Investors visiting Prosper.com in the last day or so will have noticed something new. On the browse listings page there are now little numbers (1, 2 or 3) next to every loan listing. These numbers correspond to the verification stage for each loan.
Here is an excerpt from Prosper’s page explaining this new Verification Stage feature:
The Verification Stage indicates the progress on your Prosper loan application, based on Prosper’s verification of information and documents you’ve submitted. Verification Stage icons tell you and prospective investors how far along Prosper is in verifying the information you submitted, in order to process your application. The higher the Verification Stage, the more attractive your listing is to investors. You can help improve the Verification Stage to get your loan application completed sooner—and your money faster—by submitting required documents promptly upon request.
One of the problems for p2p investors is that you never know if the loan is going to survive the verification process. So you can invest in what looks like a good loan only to have your money returned to you because the borrower failed a part of verification. Sometimes this means your money is tied up for 14 days before it is returned to your account.
Now, you can see what stage of the verification process each loan is at before deciding whether to invest. I am already using this new information. This morning I was about to invest in a loan and I saw it was still at stage one so I decided to wait and see if it progresses further along before investing my money.
In a conference call with Prosper management this morning they said they are already seeing an acceleration in the verification process as borrowers now want to move quickly to stage three so their loan will be more appealing to investors. So this move looks like a win-win for all parties. Investors get more complete information, borrowers can get their loan funded more quickly and Prosper encourages borrowers to do the work to verify their information which means more successful loan originations.
Looks like a good move to me. What do you think?