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With Prosper loans, I’ve often suspected that there is a direct correlation between default rates and length of employment but had never checked my suspicion against Prosper’s performance data.

It appears that yes, there is certainly a correlation. At all employment levels the rate of default drops. Default rates for people employed 10+ years is less than half of the rate of people employed for less than 6 months. Generally, people employed more than 1 year have a substantially lower default rate, but the best performance are those steadily employed for the longer period of time.

Personally, I had expected a higher disparity between the length of employment ranges but there is enough evidence to support the conclusion that people employed more than 10 years are the safest risk.

For any borrowers employed more than 10 years, you should make a point of this fact in your listing.


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