I wanted to post an update of my experience with Prosper, the peer-to-peer lending network where people can get personal loans or lend money and actually get a better return than at even the best savings accounts.
I’m eight months into my three-year loan with Prosper, and I have no complaints. In fact, I’m quite impressed.
The thing I love most about Prosper is that once my loan was funded and I used the money to pay off my higher interest credit card, I haven’t even thought about that debt. My payments are automatically deducted from my checking account on the first of every month, and that’s it.
Unlike with my credit card debt, Prosper forced me to set a monthly payment and stick with it until my debt is paid off.
As much as I tried before, I always got caught in the trap of being able to make the minimum payments on my credit cards, which got me nowhere. Now I just dream of the day my Prosper loan is paid off and I have several hundred dollars extra in my pocket and one less debt! Woo hoo!
Prosper does have some features for account holders. For example, I receive e-mail statements each month and can easily see how much of my principal has been paid down. I can log in to my Prosper account and grab these at any time.
There is no prepayment with a Prosper loan so if I should come across a big chunk of money (wouldn’t that be nice), I could pay it off in one swoop and save some interest.
Prosper worked great for me to consolidate at a time when I was so maxed out I couldn’t even get a new credit card with a low balance transfer rate. The lenders on Prosper were able to see past my high debt and appreciate my otherwise good credit (on-time payments etc), whereas traditional lenders were not.
The difference, I think, between Prosper and commercial lenders, is that there is a human side to Prosper. Commercial lenders typically use a formula to determine credit-worthiness. You don’t qualify? Too bad. With Prosper, lending decisions are made based upon both creditworthiness and the sense of community fostered by the site.
- Learn more: Borrowing and investing with Prosper
It’s free whether you decide to borrow or lend, or just look around.
If you’re thinking of borrowing, be sure to check out my 11 tips to help get your prosper loan funded.
Also, tomorrow stay tuned for a new post: Six great uses for a Prosper loan!