“Prosper Borrowing” Archive
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A reader left me the following question about Prosper.com…
“Thank you so much for this site. I have a total credit card debt of just over $29,000, thanks to grad school and my own bad choices. I really want to get this paid off quickly, and in researching my options, came across an article on prosper.com in Consumer Report. I also found your blog in searching for reviews on person to person lending. Can you tell me more about your experience? In particular, do you feel this is a trustworthy site?”
I’ve realized after reading this comment that I haven’t really talked about my Prosper experience much lately. I guess the main reason for that is because now that I have my loan – it’s just a matter of paying it every month. There are no worries about transferring balances or a raising interest rate. There is much to be said with consolidating credit card debt into a more traditional loan.
To answer the reader’s question about Prosper, I do feel it is a trustworthy site. I have had my loan for a while now with no problems. So, I feel the company is a good one. Now, with almost everything, there will be some people that can ruin the experience for others. Scammers can be found within the users at the site and they are usually borrowers. I haven’t kept up with recent happenings, but last I knew the Prosper team was working hard to weed out borrowers that are scammers.
Since some people looking to Prosper for a loan may despirately need money quickly, that also provides an ideal situation for lenders that are scammers. They may attempt to contact borrowers to make a deal outside of the website. They may also try to get personal information from you saying they will make a bid if you give that info. Now, I haven’t heard of this happening, but the potential is there.
When it comes to Prosper, there are many blogging about it as well as writing about it, so read as much as you can. Prosper does seem to provide chances for those who may be unable to get loans through a bank. The lenders do look at the numbers, but you have a chance to give them your story as well. Often, banks just don’t give you that chance; however, sometimes they do like they did to a reader here.
With anything you do, just be cautious of giving out your personal info and make sure you read about something before jumping in. Prosper may work for some, but not others. Do what feels right for you.
Welcome visitors from Heute Online!
As it was noted, I used prosper.com to obtain a loan that was at a lower fixed interest rate. You can find out more about my borrowing experience with Prosper in my Propser Category.
Another article that may be of interest can be found at MyMoneyForest.com. He conducted a great interview with Prosper.com.
Thank you for stopping by 
While surfing the web during a cleaning break, I came across an article written by a Prosper Lender that has some great tips for those about to list a loan with Prosper.
How to Write a Good Prosper Loan Request
If you are thinking of trying Prosper for a loan, I highly suggest reading any suggestions on how to write a good loan request written by Lenders. It can increase your chances of your loan request being funded.
I’m not very shy when it comes to writing about Prosper. I believe it has the potential to help many people as it has helped me. I was thinking about it, and some of you reading may have lower credit than I do and might be thinking, “Could this work for me?”
I had the wonderful opportunity of interviewing Spicee. She was a High Risk (HR) Borrower who had a successful loan listing. She is also the group leader of TruCheck Lending Solutions. She has a lot of great advice about her experience to share with everyone:
What made you decide to try Prosper for a loan?
I am a single mother of two daughters. In 2003, the year my oldest daughter started college, I had to unexpectedly retire on disability due to illness. Even after retiring and having to manage on a fixed income, I was still somehow able to manage my household as well as the balance of her tuition that financial aid did not cover.
This year was going to be a challenge since I now had another daughter starting college in the fall. I needed to pay her matriculation fees and housing deposit during the summer in order to hold her spot in the upcoming fall semester. I also needed to plan for book and supplies as well.
One evening while watching the news, Clark Howard did a consumer report on this new concept called “people-to-people†lending through a website called Prosper.com. I decided to go onto the website to read more information on the concept.
Initially, my first thought was, “this sounds too good.†After reading through the site a couple of times, I decided to register. Since I was no longer employed, I had not tried obtaining any credit because I felt no one would extend credit to someone on a fixed income.
