David Lê, ThinkViet

How Do Lenders Place Bids?

To bid on loan listings on Prosper.com, you must be a registered lender, and you must have transferred funds to Prosper. Once you have done this, go to the “Lend” tab to search for a loan listing that you would be interested in bidding on and click on that listing’s title.

The loan listing page will give you several pieces of important information: the Requested dollar amount that the borrower wants to borrow, and the Lender rate, which is the current rate that lenders must bid at or below. If the loan is fully funded (there are enough bids to match the loan amount requested by the borrower) and the borrower is not requesting Automatic Funding (see below), lenders will have to bid less than the current listed interest rate to be a “winning” bidder on the loan.

The loan listing page will also show the number of Bids that the loan listing has already received, the amount that has already been Funded by bids received by the listing, and the Time left before the listing is ended, and whether the borrower has selected Automatic Funding, which means that the loan will be immediately funded once the full amount has been bid. This occurs when the borrower is more interested in getting his loan funded quickly rather than in waiting for more bids to give him the lowest possible interest rate. Lastly, the loan listing page will also show the Borrower Rate, APR (Annual Percentage Rate), and Monthly payment.

To begin bidding, click on the “Place Bid” button. You will then be asked to fill in the Amount of your bid, which can be as low as $50 or as much as the entire amount requested in the loan listing, and the Minimum rate, which is the minimum interest rate you are willing to receive on the loan. Unlike some other auctions, Prosper bids on your behalf down to your minimum rate, and if there are multiple winning bidders on a listing, all of the winning bidders get the highest interest rate among the rates specified by the winning bidders. This means that if you are a winning bidder, the interest rate may be higher than the minimum rate you indicated in your bid. How’s that for a nice surprise?

After clicking “Continue”, you will see the bid data you provided on the previous page, and you will need to confirm your bid after reviewing this data. Before you click the “confirm bid” button, you must be aware of the following important things:

• When you place a bid, funds are immediately set aside from your account for the bid;
• By placing a bid, you are committing to fund the loan should your bid be matched;
• If you are a winning bidder, funds will be automatically transferred from your account to the borrower’s account when the listing closes;
• If you are not a winning bidder, funds will be immediately made available for you to bid elsewhere; and lastly,
• Bids cannot be withdrawn at any time.

Bid Automatically On Loan Listings You Pre-Select

If you don’t want to manually pick each of your bids, you can bid by using a “standing order,” and have bids placed automatically on your behalf based on criteria you specify. Find out more about this and other interesting features of bidding on Prosper loan listings by browsing the next page in this series, Earn Interest on Loans to Other People.

David Le is in charge of marketing and public relations at ThinkViet. He can be reached at david@thinkviet.net.