My Best Loan |
7 Comments |
For the longest time, I eschewed standing orders on Prosper.com. I looked into them briefly and judged they weren't for me. I was wrong. Yesterday, my standing order caught this loan. With a credit grade of A and a debt to income ratio of 14% this fund could probably have gotten funded at 12-13% very, very quickly. This person must have been in a huge rush to choose 20%. The fact that it was funded in only 22 minutes speaks volumes.
While I'm happy that I'm in this loan, I'm feeling a little greed kick in. I would have probably put much more in it. It tells me that I may need to adjust my standing orders to put more money in these loans.
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March 9th, 2007 at 9:39 am
I completely agree with greed in this case… That is why I ladder. If you were laddered you would probably be in this loan for at least $150 (assuming funds). If you did an unequal ladder (more money at the higher interest rates) it might even be as much as $300. I am assuming your current lending patterns.
March 9th, 2007 at 9:42 am
Way to go, good for you. Funded in 22 minutes - unheard of. Don’t get too greedy, borrowers like that is like a needle in a haystack, hard to find.
March 10th, 2007 at 12:37 pm
How do your taxes work with Prosper? Although an index fund may only get me around 9%, it’s in a tax-protected IRA. Are you still coming out ahead, even after taxes?
I love the idea of Prosper. Does anyone know if paying off a Prosper loan is good for building credit, or is it considered a private loan that has nothing to do with your credit?
March 10th, 2007 at 12:54 pm
My understanding is that taxes are pretty similar to bank interest, charged at your normal tax bracket. I’m only 98% sure of that because taxes in general are so complex that it can be difficult to be 100% sure. That said, I’ll go with my typical disclaimer of, contact your tax adviser. I invest in my Roth IRA as well, but that’s separate from this.
I don’t know how the credit bureaus treat Prosper. My guess is that if it shows up your credit report, it’ll factor in the overall record. I’ve really never thought of it too much from the borrower’s side as I’m a lender.
March 11th, 2007 at 10:29 am
Here is a post I wrote about using Prosper to repair your credit…
http://rateladder.com/2007/01/09/use-prospercom-to-repair-your-credit/
March 14th, 2007 at 2:11 pm
Isn’t it a little too early to call this your best loan? Granted it looks very good up front, but so did buying Enron stock a couple years back
I’m very intrigued by your Prosper dealings, but when it comes to loans your best ones are the ones that get paid off in full. While this one may look great up front stuff happens and he could very well default (unlikely but possible) which I think would change your opinion on the greatness of the loan. Maybe a better title would have been “My Most Promising Loan”
March 14th, 2007 at 2:22 pm
“My Most Promising Loan” doesn’t have the kick to it. It’s good that you are intrigued by my Prosper dealings, because I get the feeling you’ll see a few more posts on the topic.