Also, I thought that I could “kill two birds with one stone†so to speak by borrowing the funds on Prosper to cover the money required upfront for school and purchasing laptops, books, and other supplies my girls needed this fall. By doing this, I would only have one bill instead of several different bills per month where school was concerned.
How “personal†were Lenders with you? Did they contact you to ask additional questions or to provide advice?
When I registered, Prosper had only been advertised to the public for a month or so. I think everyone; lenders and borrowers were basically feeling their way through the process. While reading through the site, I discovered the discussion forums. I registered and began interacting with the people there. I advertised my listing and fielded questions from potential lenders as to why I needed the loan and how it would be repaid. I listed a breakdown of my budget in my loan listing and was upfront in all of my responses to the lenders participating in the forums.
I had one lender in particular who had already placed a bid on my loan email me stating that if I could provide proof of my income, he would feel comfortable with bidding additional funds. Before I could completely gather all the info he requested, he wrote back telling me not to bother as he felt comfortable with me through my participation in the forums that I would be a good candidate for funding and placed quite a bit on my loan. All of the lenders were extremely helpful with offering advice.
Overall, do you feel that Prosper is a good avenue for those seeking loans, especially those with low credit scores?
I believe that Prosper is a great place for individuals with any type of credit to obtain a loan. People need money for a variety of reasons however, if someone has low to no credit, it is extremely difficult to obtain credit. Prosper has created an avenue for sub-prime borrowers to get out of financial binds and began the road to gaining or improving credit.
Why do you feel that your loan request was successful?
I think that my loan was successful because I was persistent and believed in what I was trying to accomplish. I actively participated in the forums advertising my listing while learning as much as I could about credit and borrowing. I was honest, open and upfront about my situation
What advice would you give someone that is thinking of borrowing money with Prosper?
First of all, Prosper is not a charity. It is a site where people lend out their hard earned money to individuals basically with low to no credit on the basis that it will be paid back.
If someone is looking to obtain funding on Prosper, I would suggest that they:
1. Read through the information on the forums. There is a wealth of information there.
2. Join the forums and actively participate in the discussions. Get to know the lenders there and building a rapport with them.
3. Be honest and open about their situation.
4. If they decide to post a listing requesting a loan, be able to provide detailed answers concerning their credit data.
Finally, how satisfied are you with your Prosper Experience?
I am extremely satisfied with my Prosper experience. So much so that I have started my own group on the site to aid individuals in getting funded. I truly believe in the concept of people-to-people lending and want to see Prosper thrive.
Also, since I am no longer employed, I can devote an enormous amount of time to developing my group thus helping prosper to grow; not to mention the forums are addictive!
Thanks Spicee for the Interview
I decided today to pay my Prosper payment. It’s not due until the 20th but I like paying a little early. I’ve always been like that for any bills that are credit rated. That way, if something goes wrong there is a chance to fix it before it is due.
I haven’t discussed this yet, but near the beginning of the month I received my monthly statement from Prosper. It had three main parts:
1.) Loan Summary – all the details about your loan such as the interest rate and current balance.
2.) Payment Summary – shows all of your payments and includes notes about them in case any action is needed.
3.) Account Activity – shows your payments and how it affects your balance.
Overall, a very nice statement that is easy to follow. It’s also nifty to have to print out and keep for your records 
Michael from It’s Your Money was kind enough to answer a few questions from me about Prosper. If you are unfamiliar with It’s Your Money, it is a site full of financial information as well as nifty calculators and Excel spreadsheets. He also has two blogs, It’s Your Money: Money Musings and Debtspiration.
Without further ado, here’s my interview with Michael:
What about Prosper made it appealing to you as a Lender?
Being an internet dork, and a money dork besides that, I was fascinated with the Prosper idea from Moment One. “That is way too cool,” was probably my first thought. And a few seconds after that I was registered.
