Are Good Loans Harder to Find? | P2P Lending, Peer to Peer Lending, People to People Lending

I have been reading quite a few comments lately about how good loans are becoming harder to find on Prosper. I thought I would look into this matter using the public data dump and crystal reports. One caveat, not all information is in the public data dump that is available to lenders (for example extended credit information), so this analysis will have to be fairly simple. Again this is derived from the data available the morning of 1/10/2007.

OK so lets take a first pass… how about a graph for a given credit grade and debt to income ratio range that shows average lender rate over time? For the following graphs I chose DTI less than or equal to 20% and averaged all interest rates in a credit grade over a day.

AA

AA Credit average Interest Rate Over Time

A

A Credit average Interest Rate Over Time

B

B Credit average Interest Rate Over Time

C

C Credit average Interest Rate Over Time

D

D Credit average Interest Rate Over Time

E

E Credit average Interest Rate Over Time

HR

NC

My initial conclusion looking at the graphs is that other than at the very beginning of Propser’s existance (first 2 months) the interest rates look stable.

But I think there are 2 major problems with the graphs I produced: one is fixable and one will just take time. The fixable problem is that I should be showing a weighted average for a period of longer than a day. That is I should be showing a bar on the graph for every two weeks and the interest rate average should be a weighted average based on loan amount. The other problem is that prosper is a relatively young and small community (compared with auto loans for example) and that causes the data set to be minimal. I will work on cleaning up the fixable problem and post an update later.

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