Three Loans Made Via Prosper.com

I've got three loans funded now through Prosper.com:

• $100 @ 8.85%
• $100 @ 15.00%
• $100 @ 23.75%

The 8.85% loan was made to Gualberto. Don't default, Gualberto - I know where you blog! :-)

I've got another bid out for a $200 loan. That listing won't end for another 10 days, so it could be a while before I find out if I got that one.

All my loans are less than a week old, so there haven't been any payments yet. My average interest is 15.36%, after Prosper takes their 0.5% service fee.

One thing I would like to see is an email notification when I have won a loan. Currently, you need to log in to the site to see the status of your bids. Also, an email notifying me when a payment has been made would be nice. Of course, that might already be implemented - I haven't gotten a payment yet, so I can't tell - but so far, I don't think I've received any system generated emails from Prosper, so I'm guessing I won't get one for payments either.

Another thing I'd like to see would be some clarification of how their bidding process works. Prosper lenders bid an amount and minimum interest rate they will accept for a loan. Multiple lenders are grouped to reach the borrower's requested loan amount. I'm a bit unclear about how Prosper determines who the winning lenders are.

For example, someone wants to borrow $1,000 @ 10%. The current bids are, in order of date received:

$500 @ 10%
$250 @ 9%
$250 @10%

There are enough bids to fund the loan and the resulting loan would be $1,000 @ 10%. However, suppose the bidding is still open for another day and now someone else comes in and bids $100 @ 8%. What happens?

It's probably not a big deal in the grand scheme of things, but the engineer / programmer in me is curious to see how this situation is handled. It's a bit more complicated than the standard eBay auction model, since there are two variables involved.