I had no need to borrow, thank goodness, especially at the rates effective on Prosper at the time. But the idea of lending on a peer-to-peer basis fascinated me. I was so intrigued with the idea of being a Prosper lender that once I’d done a bit of research, I honestly
couldn’t wait to get my experimental (paltry!) $300 transferred into Prosper so I could start bidding on loans.
I didn’t get in it to “double my money” with Prosper loans, or make a killing, or anything like that. More than anything I was fascinated with the idea of micro-lending as facilitated by the internet. I wanted to see how it would play out. And I wanted to have a front-row seat. (Those seats are expensive … for a reason.)
Do you feel that Prosper is a good avenue for those seeking loans?
At some level, if a borrower’s credit is less-than-perfect, then yes, I think Prosper should be given strong consideration. I’d go so far as to say that in its current form, Prosper constitutes a much better setup for borrowers than it does for lenders.
Lenders can see much more relevant info about borrowers now than we could when I originated the majority of my loans. But even with that, the risk/reward scale still comes down heavily on the side of borrowers, in my opinion.
How “personal†are you with Borrowers? Do you contact them to ask additional questions?
Of my six open loans, I have only personally contacted one borrower either before or after the loan was originated. And I’m okay with that. I’m not interested in making Prosper a significant part of my investment portfolio, at least not right now, and certainly not in Prosper’s current form. If I were, I probably would be contacting all prospective borrowers. I would certainly be throwing a LOT more money into the Prosper ring in order to make the ROI more predictable.
Do you feel that a Borrower needs to join a group within Prosper?
Nope, not at all. I leave a borrower’s group affiliation out of my decision almost entirely. With 99 percent of the groups out there, when push comes to shove, group affiliation isn’t going to do a whole lot to get me, as a lender, my money.
Many lenders refer to a lack of “good listings†(loan requests from Borrowers). In your mind, what makes a “good listing�
That’s tough to put into words, really. As a lender, I want to see listings that make sense for all parties involved. I want to see the benefits for myself, obviously, in the form of “safety” (if there is such a thing in the world of Prosper lending) and in an ROI that’s fair
for the risk involved. I want the loan to benefit the borrower in some way. I don’t want the loan to simply dig them a hole deeper than the one they’re (likely) already in.
I want the borrower to be willing to divulge enough financial details that lenders can have a reasonable picture of the risk they’re taking on. I want a borrower’s story to be consistent with the answers they give to lenders and group leaders who make personal contact.
Here’s the gist of it, and what lenders ultimately have to try to decide on a loan-by-loan basis: That person you’re loaning money to — are they on the way up, or on the way down?
Money is a two-way street. If you’re a Prosper micro-lender, you sure want to stay away from the downhill side of the road.
What one piece of advice would you give someone that is thinking of borrowing money with Prosper?
I’d suggest that they do some serious math, run the numbers, and see whether or not a Prosper loan really makes things any better for them. Taking on additional debt is ALWAYS something that needs to be examined from all angles. Too many times it’s an emotional thing: The facts and the potential stress and the hard dollars on the line get brushed aside by short-term “wants” and “shoulds” and “maybes.”
In the case of replacing one form of debt (say, high-interest credit-card debt, which is open-ended in term) with another (say, a fixed-term Prosper loan which MIGHT come at a marginally-better rate) isn’t always a good idea, either. Again, you as a borrower have to
crunch the numbers. Are you making tomorrow better for your family … or worse?
In the world of money, when you get right down to it — when you really wrap your brain around all the costs and the “benefits” — the instances are pretty minimal where a loan truly carries a borrower to a better place than the one he was in before. This is especially true in comparison to the total number of loans being made.
Finally, how satisfied are you with your Prosper Experience?
So far I’ve originated eight Prosper loans. Two loans paid off early, and I reloaned those funds. Considering that two of my current six loans are right now in late status, I’d be outright lying if I said that this has worked out as I’d like. However, as the cliché goes, “Tuition to the School of Hard Knocks ain’t free.” And that is exactly why I have placed so little money on the Prosper line. (I didn’t like visiting the Bursar’s Office in college, either. Money always seemed to vanish when I set foot in there.)
