If you haven’t heard about Prosper yet, it’s a people to people lending site. If you need money – it’s a way to get it. If you have money – it’s a way to help someone out and make some money from the interest the borrowers pay.
All and all, I think the site was started with a great thing in mind.
I’ve been curious about it because I have been trying to get the balance off of Credit Card #2 so I can transfer it back on for a lower rate (the rate is currently 16.49%). I tried going to a bank once for a loan, and that didn’t work. Could something like Prosper work for me?
As of this moment, there are not many people with funded loan requests. And those with funded requests appear to have the lower debt to income ratios (less than 20%). My ratio is 52% and I think that would be too high for lenders to even take a second glance at me. I can’t blame them – I know if I had money to lend, I would fund loans of people that I felt would pay back. The harsh reality is that a higher ratio means you are more likely to default.
It will be interesting to see if the site will gain more attention and possibly more loans will be funded for those with a ratio similar to mine. I think for now I will pass on the possiblitiy of using Prosper, but I will keep a watchful eye on the site’s progress. Who knows – maybe in a few years I can be on the Lender’s side of the site 🙂
For more reading, there is an article in the Wall Street Journal written by someone who is lending money to others via Prosper.