I am always looking for the newest financial trend in order to try to get out of debt. Well, maybe not the newest. Maybe I don't think I can completely get out of debt right now either... But anyways, a friend of mine told me about this site and I thought I would see if anyone reading this has used this site and what their experiences are.
So the site is Prosper.com. An "online marketplace for people-to-people lending". This is an interesting idea actually. You go through, create a profile, verify your identity (sometimes handing over sensitive information, so if you do not like to share your information over the internet I am sorry, this may not be for you), and create a loan listing and wait for others to "bid" on your loan. The more people bid, the better your chances are for lowering your APR.
To be honest, some of the loan listings do look ridiculous. Some people are asking for money for not so great things, but some of the causes seem really touching. This site appears to be doing great things for people who are down and out about credit.
My only thing about it is: not every loan listing is fully funded. In fact, if you search their front page a bit you will find quite a bit of loan listings that are not fully funded. People who are lending out money, chances are, are looking for good risks, not potentially bad ones. So those people are going to be looking for good investments where they think they will get their money back. Also, some of the grades seem a little odd. How can a person have a "E" credit rating and a 5% debt-to-income ratio? Doesn't your credit score rely on your debt-to-income ratio? While past credit history counts for a lot, I do not think that one or two late payments should affect your credit "grade" so much (as it did for the friend of mine who referred me to the site).
My information has not been verified, I recently moved and will be getting my name changed soon so I do not even know if I should try to apply for a loan any time before that. I really want to squash some small debts we have before I go on to tackle larger debts that are accumulating for us (student loans). My plan is not to get rid of these completely super soon (although my fiance thinks he wants to pay them off ASAP, I do not think that is the best move for us right now), but to wait a little bit until we have a nest egg starting to grow and have enough money for the expenses we have planned out (we want a TV and a cat), continuous or one-time.
So who knows what will happen. I may not get a loan at all, but at least I will have researched the option and I may (emphasis on the may) become a lender on here. I do not think it is a bad deal and it has a higher APR than my savings account (although with my savings account I can quickly liquidate those funds if needed). What do you think?
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