Anyway, when I bid on these loans, I knew what I was getting into. The borrower info I had at my disposal was extremely narrow. I limited myself to loans where the borrowers involved had no worse than ‘B’ credit ratings. Yet I absolutely knew that credit scores tell you little about where a person is, right now, in life. And they tell you zero about what storms may be approaching borrowers’ doors and what thoughts are rifling through their heads. Any lender who thinks otherwise is pretty naïve.
From the lending side, Prosper had made marked improvements lately, and I’m glad to see it. As a study in human behavior, financial psychology, and the market forces of supply-and-demand, there’s nothing else quite like Prosper out there (yet). I read the Prosper message boards frequently, and scan through loan listings as I have time. I still shake my head in disbelief at some of the loans that are getting funded.
In a way, it’s nice not having any money in Prosper available to loan. It means I can just sit back and watch my non-late loans accumulate interest … and watch everything else that goes on at Prosper just for the entertainment and/or educational value of it.
Will I be loaning more money on Prosper in the future? Don’t know. Only time will tell. For now, Prosper is just a sideshow in my personal financial circus.
Thanks Michael for the interview
I’ve been feeling a little apprehensive lately about the ability to have a trouble-free first payment with Prosper. In fact, there is even one borrower who had Prosper take out her funds twice! For anyone looking to Prosper for a loan, a double-dip like that could wreck havoc on their bank balance. For me, I better keep a buffer in place because normally I run my checking account VERY low. We’re talking $40 in it sometimes, and that’s for a few reasons: you can’t spend it if you don’t have I am just throwing as much as I can towards debt.
UPDATE: So far, my payments have been taken out as they should (no double-dipping).
The process of making a payment is really easy. After logging into my account, I clicked the “Make a payment now” link. I was taken to another screen where I have the following choices:
1.) “Make next monthly payment of $112.77 now – Your next payment is due on Jul-20-2006″
2.) “Make an additional payment of $ (fill in amount here) – Your next monthly payment will proceed as scheduled for Jul-20-2006″
3.) “Pay off entire loan balance now”
Of course, being able to do #3 would be awesome but I’m not there yet So, I went with #1 and I am just paying my first payment a little early. After I indicate that I would like to do #1, I am taken to a page where I confirm the information and click submit. After that, the next screen states the payment was successful and I was given a transaction number. I’d highly recommend that every borrower keep track of the transaction number for each payment. I just include it in my memo line in Quicken.
Next, I head on over to my account overview and I see that I now have $0.00 due July 20, 2006. So far, so good.
Now, where’s the interest info? If you click on the “View loan details” link, you will be taken to a page that shows the status of your payments and it also breaks down how much of your payment went towards interest and how much went towards the principal. My payment split ended up being $18.99 interest and $93.78 principal.
I sure hope my loan payment goes off without a hitch and my payment is made early and no duplicate payment occurs. If not, I have a buffer in place and if the payment doesn’t go through I will have a few days to try to work it out before lenders start worrying about a late borrower. Luckily, I have the ability to contact most of my lenders to let them know if there is a problem – and for those who check in on me here, you’ll find out here as well
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My Debt
- Original Debt: $97,293.06
- Paid: $1,927.89
- Remaining: $95,365.17
- Emergency Fund: $1100
- Broken Down
- Line of Credit 2: $0.00
- Line of Credit 1: $0.00
- Credit Card 1: $0.00
- Credit Card 2: $245.00
- Credit Card 3: $405.00
- Credit Card 6: $1,785.00
- Credit Card 7: $2,381.17
- Consolidation Loan: $11,000.00
- Credit Card 10: $14,519.00
- Auto Loan 1: $16,093.00
- Credit Card 11: $23,873.00
- Auto Loan 2: $25,064.00
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