The watch list is one of the most useful tools on the website. It allows you to track what other lender’s are bidding on as well as track what your friend’s are doing.

You can use a watch list to:

• Create an aggregate watch list profile consisting of multiple lenders.
• Track multiple lenders and see what they bid on.

This tutorial shows you how to create and manage a lender watch list.

• Step 1. Create a watch list by entering a watch list name. Pic #1
• Step 2. Click into the watch list you just created. Pic #2
• Step 3. Add lender(s) to your watch list. Pic #3
• Step 4. After your done adding lender(s) to your watch list, click the Summary, Loan Portfolio and Bids tabs to view the aggregate watch list portfolio. Pic #4

I was looking through the forums today and decided to write a quick guide for new lenders. Hopefully this will save new lenders time and money.

1) Don’t invest in HR rated loans.

You will lose money in them. Here is a month by month breakdown of HR loans and delinquency rates. HR Delinquency Rates

2) Do not fall for sob stories, pretty pictures or empty promises.

This one is extremely hard to do. I’m guilty of this on multiple occasions. If you ever need a reminder of why just look at these 2 loans I made Listing 3151, Listing 4038.

3) Do a lot of research before you start investing. If you found this website then you are on the right track. Another nice place for information is the Prosper Forums.

4) The Experian Default Rates on Prosper are best guess estimates so take them with a grain of salt.

5) Set up minimum interest rates for every credit grade you want to bid on and stick to them.

This means you should not chase good loans down to ridiculously low interest rates. Whatever value there was in the loan would evaporate if the loan gets bid down too low. A good loan might even turn into a bad loan once the rate drops to low.

6) Make sure you account for Prosper loan servicing fees and Group fees when you bid on a listing.

7) If it’s too good to be true… Don’t bid on it.

e.g. AA credit, no delinquencies, 0% DTI, max interest rate and automatic funding.

8) Take endorsements and large bids from group leaders with a grain of salt.

If you see a large bid by a borrower’s group leader initially don’t take it as a guarantee that the borrower will pay. Often times a group leader will bid a large chunk initially on a loan in order to attract other lenders to bid on the loan. The large initial bid made by the group leader will fall off the listing once enough lenders have been sucked in. (pump and dump? not quite but close)

9) Check for inconsistencies when you are bidding on a listing.

Check to see that the story does not change from a previous listing they have made. Did the borrower change the reason for the loan from paying the rent to buying a car?

Check to see that if the numbers make sense. If the borrower says he/she makes $3000 extra a month but needs a 3 year loan for $1000 something is wrong.

10) Start investing in small amounts. You are bound to make errors at the beginning while your learning so make those losses small.