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[bamalucky]

What legit borrower is gonna pay that on top of the lender rate?

My Credit Union is lending at 4% but they use a real credit scoring model.

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

[bankomatic]

What legit borrower is gonna pay that on top of the lender rate?

My Credit Union is lending at 4% but they use a real credit scoring model.

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

A borrower that doesn't understand simple math, or is lazy/stupid, or has bad credit, or doesn't plan on paying back the money.

[ira01]

My Credit Union is lending at 4% but they use a real credit scoring model.

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

Only on car loans (which are secured with the car).  On an unsecured loan (see the "Loanliner, Line of Credit & Loans not fully share secured"), they are charging 10.9%, 11.9%, or 12.9%, depending on the amount (and the max appears to be $10K).

[pioneer11]

I can get a signature loan from the credit union at 8.9%.  I don't know the limit though.  The best APR I can get from Prosper is about 6.6%.  It wants me to start at 11.52%.

Glad I don't need a loan.

[Capital_Finance_Group]

This is one of the reasons I do not plan to start lending again at Prosper. It is a fundamental problem in my opinion. With all the other less costly options available for personal lending why would anyone get a Prosper loan unless they do not qualify anywhere else. A 3% upfront fee on a 36-month loan represents roughly a 2.1% increase in the APR for the loan.

[onthefence]

This is one of the reasons I do not plan to start lending again at Prosper. It is a fundamental problem in my opinion. With all the other less costly options available for personal lending whay would anyone get a Prosper loan unless they do not qualify anywhere else. A 3% upfront fee on a 36-month loan represents roughly a 2.1% increase in the APR for the loan.

For good borrowers with intend to pay off early that 3% front load is a huge hit.

[Urbi_et_Orbi]

Nominate for lobby.

[Mark12547]

Nominate for lobby.

Bama, is it ok with you if this thread is Lobbied?

[bamalucky]

Nominate for lobby.

Bama, is it ok with you if this thread is Lobbied?

Sure. Just put the cash in a plain white envelope

[Tokyo Joe]

I don't disagree with the affront that a 3% fee imposes...

However, until the current credit card default crisis lightens up, otherwise "creditworthy and reliable" credit seekers who had their limits frozen or APR jacked may very well be willing to pay the extra 3% in lieu of frozen credit elsewhere.  I suspect that this is a temporary phenomenon, and when the crisis passes, 3% is gonna look awful to anyone.  But I bet right now there are still plenty of takers, not all of whom are "desperate" in the traditional sense, just squeezed.  They will still pay their bills, but they have run out of room to borrow with traditional sources, or need to cut rates asap.  Others will go beyond their means to repay with another loan, and croak out, the 3% won't be much of a factor in that.

Prosper needs to milk that 3% while they've got it, but also be proactive in phasing it down when credit options become more widespread again, if they wanna stay viable for the reliable bill-paying masses.

So I find it distasteful, but I also find everything distasteful this year.

[mothandrust]

The credit card balance transfer offers used to have a 3% origination fee and in the last few months they've gone to 4% (BofA and Chase, IIRC).

Also they used to cap the fee at $50 or $100 max so you could write a 10K check and only pay 0.5% or 1% upfront and then have a 0-3% fixed rate for 9-12 months and sometimes permanently.

[Mark12547]

Nominate for lobby.

Bama, is it ok with you if this thread is Lobbied?

Sure. Just put the cash in a plain white envelope

Plain white envelope is scheduled to go out in today's (July 25, 2009) mail. According to USPS postage calculator, the envelope should arrive in your mailbox on or about Wednesday (July 29, 2009).

Don't spend all the cash in one place!

Oh, wait, it is denominated in United States dollars. I guess you can spend it in one place.  

As per IRC:

[11:19] <bama2> give it to the church

the money is going into the offering plate tomorrow morning.

Sorry, bama, but you are losing out on those two dollars!  

ETA on July 26: the two 1-dollar bills went into the offering plate this morning. You can try tracking them in wheresgeorge.com

Series -------	Serial Number ---------------	Link ----
2003A	L93577238N	link
2006	L54855248G	link

[tekiegreg]

What legit borrower is gonna pay that on top of the lender rate?

My Credit Union is lending at 4% but they use a real credit scoring model.

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

A borrower that doesn't understand simple math, or is lazy/stupid, or has bad credit, or doesn't plan on paying back the money.

Yeah I gave Prosper a thought for a new car loan but ran away from that origination fee.  Still I can't help but think given Prosper collection efforts I could get a really cheap car out of this *g*

[112233]

it might still go up from 3% .. they have a lot of ground to make up.

[mhs505]

I don't disagree with the affront that a 3% fee imposes...

However, until the current credit card default crisis lightens up, otherwise "creditworthy and reliable" credit seekers who had their limits frozen or APR jacked may very well be willing to pay the extra 3% in lieu of frozen credit elsewhere.  I suspect that this is a temporary phenomenon, and when the crisis passes, 3% is gonna look awful to anyone.  But I bet right now there are still plenty of takers, not all of whom are "desperate" in the traditional sense, just squeezed.  They will still pay their bills, but they have run out of room to borrow with traditional sources, or need to cut rates asap.  Others will go beyond their means to repay with another loan, and croak out, the 3% won't be much of a factor in that.

Prosper needs to milk that 3% while they've got it, but also be proactive in phasing it down when credit options become more widespread again, if they wanna stay viable for the reliable bill-paying masses.

So I find it distasteful, but I also find everything distasteful this year.

Also, many of the balance transfer options lately have had 3 or 4% fees, some with no limit.    And our credit is excellent.