that of the same word in the complementary table.
• Red – The Rankings of these words are >3.0X that of the same word in the complementary table.

Wow, I’m impressed that you made it all the way down here. Fortunately, a lot of the activity is in the top 50 words. I’m not exactly sure what I can say from this analysis except that it was fun to do. Instead, I’m hoping that some of you may want sure your thoughts on this one.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year
• Which day of the week should I end my listing?
• How do I create a successful listing on Prosper?

Glossary for status of listings:

• Completed – The listing ran to completion and funded
• Expired – The listing failed to fund in time

Here is the raw data:

The listings with 100% funding had, on average, 36.4% more content than listings that expired without full funding. This makes a lot of sense: lenders are more comfortable bidding on listings that they have a lot of information about. Lending money to a complete stranger is tough enough, but lending money to a complete stranger with nothing to say is even tougher. There are a lot of factors that you do not have control over in the listing, but what you do have full control of is what you want to say in the description. Take advantage of this opportunity and write in detail what you plan on doing with the loan and prove that you are able to pay the money back. If there is anything negative in the listing such as a delinquency or public record, explain why this has happened to you and how you plan or planned to alleviate it.

In response to NewHorizon’s suggestion in the Prosper forums, I broke down the data by credit grade to see if there was anything misleading.

Here is the raw data:

The results are very interesting. Except for the NC group, there is a steady increase in content for funded listings as the credit grades get lower. The overall average of content between funded and non-fundings listings, 36.4%, was indeed askew due to the large number of HR listings where the funded listings had 75.2% more content than non-funded listings. Also, the dates used for this dataset is slightly different than the original: 2/2/06 – 11/3/07.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• The Top 1000 5-letter Words in the Description of Funded Listings vs. Non-Funded Listings
• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year
• Which day of the week should I end my listing?
• How do I create a successful listing on Prosper?

Glossary for status of listings:

• Completed – The listing ran to completion and funded
• Expired – The listing failed to fund in time

The spike in activity between 2:00pm – 3:00pm PST corresponds with the timing of the funding for funds transfers. Once a lender receives the funding, he or she will usually take immediate action by manually bidding, utilizing the standing orders, or using the portfolio plans. Borrowers should definitely be ending their listings between 2:00pm -8:00pm PST in order to take advantage of this bidding activity.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• The Top 1000 5-letter Words in the Description of Funded Listings vs. Non-Funded Listings
• Which day of the week are lenders most active in bidding?
• Which day of the week should I end my listing?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year
• Does the amount of content in the Description of my Listing really matter?
• How do I create a successful listing on Prosper?

Glossary for types of bids:

• Winning – A bid that is winning in the full dollar amount
• Withdrawn – A bid that was withdrawn by the lender
• Outbid – A bid that was outbid by another bid due to a lower lender rate
• Partially participating – A bid that is partially outbid by another bid

Here is the raw data for the pie chart:

As you can see, Thursday is the most active day for lenders with Wednesday being not too far behind. If you are a borrower, you definitely want to end your listing on a Wednesday or Thursday to have a better chance of funding for your listing and have it become a loan.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• What time of the day are lenders most active?
• Which day of the week should I end my listing?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year
• Does the amount of content in the Description of my Listing really matter?
• How do I create a successful listing on Prosper?

As the data suggests, there is good and steady growth of both borrowers and lenders on Prosper.com.

Although there was a slight decline in the ratio of borrowers to lenders, the chart seems to have flattened out and staying constant at just under 2. This means that for every 2 borrowers, there is about 1 lender on Prosper.com.If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• Default Rates broken down by Credit Grade and DTI Buckets
• The Top 1000 5-letter Words in the Description of Funded Listings vs. Non-Funded Listings
• Which day of the week should I end my listing?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year

To find out if certain weekdays are better than others, I have utilized the Prosper.com API to obtain the statistics for each day of the week. I have queried all the listings dating from 10/28/06 to 10/28/07 except for the ones that are still currently active. Please note that this data includes listings that have been withdrawn or canceled.

According to the statistics, the best day of the week to end a listing is Wednesday. I think there are several factors at play here:

• Funding into Prosper accounts – Funding into a Prosper account can only happen on workdays so most of the bidding activity coincides with that.
• Coincides with Highest Bidding Activity – Wednesdays and Thursdays are the days in which lenders are most active in bidding.

Ending your listing on this day may improve your odds of being funded by about 1.9% and becoming a loan.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• How long should I have my listing for?
• Loan calculator with statistics for all listings from the last past year
• Does the amount of content in the Description of my Listing really matter?
• How do I create a successful listing on Prosper?

Glossary for status of listings:

• Active – The listing is current active in the marketplace
• Withdrawn – The listing was withdrawn by customer request
• Canceled – The listing was canceled by Prosper

I have utilized the Prosper.com API to obtain the statistics that I hope can guide you in answering this question. I have queried all the listings dating from 11/5/06 to 10/27/07 (almost a year’s worth of data) except for the ones that are still currently active. The listings has been broken down according to the duration that they were listed for and whether they were 100% funded or not. Please note that this data includes listings that have been withdrawn or canceled.

