Northbound

I have a few extra bucks to throw around this month, so I put them into an account on Prosper.com. If you haven’t checked out Prosper, it’s a site where you can finance loans to people who can’t get them any other way. As a lender, you pool small amounts of money with lots of other lenders to finance small, high-interest loans to people, generally who have dings on their credit. If the people you loan money to pay up, you get a very tidy return on your investment. If they default, well…

You get nothing! You lose! Good day, sir!

I haven’t made any loans as of just this second; I’m still trying to learn how the system works. But I am already developing some rules of thumb about which loans not to make, which I present as a primer for anyone seeking to borrow money through Prosper.com (first in a series; the second part is here):

1. Don’t sound desperate. I have this at the top of the list because it’s at the top of the list. If you sound like you’re desperate, if your user name implies that you’re starving to death, if you use terms like “help me get back on my feet” or “making amends for misspent life” or anything like that, there is no way I am loaning you any money. If you don’t do anything else on this list, at least sound positive.
2. Say something. If you leave the “description” field blank, I don’t have anything about you to go on and I’m not loaning you any money. It’s like asking for a job interview without enclosing a resume. Sorry, not interested.
3. Learn how to spell. You can get away with one typo, I guess, but if there are multiple misspelled words in your description, I am not loaning you one red cent. I could not be more serious about this. If you don’t know how to spell, go to the library and run your copy through the Microsoft Word spell-checker. You don’t even have to do that — just go through Spellcheck.net or something. If you can’t spell, that tells me you don’t have an education, and if you don’t have an education, it’s unlikely that you’ll be paying me back.
4. Be specific. If you tell me you need the money to start a small business, tell me what the small business will be doing. If you have a good business plan, it’s a lot easier to say yes. But if there absolutely aren’t any details, it’s very easy to say no.
5. I am not paying for you to go on vacation. I am not lending anybody any money to buy a bass boat, either, or any consumer product that I don’t own or that is nicer than what I myself already have. I am double-especially not paying for your season tickets to a sports event. This is a mean, cruel, narrow decision on my part. I know that, and I don’t care. Any money I loan you for a vacation is money I can’t spend on my own vacation, so bite me.
6. I don’t care about your dreams. Really. I have my dreams, and you don’t care about them, do you? Of course you don’t. And if you use the word “miracle” or “angel” in your description, I’m not even going to think about loaning you any money. I am not your angel or your miracle. I’m not loaning this money out of charity, but out of a bare and naked desire for personal profit. If that bothers you, sorry.
7. I’m not loaning any money for anything that’s obnoxious. Someone is out there right now trying to borrow money for an infomercial. Drive through, next customer. And I am for sure not going to loan you any money to turn around and make more loans on Prosper. What am I, an idiot?
8. I’m not loaning you any more money to buy an engagement ring than I spent on buying the ring for my wife. If you are dumb enough to listen to those “two months salary” people, I am not going to loan you any money.
9. If you post a picture, don’t make it a kitten or a rainbow. I’m just picky that way.
10. If you repost your loan eight times, and nobody bids on it, there’s probably a reason. Think about it.

One thing to keep in mind here is that I am looking for a reason to say no. I am only going to say “yes” if I’m convinced that any given loan is a good investment, and that I’m going to get my money back. As a borrower, you’re competing with every other potential borrower, and given the sheer amount of people who want to borrow money, that’s a very tough competition. Following these little guidelines won’t guarantee that you will win, but it may help you do better.