♫ Where have loan descriptions gone, since last Monday?
Where have loan descriptions gone, we need them now.
Where have loan descriptions gone, gone from Prosper, every one.
When they bring them back, when will they bring them back? ♫
Apologies to Dylan. Listings posted to Prosper starting Monday, 9/9/13 do not show a description field.
It appears this was intentional. From
Prosper's blog post regarding the latest "upgrades":
Improved borrower experience: We've recently released an optimized borrower experience on our website which will provide a smoother onboarding process for new borrowers. These changes include increased access points to customer service assistance (added an 800 number for live customer service), fewer field requirements, and a streamlined application process.♫ We don't need no loan descriptions
We don't need no fields at all
No information for loan decisions
Hey! Prosper! Leave our *** alone. ♫
My apologies to Floyd.
+1
I too was surprised by this and contacted Prosper directly, to have them confirm this. This is the end of my Prosper investing. I looked at the loan description field as an important connection between the person requesting the loan and the investor. I passed up many loans simply because they had no listed reason or purpose for the loan. I also passed up many others because the requester could not write well enough to get their reasons across, so to me they were a poor risk. I will let my current notes run their life, but I will no longer invest in new notes with Prosper.
I have to say I am very let down by this action by Prosper. I truly enjoyed supporting people with my funds (though limited compared to many) and really liked to scrub the requests to pick out the best, but without the loan description field available to "connect" with the applicant, I'm done.
I have to wonder what Prosper was really thinking. How long does it take to type a one-line description? Maybe 15 seconds, and that's if you're missing half of your fingers from a shop accident. Now there isn't a single thing left that the borrower has actually typed himself. They're trying to commoditize these loans which is an error and it will not work out well for the individual investor. This is one step closer to the European socialist lending sites where everything's just thrown into a pool, you get no information, and everyone gets the same return.
I remember the Prosper loan descriptions that had a long column of the borrower's estimated monthly expenses: rent, utilities, car payment, credit cards, medical, food etc. I don't know if that was a form they had to fill out or a suggested format for the loan description. I think it was easy for them to fill in the monthly payments such as rent or mortgage that are the same every month, but harder for some other expenses. Most people have a hard time tracking exactly how much they spend on variable expenses like food (groceries and eat out) unless they have carefully tracked it before. I used to laugh at the loans where the borrower estimated they spent $50 a month on food. Could be true if they are still living with parents. So I can see how borrowers might be put off trying to supply all these estimates if they don't already have then within easy reach.
Here is a loan description from one of my Prosper loans made in August 2008 (by the way, my favorite Prosper loan whose borrower made all 36 timely payments on the loan at interest rate of 26.75%. So I made a profit of $23.34 on a $50 note.)
Purpose of loan:
This loan will be used to pay for Medical Expenses not covered by Medical Insurance.
My financial situation:
I am a good candidate for this loan because my job is solid during this uncertain time with the economy. I have very little debt. My car is paid for. I also, have a large amount ($1,638) of disposable income left over each month after all bills and expenses have been paid.
Ran into a little financial difficulty during 2002 and 2003 when my airline job was eliminated after the events of 911. Have been financailly solid for the last several years.
Monthly net income: $3,149 (Monthly gross income $4,333)
Monthly expenses: $1,511
Rent: $959
Electric: $25
Gas: $6
Cable: $24
Cell Phone: $62
Food: $250
Auto Insurance $39
Auto Gas: $40
Credit Card: $28
Health Insurance: $78
MONTHLY LEFT OVER INCOME $1,638
My view when I first started with Prosper was that these loans would be peer-to-peer; I do not see how that is really the case if we know nothing of the individual and the purpose of the loan request. It's more like peer-to-computer screen. It is an unfortunate step (leap) away from true P2P investing in my opinion by taking away knowledge, however limited, of the individual.
I will continue to divest from Prosper and return my funds to my bank rather the reinvesting in other notes. I'll miss reading through the notes looking for the golden gem. I really liked finding the notes for the service/military personnel; being a vet myself I liked the thought of assisting other vets, but I see no way of finding those anymore with these changes.
Best wishes to all.
I found the descriptions useful in eliminating "liar loans", like the Title was "debt consolidation" and when you read the description it would say things like "buy a used car for my son to take to college" or "pay off my daughters debts". lol
Again, I only read the descriptions on loans I was about to make it was the last thing I did. And the only use of the description I found was to change my mind when the borrower said something "dumb".
I will miss them.
If they previously asked for a 2000 word essay like the one PennySaved posted, then I can see that turning people away. Just a short title is all I would ask, like Lending Club has. But the "titles" are also all gone... aren't they? They all say the same generic thing which is just the selected loan purpose.
Keep in mind the Prosper's philosophy is the exact opposite of Lending Club's as far as approving borrowers goes: LC carefully screens borrowers and rejects 90% of them, whereas Prosper goes for quantity over quality (nothing wrong with that), just letting the majority flow right through and leaving it to the investors to sort things out. But tell me: How are we supposed to do that when we have no information?
