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Those of you following my blog for a while know that I used Prosper.com to help lower the interest rate on some of my credit card debt. Not too long ago, I paid it off in full, so I thought it would be a good idea to write a final post on it.
At first, I wasn’t even sure Prosper could help someone like me (for those unfamiliar with Prosper, it is a people-to-people lending site). I tried going to banks before to try to consolidate our debt, but they fell short of laughing at me. We had too much debt and not enough income. The appeal of Prosper, though, is that it is regular people funding your loan. They have the ability to see the reasoning behind the numbers and not just the numbers.
After taking some time reading about Prosper, I made the leap and created a loan listing at Prosper. In seven days, I had a fully funded loan for $3,500 at 9.9%. A total of thirteen lenders contributed to my loan.
If I had to do it all over again (if our situation was the same), I would. It was nice to have a debt payment that was the same amount every month. They even automatically withdrew it from our account! There was no worrying about our rates increasing and I knew my money was going to regular people. I didn’t blog too much about that loan after it was funded because it was on auto-pilot for repayment. That was nice.
If you are thinking of trying Prosper.com for debt consolidation, here are some of the tips I’ve written:
Tips for Using Prosper for Debt Consolidation
My List of Tips for Listing a Loan on Prosper
Resources for Prosper Borrowers
Reader Question: Is Prosper.com Trustworthy?
As with anything, always learn as much as you can. I read about Prosper for months before I finally decided to list a loan. I also talked to others who were already involved with them.
If you have any questions about Prosper.com and my experience, feel free to ask in the comments or contact me.
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About This Site
Credit Card Debt
- Starting = $37,614
- Paid Off = $29,012
- Current = $8,602
- $25 ING Savings Bonus
Savings Account
- Current = $3,750
Posted: October 30th, 2007 at 6:10 am
I’m glad you had a good experience with prosper! I’ve joined but I have yet to get involved, hopefully in the near future. Right now my debt is from 0% to 4% so it makes no sense for me to consolidate there.
Thanks for sharing and great blog by the way.
Bas
BuildAndSucceed.com
Posted: October 30th, 2007 at 7:08 am
Congratulations on paying down the Prosper debt.
I was just looking at your numbers on your side bar. You are making great strides!
Continued success!
Posted: October 30th, 2007 at 7:25 am
I’m curious, did you mention your blog in your loan request? (on Prosper, that is?) Because, after reading here, you seem much more trustworthy than some comparatively random person. It shows people that you’re serious and they can expect their money back.
Posted: October 30th, 2007 at 7:40 am
wealthy_1 - it amazes me how many people catch it when I change my sidebar totals
I paid $300 more to our savings/debt. Each one received $150.
Mrs. Micah - Yes, I did mention my blog in my listing. At the time, though, I was blogging for four months. Interestingly, I was grilled about this blog…with a lender trying to make sure it wasn’t a well-thought out scam.
Posted: October 30th, 2007 at 8:44 am
I just checked, and they took down the listing. Unfortunately, I didn’t take a screenshot.
I wonder if they did that because it’s paid off.
Posted: October 30th, 2007 at 9:48 am
WOW Maybe I could ask people on prosper to lend me 12k to pay off my credit card!! I hate paying CITI 14% every month.
Posted: October 30th, 2007 at 11:00 am
I also had a loan funded by Prosper. I paid it off and (as many do) I turned around and started funding other loans to ‘give back’ to the community.
And GIVE I did. Despite following all of the advice on properly distributing your loans among many prosper users and doing in-depth checking, I have been badly burned.
Almost 40% of the loans I made are in default and have been sent to collections. I’m just barely breaking even on interest collected versus money lost to defaults. Collections hasn’t re-couped any money (not that I was expecting much). Many people don’t even make a single payment before defaulting. MANY lenders on prosper report the same thing and it’s getting worse.
Prosper has unfortunately turned into a wasteland. Although it helped honest people like Tricia and I, it’s nearly impossible to find people like this any more who work hard to repay their loans. It really disappoints me because they helped my family so much.
Sad as it is, my money is better put into a HYSA than to be ‘given’ away at prosper.
Posted: October 30th, 2007 at 11:53 am
Congrats again on paying off your Prosper loan! I was going to say that you’ve convinced me to take a look at lending there but Drew (as well as some other blogs I read) really give me pause. Would you consider lending there?
Posted: October 30th, 2007 at 1:26 pm
I’m always glad to hear that some folks are having good Prosper experiences. Yay for you!
Posted: October 30th, 2007 at 2:14 pm
I believe that Prosper only allows access to a listing for a year (if you are not a lender on the loan.) Not sure what happens once a loan is payed off.
Posted: October 30th, 2007 at 2:23 pm
I’m glad Prosper worked for you. Like Drew had posted a lot of the loans on there are not being paid and it’s making it worse for the ones who seriously need a decent loan. Sure I hate paying credit card companies and the best way to eliminate a debt is to treat it like a term loan and make a consistent payment to it every month for a period of time, Prosper provides that. I don’t have a loan there yet but have thought about it. At least you have one less debt to worry about and now that payment can be focused somewhere else.
Posted: October 30th, 2007 at 3:15 pm
Would I ever lend on Prosper?
Since obtaining my loan, I check in with their forums every now and then and read what the lenders are saying. It is discouraging, to say the least. I thought the fact that borrowing from regular people would help provide motivation to pay it back.
