Prosper is Baaacckkkk….

Leading online social lending platform Prosper.com has the green light to facilitate personal lending in most states. In case you're not familiar with Prosper, they were one of the first major players in the growing "social lending" or Person-to-Person (P2P) lending business. Often dubbed the "eBay of personal lending," Prosper funded some $180 million in loans before closing the doors to new loans to meet securities registration requirements. Borrowers post a loan request and lenders bid on the loan. The more bids, the lower the interest rate.

Now that their registration process with the Securities & Exchange Commission (SEC) is complete, Prosper has resumed lending in all states except Iowa, Kansas, Maine, and North Dakota. Lenders may participate if they live in one of fourteen states, with more expected to follow soon.

New Enhancements

A new "floor" on interest rates adds protection for lenders. And with the minimum bid dropped to only $25, lenders will be able to spread their risk around even further.

High-risk borrowers will no longer find Prosper as welcoming. The minimum credit score has risen from 520 to 640.

Prosper's relaunch is welcome news in a time when other lenders are reining in credit offers. Let the bidding begin!

Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis.

Tagged as: p2p, p2p lending, peer-to-peer lending, Prosper, social lending

Gerri Detweiler Credit.com's Personal Finance Expert, Gerri focuses on financial legislation, budgeting, debt recovery and consumer savings information. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights, and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.comTalk Credit Radio. Reach Gerri at creditexperts@credit.com.