It looks like an even better deal from a borrower standpoint. You post your loan need and the maximum rate in interest you're willing to pay, lenders make bids to cover your loans, and the bids with the lowest interest rates win. The length of the loan is a maximum of three years, payments are automated, and you have the security of knowing that your loan will be paid off in three years and won't be drawn out by fluctuating interest rates. The trick seems to be in getting accepted by a borrower group. Once you're in a group, potential lenders look at the group's overall history and reputation instead of looking at yours as an individual.
So I'm considering applying for a consolidation loan to knock out the credit cards. Of course, I still have to run this by my husband, but according to my math a loan with as much as 10% interest will reduce both the amount I'm paying toward credit cards each month and the amount of time it will take me to pay them off. The only drawback I can see is that my credit cards come with protection that will let me suspend my payments without any penalties should, God forbid, anything happen to my job, and I don't think Prosper offers any such forbearance. I know from experience that layoffs happen in this industry, but I also know that my team's contract with our current client is good for the next seven years, and my job's not going anywhere before then.
I'll take some more time to think it over, talk it over with Matt and look at it from all angles; but right now it appears that the pros far outweigh the cons. Carrying zero balances on all of our cards, using only the one with the big cash rebates for buying gas and paying it off each month… these things can only improve our credit score, which would make our goal of buying a house in five years a lot more viable than it is currently.
I'll keep you posted.
2 comments:
Have you heard about the mess in the Prosper forums today?
Prosper locked down discussion of the largest Prosper group, and banned several users from their forums for criticizing the leader of that group, claiming 'This thread has been locked because it violates the forum policies of "Baiting other members into a fight or displaying other aggressive behavior" and "Being mean-spirited, unruly, or rude."'. Discussions of other prominent groups were not locked, leading many forum users to speculate that the lockdown was in response to complaints from the leader of that group.
Nope, I missed all of that. Man, there's always some kind of controversy. That's why I tend to avoid any message forums as much as possible.
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