Statiscally speaking, listings with a duration of 5 days have a better chance of being fully funded. The total number of listings with a 5-day duration is about 6 times smaller than the 7-day listings but I still think that 3191 is a large enough pool for the result to be statiscally significant. From a lender’s perspective, I like to bid on listings that are about to complete rather than wait 10 days for a listing to complete. Otherwise, the money would basically be in Limbo for 10 days instead of in the hands of a borrower. One could argue that a 10-day listing could get more exposure (and I am sure that it does), but it does not get the funding and that is the bottom line.

If you have any requests regarding statistics that you would like to see, please let me know. If it’s feasible, I will try my best to make it happen.

You may also be interested in reading the following posts:

• Which day of the week should I end my listing?
• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• Loan calculator with statistics for all listings from the last past year
• Does the amount of content in the Description of my Listing really matter?
• How do I create a successful listing on Prosper?

Glossary for status of listings:

• Active – The listing is current active in the marketplace
• Withdrawn – The listing was withdrawn by customer request
• Canceled – The listing was canceled by Prosper

Credit grade	AA A B C D E HR
Loan amount requested	$1000 – $1999 $2000 – $2999 $3000 – $3999 $4000 – $4999 $5000 – $5999 $6000 – $6999 $7000 – $7999 $8000 – $8999 $9000 – $9999 $10000 – $10999 $11000 – $11999 $12000 – $12999 $13000 – $13999 $14000 – $14999 $15000 – $15999 $16000 – $16999 $17000 – $17999 $18000 – $18999 $19000 – $19999 $20000 – $20999 $21000 – $21999 $22000 – $22999 $23000 – $23999 $24000 – $24999 $25000 – $25000

Please note that I have noticed issues with this tool when using IE6 or FireFox on a Mac. I will look into it and try to fix the bug. In the meantime, if you would like to utilize this tool, it is best to use FireFox with a PC or Safari on a Mac.

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You may also be interested in reading the following posts:

• Default Rates broken down by Credit Grade and DTI Buckets
• The Top 1000 5-letter Words in the Description of Funded Listings vs. Non-Funded Listings
• Which day of the week should I end my listing?
• How long should I have my listing for?
• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• Does the amount of content in the Description of my Listing really matter?
• How do I create a successful listing on Prosper?

• Endorsements from Friends – These are recommendations made by other members of the Prosper community that give credibility to the borrower. There are several different types of endorsements and they can be identified by these icons:
  
  If the identity of the endorser has not been identified yet by Prosper.com, then the first icon will appear in the listing. If the borrower is part of a group and receives an endorsement from the group leader, the second icon will be displayed. If an endorser actually bids on the listing, you will see the third icon with the dollar amount of the bid. The best types of endorsements consist of the following:
  1. Friends or Prosper members who have actually placed a bid on the listing. This not only gives credibility to the endorsement but it also shows the confidence that they have in the borrower.
  2. A personal photo of the endorser is always a plus.

  Endorsements will also drive the borrowers to pay on time because if they are late on their payments, the endorsers them will receive an email notice of that.

• Clean history – This probably does not need to be reiterated but borrowers who have 0 delinquencies tend to stay that way. These people understand the importance of having a good credit score and have clearly shown their ability to maintain a clean record. I have started to accumulate some data regarding the loans that are late and the one common theme is that most of them have been delinquent in the past.
• It’s all in the Description – OK, that might be an exaggeration but it can definitely give an indication. On looking back at the 2 loans I have that are 4+ months default, I noticed one obvious thing they had in common:
  
  The borrowers did not bother to write the purpose of their loans or their financial situations. I’m not sure if they were just lazy or had something to hide, but this should definitely draw up a red flag. This situation is analogous to receiving someone’s resume and noticing that the skills or experience section is blank or missing. Looking back now, I can not believe at the dumb mistakes I have made when I started out. This is also the type of thing that you cannot filter for in a standing order or a portfolio plan and this is exactly why I choose all my loans by eye.
• Going, going, gone – Bidding on Prosper is very similar to bidding on eBay: most of the activity happens in the last couple of hours. I recommend bidding during the last couple of hours of a listing instead of a listing that is still opened for 7 days. The reason being that your money will be tied up for 7 days doing absolutely nothing. You mind as well have placed a bid on a listing that was ending soon so that you can start earning interest as soon as possible. Time is money and in the long run, this will have a huge impact.
• Loan amount < $10,000 All Prosper loans have a 3-year term. This short duration equates to higher monthly payments that could overburden borrowers who are used to long-term loans.
• Percent funding – Do not waste your time and money on listings that are not funded. I usually look for at least 90% funding before I start to bid because these listings have the best chance of becoming a loan. Here is a tip for the busy or the lazy: make other bidders do all the work and look for and bid on listings that have 100% funding. This can save some time and also serves to weed out risky loans.
• Personal photos – Listings with actual photos of the borrower tend to be more personal. Not only are they willing to put their face out there, but this shows some sort of commitment. With their faces out there on the net, these people tend not to default as often as those utilizing the default icons.
• HR credit grade = bad – Do not risk your money with HR listings. The return is extremely low and risky. In fact, HR listings have the worst returns.
• Credit Inquiries in the last 6 months – I would stay between 0-3 inquiries within the last 6 months. If the number is greater, you are putting your money at risk.