That said, the only way I would lend on Prosper is if I felt secure in who I lent to. I had one lender who really asked me a lot of questions…I think I would do the same. I also would need to have money to spare. So I’m not lending until we are out of debt and have a good emergency cushion built up. Prosper may change a lot in that time.
Posted: October 30th, 2007 at 3:36 pm
I think this the first blog post I’ve seen through the perspective of a Prosper debtor. I guess it does help people after all. I always thought it was a bit too loan sharkish to really help people, but I guess I was wrong.
-Raymond
Posted: October 30th, 2007 at 5:09 pm
Thanks, Tricia. If I decide to lend, I’ll definitely be asking a lot of questions!
Posted: October 30th, 2007 at 5:46 pm
Andrew from Prosper here. I wanted to respond to Drew’s comment about having 40% of his loans go to default. I’m sorry to hear that, because it’s never good when someone makes so many loans that go to default. It’s also unfortunate, considering that the net default rate on Prosper since the beginning of time (published on the site) is only 2.47%. And as of this morning, we have added more guidance about projected defaults at the point where lenders are placing their bids. We expect that this will significantly reduce the amount of loans being made to borrowers with poor credit and a low likelihood to pay back their loan.
Posted: October 30th, 2007 at 7:30 pm
Thanks for sharing your experiences Tricia!
Posted: October 30th, 2007 at 8:01 pm
Oh…Andrew’s comment reminded me of something…
One thing that has bothered me about Prosper is how much they value their lenders. Borrowers, well, you aren’t made to feel valued so much. I’ve seen a few emails that lenders have received. For example, they are congratulated on their anniversary of joining Prosper. As a borrower, I received no such notice.
Not a huge deal, but if I was in charge…I’d make the borrower feel more valued to the community.
Jim - You may well be able to get a better deal somewhere else besides Prosper. There’s a gentleman that stops by here that was able to consolidate his credit cards through personal loans from his bank at decent rates. It all depends on your credit score and your debt-to-income ratio.
Posted: October 30th, 2007 at 9:05 pm
Hi Tricia… actually, everyone gets the anniversary email, not just lenders. You didn’t get one this May because we hadn’t built the system that sends them out until July. (sorry) But you’ll get one next May.
And if you ask a lender if they feel like Prosper values them more than borrowers, they would probably disagree and say that we care much more about the borrowers. I guess the grass is always greener…
Posted: October 31st, 2007 at 2:44 am
Tricia,
Great to hear about your good experience borrowing on Prosper. I’ve got a few tips on my blog for borrowers and lenders as well (mostly for lenders).
Tom
Posted: November 2nd, 2007 at 12:55 pm
Thanks for posting this. I hadn’t heard of Prosper before. I’ll check them out.
Posted: November 2nd, 2007 at 5:34 pm
[...] mentioned Prosper earlier this week; Tricia at Blogging Away Debt writes about her experience on the receiving end of a Prosper [...]
Posted: November 3rd, 2007 at 4:19 pm
Theses are very up seting stories,but this is the situation people get them selfs in when they lack financial education in the book rich dad poor dad he covers good debt bad debt and how people get them selfs in this situation though lack of financial education.My name is Nelson Smith and l am a expert in debt related issues my website is
http://www.debitconsolidation1.com and if you want to look at my blog at http://debitconsolidation2.blogspot.com l think you have a excellant blog something l want emulate
Posted: November 7th, 2007 at 8:13 pm
I’ve recently interviewed Chris Larsen, ceo of Prosper.com:
See interview here
I think he would love to hear your story too.
Posted: November 7th, 2007 at 8:15 pm
Link not working, sorry Tricia:
http://hyveupguestroom.blogspot.com/2007/11/chris-larsen-ceo-of-prospercom.html
Posted: December 1st, 2007 at 2:54 pm
I too had a great experience on Prosper last year and I am looking for a second loan now. It was such a great feeling to have the money in my account and pay off all of my charge-offs, delinquent accounts and other bills. You get this great sense of renewal and hopefully other people will have this experience and take charge of their financial situation. It is empowering!
Posted: December 13th, 2007 at 9:11 am
[...] this so I can’t speak to it but Tricia at Blogging Away Debt has and you can read about her experiences with Prosper. Related Posts Pay Off Credit Cards with Home Equity?Ditech 125% Freedom Loan… What!?!? [...]
Posted: January 20th, 2008 at 12:04 pm
I recently started a new blog reviewing specific Prosper listings. You guys might be interested in checking it out:
kylemstephens.com
Enjoy!
Posted: March 22nd, 2008 at 10:08 pm
I find that acquiring my credit score and reports are impossible because the websites asking me to verify my identity ask about a mortgage I may have applied for in february of 2000. The problem with this is in 2000 I was fourteen years old, so I couldn’t have applied for a mortgage. I’m curious how old you have to be for someone to attempt to steal your identity…? But that’s not my primary question. I was wondering if you know anything about applying for a loan if you can’t get your credit score (like me), or if you know how to investigate somehting like that. I hope if you reply to this I’ll get an email notification. Thanks!
Posted: March 23rd, 2008 at 9:31 am
Bah - it is possible for even a baby to have their identity stolen. If I were you, I would contact one of the three credit reporting agencies and ask them about it. Tell them exactly what you told me. That can start an investigation into the matter. They probably will also have some ideas as to what to do next to fix your credit report.
Posted: April 6th, 2008 at 7:55 pm
I think Prosper is awesome. So far, I have two loans with them and they have helped me tremendously. I recommend it to anyone in need of a loan. If your bank says no, most likely, Prosper will say yes!