Prosper Marketplace
Prosper Marketplace, Inc. is a San Francisco, California-based company that operates Prosper.com, an online auction website where individuals can buy loans and request to borrow money. Borrowers set the maximum interest rate they wish to pay[1], and loan buyers, called “lenders,” bid on specific loans by committing a portion of the principal and setting the minimum interest rate they wish to receive on a particular loan[2]. Prosper manages the reverse dutch auction, assembling bids with the lowest interest rates in order to fund the loan. Prosper verifies selected borrowers’ identity and personal data before funding loans[3] and manages loan repayment. These unsecured loans are fully amortized over three years, with no pre-payment penalty. Prosper generates revenue by collecting a one-time fee on funded loans from borrowers, and assessing an annual loan servicing fee to loan buyers.