You may also be interested in reading the following posts:

• Default Rates broken down by Credit Grade and DTI Buckets
• Taking into account the Prosper fees and net default rates, which credit grade will have the highest return of investment (ROI)?
• What interest rate should I use when bidding on a loan?
• How much money should I bid on Prosper loans?

If you have any comments or suggestions to add to this list, please feel free to comment below.

Update: Please note that all Prosper loans are 3-year terms and Prosper has only been around since February of 2006. This means that there is not enough data to in giving accurate default rates based on the historical performance of Prosper loans. Prosper is still young and needs to mature in order to obtain accurate statistics. Right now, we can only extrapolate and predict with the limited amount of data that we have.

The default rate is the Experian historical average by credit grade for borrowers with debt to income ratios of 20% or less. The average lender rate is derived from all Prosper loans between the dates of 6/1/2006 to 9/20/2007.

The default rate is from Prosper loans between the 6/1/2006 to 9/20/2007. The average lender rate is derived from all Prosper loans between the dates of 6/1/2006 to 9/20/2007.

According to the second table, loans from borrowers with a D or E credit rating will have the highest ROI. Please note that if you plan on bidding on these types of loans, you should always use the minimum bid and have a large portfolio (or at least plan to have one). These 2 credit grades make up the majority of my portfolio and I am currently seeing some very nice returns. Another clear message from these 2 tables is to stay clear from bidding on borrowers with an HR rating. It is extremely risky with very low returns.

One interesting note from these 2 tables is the difference in default rates. The default rates on Prosper loans is consistently higher across the board for all credit grades. After thinking about this a bit, I think that it makes a lot of sense. Borrowers who are looking for loans will usually use traditional methods such as applying for credit cards or loans from banks. Many of the Prosper listings could have been from people who were initially rejected using traditional methods so that can explain the higher default rates. Of course, I am not a professional credit analyst but that is my 2 cents.

One anomaly that you might have noticed is the spike in default rate for the C credit grade borrowers in the second table. I do not know how to explain this but it might have something to do with how Prosper assigns these credit grades.

The breakdown is as follows:

You may also be interested in reading the following posts:

• Default Rates broken down by Credit Grade and DTI Buckets
• How do I choose a Prosper loan to fund?
• What interest rate should I use when bidding on a loan?
• How much money should I bid on Prosper loans?

• Information – The more information there is, the better. Try to give explanations if you have a delinquencies or public records. It would also be good to make your questions and answers public because if one lender has that question, I am sure there will be others that are thinking the same thing. Some lenders also do not have the time to be asking all the questions that he or she has so they just might skip to the next listing. It is much better to see an honest answer than to see nothing at all.
• Forums – There is a wealth of information in the Borrowers Forum at Prosper.com. Finding the forums is a bit tricky: you have to click on the Community tab and then click on Forums. Feel free to browse through all the tips that are already there and if you cannot find what you are looking for, do not hesitate to create a new post with your question(s).
• Honesty – It is always best to be honest. Prosper goes through a rigorous verification process and they will be asking for proof in what is stated in the listing. Although I do not have actual numbers, I do find many listings getting rejected even after it was fully funded because the borrower was not able to back up the information given in the listing.
• Credit score – This is equivalent to the SAT scores needed to apply for college: the higher, the better. If you have some extra time before creating your listing, you might want to look into how you can improve your credit score.
• Spelling and Grammar – You must think of this as a job application or a resume. I’m sure you’ve heard of this before but if a potential lender has 2 identical listings except that one of them has a couple of typos in it, guess which one he is going to pick?
• Endorsements – Endorsements can make a huge impact especially if they bid on your listing. It is very similar to the References section of a resume except that lenders cannot call them to talk to them in person. That is why the bid is very important as it adds credibility on the endorsers behalf. They are backing up what they say by placing that bid.
• Timing – To maximize the probability of your listing being 100% funded, try to end the listing on a Wednesday or Thursday between the times of 2:00pm – 8pm PST. These are the times when bidders are most active and if your listing is almost ending at this time, you will receive more exposure in the lending listings page.

You may also be interested in reading the following posts:

• Which day of the week should I end my listing?
• Which day of the week are lenders most active in bidding?
• What time of the day are lenders most active?
• Loan calculator with statistics for all listings from the last past year
• How long should I have my listing for?
• Does the amount of content in the Description of my Listing really matter?