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[bankomatic]

I recently wrecked my car so I need to buy a new one. I decided that if I can borrow cheaply enough it would make more sense than selling my stocks/bonds. So I went to take out a loan and to my amazement I found that prosper slaps 3% fee just for taking a loan out.

Look at this:



Naturally, I never filed the listing because I am not interested in paying what I view as an outrageous fee. They already collect 1% interest fee or something like that, so why do they need this 3% finance fee that's NON REFUNDABLE and is payable the moment my loan funds?

Is this normal for lenders to try to try and bend you over like this? I was rated as "A" credit by the way, so it's not like the fee is reserved for those with bad credit.

[Senator]

Prosper needs to charge those hefty fees to stay in business.

[bankomatic]

Prosper needs to charge those hefty fees to stay in business.

That hefty fee just lost them my business.

[ira01]

Prosper has always charged borrowers an origination fee, in addition to the servicing fee charged to lenders.  It used to be considerably smaller, especially for the upper credit grades.  The current flat 3% origination fee was added when Prosper briefly re-opened in CA, IIRC.  They also jacked the minimum fee to $75, IIRC, versus $25 (I think).  So on a $1,000 loan, the origination fee is a whopping 7.5%     Anyone who would take a smallish loan on Prosper is obviously desparate for the money (and so is a terrible credit risk).

[bankomatic]

Prosper has always charged borrowers an origination fee, in addition to the servicing fee charged to lenders.  It used to be considerably smaller, especially for the upper credit grades.  The current flat 3% origination fee was added when Prosper briefly re-opened in CA, IIRC.  They also jacked the minimum fee to $75, IIRC, versus $25 (I think).  So on a $1,000 loan, the origination fee is a whopping 7.5%     Anyone who would take a smallish loan on Prosper is obviously desparate for the money (and so is a terrible credit risk).

What are those idiots at prosper thinking. They are making it uncompetitive when compared to taking out a loan from a bank if you have good credit.

[ira01]

Prosper has always charged borrowers an origination fee, in addition to the servicing fee charged to lenders.  It used to be considerably smaller, especially for the upper credit grades.  The current flat 3% origination fee was added when Prosper briefly re-opened in CA, IIRC.  They also jacked the minimum fee to $75, IIRC, versus $25 (I think).  So on a $1,000 loan, the origination fee is a whopping 7.5%     Anyone who would take a smallish loan on Prosper is obviously desparate for the money (and so is a terrible credit risk).

What are those idiots at prosper thinking. They are making it uncompetitive when compared to taking out a loan from a bank if you have good credit.

Yeah, but it is still a lot cheaper than a PDL -- apparently, that is Prosper's target borrower.   

[Shenandoah]

What are those idiots at prosper thinking. They are making it uncompetitive when compared to taking out a loan from a bank if you have good credit.

They are thinking that people would rather pay interest to "real people" rather than "big evil corporations"
 

[bankomatic]

What are those idiots at prosper thinking. They are making it uncompetitive when compared to taking out a loan from a bank if you have good credit.

They are thinking that people would rather pay interest to "real people" rather than "big evil corporations"
 

If they don't want me paying interest to big evil corporations then why are they charging me 3% fee + annual interest? People who live in glass houses shouldn't throw stones I think.

[onthefence]

What are those idiots at prosper thinking. They are making it uncompetitive when compared to taking out a loan from a bank if you have good credit.

Prosper is thinking that they don't have the loan volume to generate enough revenue in order to stay in business.  They have recently cut out all of the FICO E & HR credit risks so they have to stick it to the higher grades which now make up the borrower customer base.

3% down & 1% tax disadvantaged throughout the life of the loan I think has really started to price Prosper out of the market.

I think credit cards now charge between 3-5% for cash advances (I've never taken one).  Perhaps they are currently banking on the credit markets having ceased up so much that paying 3%+1% extra will be borrowers only recourse.

Honestly, go to your bank (or shop around at banks) and get yourself a decent loan.  You've got good credit (& I assume a job).

Or else consider selling some of those bonds.

They have also priced themselves out of the family-to-family lending, or friend-to-friend lending.  Virgin money is clearly the better option now.

[bankomatic]

I am currently weighing all my options for the most attractive way to get the money. Prosper was just one of the things I was looking at and I crossed it off the list already because they are too uncompetitive.

[bamalucky]

My credit union is loaning for new cars at 3.49%

[bankomatic]

My credit union is loaning for new cars at 3.49%

I don't want a lien on my car. I would be buying a used car.

[bamalucky]

My credit union is loaning for new cars at 3.49%

I don't want a lean on my car. I would be buying a used car.

http://www.fortmcclellancu.org/rates.asp

48 Months   New Auto, Used Auto, 09, 08, 07, 06 and 05 Models   4.00%

[bankomatic]

My credit union is loaning for new cars at 3.49%

I don't want a lean on my car. I would be buying a used car.

http://www.fortmcclellancu.org/rates.asp

48 Months   New Auto, Used Auto, 09, 08, 07, 06 and 05 Models   4.00%

Here is what I don't understand. Why are used/new car loans at such low interest rates while personal loans are at 8% or higher? Is this because they put a lien on the car if you get a "car loan". I don't want a lien on my car because that requires me to get a lot of insurance coverage such as collision/comprehensive which I don't want to pay for because it's expensive.

[bamalucky]

If your car has a lean check the tires