How to Secure a Loan from Prosper

Whether it be for personal use or for business, taking out a loan on Prosper can be a viable option when you need to lower your interest rate on existing credit or if you can’t get approved elsewhere. Prosper is an established 3rd party system that brings together individual lenders and borrowers in a bidding style format that is similar to eBay. It provides borrowers with the ability to submit a loan listing for a set amount and desired interest rate. In addition, it can provide lenders with an opportunity to create passive income stream. The following list provides details on how to make it easier to secure a loan at the lowest rate possible using Prosper from first hand experience.

Difficulty: Moderate

Instructions

Things You'll Need:

• Approved as a Prosper borrower
• Computer
• Personal information to run credit checks
• Decent credit rating

1. List your loan for at least 7 days. Prosper allows a loan to list from 1 - 10 days. Listing your loan for 10 days (if you don't need the money quickly) allows your loan more time to be bid down. Lenders don't really like this, but it really helps. Once your loan has 100% of the bids, having those extra days will allow the interest rate to drop significantly!

2. Work on your credit score! I know this is obvious, but having the 'AA' credit grade really helps to get funded quickly and allows the rate to get bid down. Prosper does not charge any service fees on 'AA' loans, so this is a plus for lenders.

3. Personalize your loan request listing. Add a picture of you and your family or explain in detail what your loan is going to be used for. Be honest in your listing and be sure to respond to each inquiry that is sent by potential lenders. This is one thing that potential lenders look at is if you spend the time and energy letting them know a little bit about yourself and following up with questions. Provide as much detail about what you will be using the money for. For example, if you are going to pay off a credit card, then tell them the amount you owe on the card, your current rate, and how long it will take to pay it completely off.

4. Keep your loan request amount low. Most Prosper lenders tend to bid on loans with lower amounts as they feel they pose less risk. A borrower stands a much better change paying off a $1,000 loan instead of a $15,000 loan. If you can afford to lower your requested amount, we stand a much better chance of being funded.

Tips & Warnings

• Having good credit will help lower your rate.
• The lower your desired loan amount the higher chances of funding your loan.
• Be honest when answering questions from potential lenders.
• Include lots of details when explaining what your loan will be used for.
• If you have really bad credit, then Prosper may not accept your borrower application.

Resources

• Peer Lending Tips
• Need Cash Fast?

[petulantM]

on 12/10/2008 Great tips. If potential borrowers follow these suggestions, their loan requests are more likely to be funded.

[showpup]

on 11/18/2008 I had no idea about Prosper. I'll have to check them out next time I need a loan.