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[brianguy]

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

- idiots that don't know any better or are lazy, or (for some unknown reason) would like to borrow on Prosper.  i.e. b.s. "social aspect" (does ebay have a social aspect?  didn't think so)

- people that can't get loans anywhere else (have probably been eliminated with Prosper 2.0 but I don't really pay that much attention anymore)

- people that their scoring model scores incorrectly.  I presume it would tend to work in Prosper's favor more often than not, but you never know what flukes might come about.

- outright scammers

[mothandrust]

Bama's credit union is offering these 4% rates on (secured) car loans, and presumably only to the best customers

As I discovered in trying to get a home refinance recently, the bank wasn't really interested in letting me have a 30-year-fixed at a 4.6 APR, so they just let the clock run out on my 45-day rate lock.

Once rates had moved up, I was approved and had to take the market rate of 5.0 APR or walk away.  If rates didn't go up, maybe they would have kept the delays coming or rejected the application.

So I wonder how much volume of business is being done at these <5% rates.

If you wanted to get new unsecured loan or line of credit for $20K (for 3 years or longer term) where could you get it and what would your rate be?

[lenderguy]

If you wanted to get new unsecured loan or line of credit for $20K (for 3 years or longer term) where could you get it and what would your rate be?

I was asking that in Prosper's early days... signature loans at say BofA didn't come with cheap rates. 

But in this day and age, a better question is, "Are you even going to get a fixed rate?"  BofA and AmEx just switched my fixed rate cards to variable rate cards.

[mhs505]

Bama's credit union is offering these 4% rates on (secured) car loans, and presumably only to the best customers

As I discovered in trying to get a home refinance recently, the bank wasn't really interested in letting me have a 30-year-fixed at a 4.6 APR, so they just let the clock run out on my 45-day rate lock.

Once rates had moved up, I was approved and had to take the market rate of 5.0 APR or walk away.  If rates didn't go up, maybe they would have kept the delays coming or rejected the application.

So I wonder how much volume of business is being done at these <5% rates.

If you wanted to get new unsecured loan or line of credit for $20K (for 3 years or longer term) where could you get it and what would your rate be?

According to Wells Fargo and their calculator, it would be 13%.

[brianguy]

http://finance.yahoo.com/banking-budgeting/article/107486/banks-get-picky-in-doling-out-credit-cards.html

[mothandrust]

If you wanted to get new unsecured loan or line of credit for $20K (for 3 years or longer term) where could you get it and what would your rate be?

According to Wells Fargo and their calculator, it would be 13%.

http://www.prosper.com/invest/listing.aspx?listingID=418739

"A" Borrower rate is 14.08% (lender yield 10.95%) on this 15K listing.

http://www.prosper.com/invest/listing.aspx?listingID=419187

"AA" Borrower rate is 13.12% (lender yield 10%) on this 8K listing.

[mhs505]

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

I finally looked at your link.   Your comment is misleading.  According to the website you gave, these are the options that your credit union offers for an unsecured credit line:

48 Months   Loanliner, Line of Credit & Loans not fully share secured $5,001.00 - $10,000.00   10.90%   Loan Calculator
36 Months   Loanliner, Line of Credit & Loans not fully share secured $2,501.00 - $5,000.00   11.90%   Loan Calculator
36 Months   Loanliner, Line of Credit & Loans not fully share secured $50.00 - $2,500.00   12.90%   Loan Calculator

I didn't look to see if there are application fees or points attached to these options. 

[mothandrust]

The 4% is for a secured line (maybe there are fees and conditions, and maybe they are so onerous that few will qualify).

For someone able/willing to pay the loan back, is there really a distinction between a secured and unsecured loan from the borrower's perspective?

[Shenandoah]

The 4% is for a secured line (maybe there are fees and conditions, and maybe they are so onerous that few will qualify).

For someone able/willing to pay the loan back, is there really a distinction between a secured and unsecured loan from the borrower's perspective?

There is if you want to borrow for something that can't be be used as security.

[ira01]

The 4% is for a secured line (maybe there are fees and conditions, and maybe they are so onerous that few will qualify).

For someone able/willing to pay the loan back, is there really a distinction between a secured and unsecured loan from the borrower's perspective?

Yes.  For one thing, you never know what the future will bring (notwithstanding your current ability/willingness to repay the loan).  For another, secured loans often carry ancillary requirements that may cost you money -- for example, a car and home loans generally require that you maintain a certain level of insurance, which might be more than you would otherwise choose.

[lenderguy]

The 4% is for a secured line (maybe there are fees and conditions, and maybe they are so onerous that few will qualify).

For someone able/willing to pay the loan back, is there really a distinction between a secured and unsecured loan from the borrower's perspective?

Yes.  For one thing, you never know what the future will bring (notwithstanding your current ability/willingness to repay the loan).  For another, secured loans often carry ancillary requirements that may cost you money -- for example, a car and home loans generally require that you maintain a certain level of insurance, which might be more than you would otherwise choose.

+1

That question is like asking "if you're young and healthy, why bother having health insurance?"  To make the comparison rather direct, consider the spread between a secured and unsecured loan to be the cost of "insurance" in case you are unable to pay that loan back through unforeseen circumstances.

[Loan_shark_74]

FYI, My credit score has been in the High 700's this last year. I recently closed on a house in June at 4.5%. I have always paid my bills. My oldest credit account is a credit card I opened through Providian in 2001. It was eventually taken over by Washington Mutual, and then Chase. Chase just cut my available funds by 75%, raised my interest rate to just over 27%, and raised the balance transfer fee to 5%/50 minimum/no maximum. And no, I have not missed a payment. Their excuse was I was not using the card as much as they think I should have. BofA has recently risen its transfer fees also. So yes, Prosper has become a viable option for a quick source of funds as apposed to a balance transfer.

[mhs505]

Our credit scores are both in the 780 - 800 range.  Chase took over my Providian/WaMU account too, and even though I have had it for over 10 years, they just cut my 11,000 credit line to 2,800.   It had a zero balance, as there hadn't been any activity on it in over a year.  They haven't touched any of my other Chase cards, it seems that these are the accounts they are targeting.  

[Loan_shark_74]

Our credit scores are both in the 780 - 800 range.  Chase took over my Providian/WaMU account too, and even though I have had it for over 10 years, they just cut my 11,000 credit line to 2,800.   It had a zero balance, as there hadn't been any activity on it in over a year.  They haven't touched any of my other Chase cards, it seems that these are the accounts they are targeting.  

Talk about a mirror of me. My credit, the last time I checked, was also in the range of 780 to 800. Basically they are promoting the practice of using cards as regular cash and holding debts. They do not like those of us who want to hold the cards for emergencies only, use them sparingly, and pay them off every month.

[Mark12547]

Thread was split. See Checking Credit Scores for the discussion on checking credit scores, particularly issues on FICO vs. "fako" and where one can check one's score.