Prosper.com... get low interest loans... amazing

[ZacFields]

I saw this on the news today and I had to check it out.

This site is simply the most amazing thing I've ever seen. The concept behind it is that rather than going to the bank for a loan, you put up your listing on this site and based on your credit score, people bid on how much they want to give you. Then you pay the lowest interest rate given at the end of the auction.

I am trying to get $5,000 to make some repairs to my car, and to get some cushion money in my bank account. Within 15 minutes, I had already had 6 bids amassing a little over $500 worth of that $5k.

It's not a hoax... the only risk on this site is if you're lending you have the risk of borrowers defaulting on their loans, but as a borrower you have zero risk (as long as you're able to pay off your loan)

If you guys are looking for a good way to secure some funds for car projects, or debt consolidation, check this out: http://www.prosper.com

And here's a link to my own listing(hope this link works):
https://www.prosper.com/public/lend/lis ... gID=103673 (https://www.prosper.com/public/lend/listing.aspx?listingID=103673)

I thought it was neat so I figured I would share since I know there are some of you out there who are good enough with your money to be able to handle taking out a loan to consolidate some debt and provide a little money for future projects.

Zac

[ZacFields]

Just an update on this guys:

My loan request has made it to the prosper.com homepage. Scroll down on the homepage and you'll see it.

Once the loan gets fully funded, people will continue bidding on it and then my interest rate will start to go down. Most people with my credit score should be getting 10% or better on a $5,000 loan.

For those of you who don't know, 10% is roughly what you could expect for a used car loan. Unsecured personal loans generally run 13% or more.

Zac

[ZacFields]

Final update on this loan: I was able to get a $5,000 loan at 9.39% interest rate.

WellsFargo offers one of the best interest rates for unsecured personal loans, and the best they offer is 13% for an unsecured personal loan to someone with good credit.

Based on that percentage. In one year alone (not factoring in any payments) that is a savings of about $180 worth of interest.

If anyone wants to get into prosper.com, either lending money (if you lend to someone with mediocre credit, you can get 15-25% interest!!) or borrowing money let me know. I have a group started there and I'm trying to get some people to join it.

Zac

[warchild145]

i might have to check into this if i can lend money. Might be a nice way to make alittle change.

[ZacFields]

I plan to do a little lending myself pretty soon. I kinda just took out the loan to get a feel for the program and to see how everything works. I honestly don't really need the $5k. Figured I'd consolidate the little bit of credit I owe and go from there.

The cool thing is that you keep 100% of the interest. If you give $1,000 to somebody at 18.75% (normal for a C or D graded credit rating) you will make 18.75% interest on your $1,000 for the 3-year life of the loan. If they make a late payment, you will get your portion of the late fee that they pay. Technically if you had millions of dollars, you could function just like your own bank using prosper.com.

The only charges they have is for people who list to borrow money. It's $10 per $1,000 loan. And it just comes out of your loan, so I borrowed $5,000 and they will just transfer $4,950 to my account.

If you join, make sure and join my group. I'm trying to build up a group of people (there's no obligation for anything... you'll just be part of my group). The groups are good to help people get lower interest rates.

Here's a link to my group page (I'm changing the image soon... just didn't know what to put there so I put a picture of my ugly mug)
https://www.prosper.com/public/groups/g ... me=under30 (https://www.prosper.com/public/groups/group_home.aspx?group_short_name=under30)

Zac

[Nicolaskl]

So if I had bid 500 bucks on your loan (1/10th of your loan amount) would I then get $15.99 per month for the next three years (1/10th of your montly payment)?

This is an interesting concept. I wonder if they have statistics on the percentage of defaults they get at each credit grade. I probably wouldn't bother with borrowing because it doesn't seem like I'd be able to beat the rate on my credit cards by much (which I don't really use anyway) but it might be a good way to get a decent percent return with potentially not too much risk.

[Nicolaskl]

Man, some of these borrowers look like nightmares, but people are still handing em money. Someone that only has 300 a month in disposable income but has 22,000 in credit card debt? I wouldn't touch that with a 10 foot pole.

It kinda sounds like if a borrower defaults they just put a black mark on his credit rating and then forget about it, no attempt at collection at all. If I were a deadbeat that didn't really care about my credit rating (or someone with a lot of credit card debt/etc that was getting buried and knew I couldn't keep up or knew I was going to declare bankruptcy) I'd take out one of these loans, get the cash in my hand, and then default pretty much immediately.

Or even better, take out a smaller loan (2-3 grand) make on time payments for 6 months, then when it looks like I'm a good risk go for a 7-10 grand loan and really cash in. If I were lending money I'd think long and hard about lending to anyone that didn't have an A or AA rating and really good DTI, employment, etc.

[ZacFields]

Actually after 6 months of no payment the loan is them sent to a collections agency so they do deal with collections. Though it is very possible for someone to default on a loan and then you get nothing.

What prosper suggests to help with that is spreading out your money and investing in people based on their credit rating. Like if you were going to loan $500 to someone, loan it to someone with an A or AA credit rating. But if you want a better percentage, just loan $50 to 10 people with less favorable credit ratings.

If you think about it though, the risk is no more than investing in the stock market. I would often invest in stocks under $2.00 per share, so this is actually a little less risk than that. Those businesses would go under all the time (then again some of them would baloon to $10 or more in about 6 months).

I'll do some lending over there sometime when I get all my finances in complete order. Anyone into investing would love the prospect of getting a 10, 15, sometimes 20% return.

Zac