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[God-Father]

Second

[cubbiesnextyr]

Some additional info from .com

What kinds of loans are available on Prosper?
Prosper offers fixed rate, “fully amortized”, unsecured loans from $1,000 to $25,000. Loan terms of 1, 3 and 5 years are available, depending upon Prosper Rating and loan amount. There are no penalties for paying off your loan early or for making partial prepayments.

Loan Terms

Prosper Rating <=$3,000 $3,001 -$7,500 $7,501 -$10,000 $10,001 -$15,000 >$15,000
AA                1yr and 3yr       3yr                    3yr          3yr and 5yr           3yr and 5yr
A                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
B                  1yr and 3yr      3yr                     3yr         3yr and 5yr  
C                         3yr          3yr                     3yr           3yr  
D                        3yr            3yr      
E                         3yr           3yr      
HR                       3yr           3yr      

fee schedule doesn't have any reference to loan length.

So the 1 year term is only available for small (<$3K) loans.  For A and B borrowers, the minimum origination fee is $75.  So an A borrower who borrows $1,000 for 1 year is paying a 7.5% origination fee.     If their interest rate is 8%, that is an APR somewhere around 16%.     What true A borrower would pay that?  I still get a ton of credit card cash advance offers with 0% for about a year, and a 4% or 5% origination fee.  And I can simply write a check to access the money immediately -- I don't need to jump through Prosper's hoops.

I don't know about that.  See my previous post.  Perhaps they changed the fees for the 1 yr loans?

Prosper's website shows the fees for the various credit grades, but does not mention a lower fee for 1 year loans.  Perhaps they simply failed to update their website, but I doubt it. 

Your 1-year example in your previous post -- was that for a AA?  Because there is no minimum fee for AA.  It is the A and B borrowers that get the shaft on small loans.

Yes, it was AA, so that could very well be the case.  Perhaps they did that intentionally, don't want crappy grades to get a short term loan?  I can't think of a good reason for that though...

[JGuide]

I wonder if the origination fees are going to remain the same.  If so, 1-year loans will be very expensive, since the origination fee will only be for 1 year's use of the money, rather than 3.  That will raise the APR quite a bit.

Have you noticed the credit card companies seemed to have all adopted the 3% origination fee on balance transfers since the credit bill passed? This new trend could lead to more folks taking up Prosper on the various offers?

I do like that the options are only for good credit scores - demonstrating to borrowers the importance of a good credit score!

Gone I think are the days of bouncing balance transfer offers around to keep low/no interest rate debt going...

[DCS]

Gone I think are the days of bouncing balance transfer offers around to keep low/no interest rate debt going...

Ah, the glory days of 2006-7, when I had nearly my annual income in 0%, no-fee balance transfers sitting in the bank earning me 5% interest with auto-payments scheduled each month until the 0% teaser rates expired.  No more 0% fun.

[rob11woods]

correct me if i am wrong but the longer the term is, the higher the amount of the interest that you will be paying right?

[DCS]

correct me if i am wrong but the longer the term is, the higher the amount of the interest that you will be paying right?

That was what was happening when the marketplace set the rates prior to Prosper's major platform change in late December.  I would be very surprised if, now that Prosper sets the rates, the interest rate for the same borrower asking for the same size loan did not increase as the borrower switched from 1 year to 3 year to 5 year.  It wouldn't make sense for Prosper to have a flat or inverted yield curve.

[God-Father]

correct me if i am wrong but the longer the term is, the higher the amount of the interest that you will be paying right?

You are correct that the AMOUNT onf interest you will be paid will be higher.  To me the trouble with 5 year loans is that it gives a longer time for something bad to happen to a person living on the edge (loss of job, medical, car explodes, son goes to jail.....).  Thus turning more interest into a default.