Dan, you just proved my point. You used the following phrases in your post, in order:
"who meet their general requirements"
"meet the minimum requirements"
"meet their minimum requirements"
"meet their general requirements"
You used those phrases to contradict what I said. On what basis do you think LC rejects 90% of its applicants? Wrong "kind of person"? Because they are communists? No, obviously they don't meet LC's requirements. By LC setting its requirements as it has (including the application process), LC has excluded 90% of its potential customers. Same as all the rest of the entities I listed. They have excluded a large percentage of their potential customers because of their minimum requirements. With the exception of Amex, which was more of a joke because they didn't see fit to give me one.
As for the Prosper numbers I don't have them in front of me. I will try to locate some up this evening.
I see. So in your mind a "potential customer" is one who has already met the minimum requirements and wants to be a customer on the given terms.
In order to get a LC loan (and be labelled a "potential borrower" in your eyes) then you must:
- Meet the creditworthiness requirements
- Be willing to pay the origination fee and interest rate
- Have the patience to sit through 15 minute phone interviews and whatever else they ask
- Want the loan
Using that definition of potential customer then it would seem LC approves 100.00% of potential borrowers who apply. Not 10% as I previously misstated. I'm glad we got that settled.
<distributes OCD meds>
Dan, I think we are simply arguing over what the definition of "is" is. You must be a Bill Clinton fan? (Errr... given your colorful background perhaps that's a name I shouldn't have brought up.)
I hate that they got rid of the descriptions. The number of spelling mistakes in a listing was the single strongest adverse indicator that I have ever found. Truth be told, its significance declined in 2012 and 2013 as the average length of the description declined (and many applicants wrote nothing at all). Unsurprisingly, the number of complete sentences was a very good positive indicator.
Like you said, words like "bankruptcy" or "divorce" were strong adverse indicators.
Ah, I always wondered how you managed such nice returns, Marin... Your name would come up near my nonattender account whenever I
was comparing my returns with other Prosper investors (back when that was possible). I've fallen a bit, at around 17% (with seasoning).
I funded a loan yesterday (9/19) that came up with a full discription filled out.
No it wasn't one from weeks ago but a new posting on 9/19 unless of course something weird happened and it sat somewhere for weeks in someone pending box?
Even though these listings didn't start until after the change, the listingcreation date from the API denotes that they were created prior to it. Such listings are very rare just 15 since 9/16.
i liked using the loan description as a final barometer on buying into the loan im not sure that it will change my lending with prosper but i would prefer that it at least be put back as optional to fill out.
Addressing the removal of the Loan Description & Loan Details Fields
by Prosper on 09/20/13
Addressing the removal of the Loan Description & Loan Details Fields
Some of our lenders have expressed concern with the recent removal of the loan description and loan title fields on the Prosper borrower application. I want you all to know that we hear your concerns. This is something that we are currently testing. We have not made the decision to permanently remove these fields at this time.
I would like to take a moment to explain why we removed the fields and why we believe it will have a strong positive impact for our lenders long term.
■Created Confusion – In recent user testing, we found that borrowers were significantly less likely to complete a Prosper loan application when they were asked to provide a Loan Description or Loan Title. Borrowers found this question to be intrusive and, in many cases, confusing to their private loan application process. These fields proved to be the biggest drop off point for potential borrowers. We removed them to gauge response for a period of time.
■Supply and demand – We strive to have an onboarding process that is simple and easy and makes sense to users. The more simple a process can be made, the more potential borrowers we can reach. In order for Prosper to better streamline the borrower application and meet the demand that you all have expressed for new loans, we will consistently make changes to our platform that we believe will positively impact the way users interact with our product and ultimately, the way the platform performs.
Ultimately, we understand your concerns, and we are exploring the best way to meet both the lenders' concerns and improve the borrowers' experience at equal measure, including adding the field back in the near future. Standby for updates on this potential change and more as we begin to interpret its impact on our platform.
Aaron Vermut
President, Prosper Funding LLC
Like Peter, I support this move. Here's my reasoning which I also posted as a comment on the Prosper blog.
Prosper: I very much appreciate your willingness to listen to lenders. That said, I'd like to let you know that there are those of us who don't mind the change (although we may not be as vocal as those who want the descriptions back). I've been lending for 3 years, and I've learned from experience that the loan descriptions have not actually helped me find quality borrowers. Looking back at some charge-offs, I can see that many of these borrowers described themselves as completely trustworthy -- and maybe they were and just fell on hard times. However, I've seen that other fields like delinquencies, income, debt, etc., are much more important to analyze as a lender. I think this would come as no surprise to those who study the data.
Therefore, my suggestions are two-fold:
1- Try to listen to lenders by considering easy / optional ways for borrowers to include descriptions. My idea: Give borrowers the option to add a description AFTER their application is complete. That way, the application is already done so they won't drop it, but they can still add it if they choose to.
2- Try to educate lenders about how to choose loans using the data in the Credit Profile (then they might not miss descriptions so much). I personally think some lenders (including myself) put too much weight on the description in the past because it was a narrative and made sense to them, and perhaps they weren't equipped to look at the other data. My idea: Maybe create a short animated video that describes the Credit Profile data, how to read it, and why it matters. (Many people are more likely to watch a short animation than read a report about seasoned returns or download your performance data).
I think your first suggestion is excellent. It alleviates the borrower of feeling required to write something and not pursue the loan further while still allowing the option for those borrowers so inclined. Leaving it entirely optional after completing the loan application should satisfy both Prosper and lenders. The borrower is locked-in and investors have the opportunity to read a borrower description.