Friday, December 08, 2006

Toolmaking and Loans

My latest obsession is -- I've lent out some money, and am aiming to make 10-11% annual interest (so far, I've made about $130 in interest, but have $150 in loans that haven't been paid in a couple of months).

I've given myself a crash course in statistics in the last month or so, taking data on Prosper listings and loans and running it through the "R" statistics package. I've been working on seeing if certain words make it more or less likely for listings to get funded, but needed a way of factoring out all the numbers associated with the loans (for example, how likely is it that a "B-grade" borrower asking for $5,000 at a 13% interest rate will get their loan funded?).

The results turned out to be interesting, even without doing the text analysis, and I've created an online tool to help borrowers improve their loan listings.