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How it works: Debt consolidation with Prosper.com

by Prosper on 06/8/12

“Debt consolidation” can sound complicated and downright confusing. But it’s really just about reducing your debt to a single monthly payment and then making a commitment to getting rid of it forever. Here’s an example:

With Prosper.com, it’s simple.

  1. Apply online, at your convenience and from the comfort of your home or office.
  2. Pay off your credit cards or other loans with the proceeds of the loan.
  3. Make your monthly payment on your Prosper.com loan and eliminate your debt forever.

If you’re carrying credit card balances but have been afraid to take the next step, then make today the day.

* Minimum payment requirements vary by card issuer (for another example, see this Federal Reserve Credit Card Calculator explanation). We have used a conservative assumption here, taking the greater of $25 or 2% of the outstanding balance plus finance charges accrued in the period. This example assumes that the loan proceeds, net of a $495 closing fee, are used to pay off the credit cards immediately, rather than a scenario with continued monthly minimum payments.

** If you have a Prosper Rating of B and no previous loans and take out a loan for $10,495 for five years, your interest rate will be 20.85% (23.32% APR), you will have 60 monthly payments, and your scheduled monthly payment will be $283.04. Eligibility for a loan is not assured and requires that a sufficient number of investors commit to invest in your loan. Refer to the Borrower Registration Agreement for all terms and conditions. All loans made by WebBank, an FDIC-insured Utah-chartered Industrial Bank.

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13 Responses

J.E. Merced | June 12th, 2012 at 6:45 pm

I am interested on becomming an investor.
How much does the company make in each loan that is secured (percentage or flat fee?. Where can I find this nformarion?
Thank You

Lionel Porta | June 15th, 2012 at 11:00 am

I was disappointed that the loan rate offer was higher than the credit card rate I am trying to payoff. My credit score re: Experian is 775

michael smetana | June 28th, 2012 at 12:03 pm

your interest rates are as high are higher than my current credit card rates NO savings with you

Ellen Scheirer | July 5th, 2012 at 8:27 am

I too was very disappointed with the rate I was given. I was really hopeful that I could get rid of Bank of America but your rates were almost identical to theirs.

Jay Mack | July 10th, 2012 at 5:06 pm

Also was disappointed in the rate offered. My bank’s unsecured loan fixed rated was much lower.

Jiri Vetyska | July 12th, 2012 at 8:48 am

The idea here is, that even though the rate may be similar to the credit card, you will get rid of the card now and avoid the endless payments and the temptation to use the card again.
This is a installment payment so it will be paid off in the set time.
Not to mention, you payments will not go to fat cat bankers, but to other people instead!

Scott B. | July 13th, 2012 at 4:58 pm

You have to realize they have to underwrite loans based on risk which includes more than just your credit score. Maybe your DTIR was high. Maybe you have a different credit history than other people requesting a similar loan.

I agree that the rates should be flexible. I think there should be a way for borrowers to submit an additional amount of personal information, that could be used for underwriting rather than just the usual, number of open lines, delinquent payments, DTIR, Bankcard util., etc.

Derek | July 23rd, 2012 at 4:53 pm

Your rates are too high to justify moving anything to Prosper.com. I have good credit yet you want to charge me 20.99% for a 3 year loan. No Thanks.

DAVID TALBERT | July 25th, 2012 at 6:36 am

need to change my wifes personal information. looking to borrow enough to consolidate all debt and improve our credit report score

Prosper Blog | July 25th, 2012 at 11:04 am

Hi David,
Thanks for your interest in Prosper. We can get your wife’s information updated as soon as possible. Please have her call our customer support team at 1-866-615-6319.

Prosper Blog | July 25th, 2012 at 11:12 am

Hi Derek-
We are sorry to hear that. Prosper factors in several parameters in addition to credit score when determining your Prosper Rating. You can find more information on Prosper Ratings here; http://www.prosper.com/loans/rates-and-fees/

Rae | August 30th, 2012 at 9:10 am

I for one was thrilled that I got a loan with Prosper. I pay triple the rate of interest they offered me on credit cards every year. I see it as a very positive, life changing move I made. The fact that the investors trusted me and loaned me money(sight unseen) is also a crucial step in my debt recovery. I’ll remember that first before I ever think of not paying.


posted in Borrowers,Featured,Personal Finance Education 13 comments »

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