My Experience as a Prosper Borrower
If you have been reading this blog, you know that I have to borrow some money to pay off some back taxes. One of the sources for the funds and part of my original plan was to use peer-to-peer lending. Well, there are only 2 major P2P lending outfits in the United States that I could find. They are Prosper and The Lending Club. I had hoped to get the majority of the funds in this fashion. However, Lending Club does not lend in the state of Indiana (one of only 8 where it doesn’t). So that left Prosper.
I went to the website, created an account, and filled out some basic information. Within minutes, I had learned my credit score but was informed that I did not qualify for the full $25,000 loan maximum but only $15,000. I decided that I needed to take whatever I could get since the possibility always exists that something might come up and I only had a limited amount of time to get all the plans in place to pay the IRS.
The application process was a breeze. I filled out some personal and financial information online which then went into a profile that was posted online. Investors could read about my need for funds, the interest rate that the loan was paying, and make an investment in my loan. There was also a verification process that Prosper uses as any bank would with a 3 step code for where I was in the process. This is to help investors know whether or not my financial information had been verified.
Prosper also sent out a security postcard to my address to make sure that it was actually me who signed up for the loan. This was mailed to my physical address and I was asked to enter the code on the postcard online. I thought this was a good step, but wondered what might keep someone from pretending to be me and simply moved recently. I guess if the physical address didn’t match those on a pulled credit report, it might raise some red flags.
I also had to send in some documentation to verify my financial information. This worked out rather well also. I filled out the application on a Thursday evening and was already getting some investors by the next morning. I was a little delayed in getting back my financial information since I was out of town for the weekend. But once I had the time to get the documents together, it couldn’t have been any easier.
I was able to scan everything into my computer and email it back. I needed to send in the latest W-2 form, a recent pay check, and my bank statement to verify the income. I also sent a cancelled check that was used to set up the automatic withdrawal from my checking account to make my loan payments.
Watching the Funding Roll In
Watching the loan get funded was an interesting process. There were several investors that first night, then some more over the weekend. Activity seemed to slow down after the first few days. I suspected that it had to do with the fact that I didn’t have all my financial information back due to the weekend and my being out of town. It turns out I was right, but not in the way that I had suspected.
After emailing my financial information back in, I logged into my account to see if any new investors had added funds to my loan about 12 hours later. Surprisingly, the entire $15,000 loan had been funded just like that. I looked through the investors and found that one investor had funded the remaining $13,000+ down to the penny.
After some searching on the internet, I discovered that there are a few big institutional investors that have made investments through Prosper and one of them had funded the rest of my loan. So, 20 investors are likely individuals and 1 is an institution. That is OK with me since I needed the money.
The funds were then directly deposited into my checking account about 4 business days after the loan fully funded. Again, the process was easy. Now, the payments will be automatically deducted. In fact, the first payment is scheduled to go out tomorrow although I suspect it may end up being Monday since tomorrow is the weekend.
I am a Prosper Affiliate
The process was so easy and worked well for me. So, I decided to become a Prosper affiliate. If you are interested in getting a loan or want to invest your money with them, simply click on the banner in the upper right hand corner of this blog. I know some of my readers invested in my loan and for that I am incredibly grateful.
The interest rate is a little over 18% so it will be a good investment for them. I plan on paying it off as early as possible based upon the other interest rates that I am paying, but I won’t get to it right away. I do still have some other obligations such as the Discover Card first.
Ultimately, I do hope to make a little affiliate income with Prosper. I will be using it for debt pay down like I am doing with all of my blog earnings.
Readers: Have you borrowed or lent through P2P lending? Share your experiences.